An Introduction to Competitive Intelligence and Data Sources

1
An Introduction to Competitive Intelligence and
Data Sources

• Dr. John T. Drea
• Professor of Marketing
• Western Illinois University

2
Is It Intelligence or Information?

• Information
• is knowledge derived from a collection of
  studied data (e.g., a drop in sales for a SBU)
• Intelligence
• is information that has been analyzed to the
  point where it can be used to support a decision
  (Sandman 2000)
• It involves taking information, adding informed
  analysis (e.g., the reasons for the drop in sales
  for the SBU), and deriving the relevant
  implications (e.g., whether the SBU requires more
  or fewer resources)

3
Intelligence or Information?

• In general, everyone has access to the same
  information.
• You dont need a major advantage.
• Know what to collect, do the analysis, and derive
  the relevant implications.
• The cost of information is declining, but the
  value of intelligence is increasing.

4
The Intelligence Process

• What do we collect information on?
• Should be driven by defined objectives.
• What is it you need to know?
• Who will you target, and where will you get this
  information?
• Separate what is relevant from what is not.
• Consider this What decisions do you face today,
  next year, and in the next 5 and 10 years, and
  what intelligence will enlighten those
  decisions? (Sandman 2000)
• Request that the client explain the decision to
  be made at the time of the request for
  information.
• Be specific!

5
The Intelligence Process

• An issue of time and focus.
• Stop when you have a satisficing answer.
• An organization is like a castle...
• A castle is protected by moats and soldiers, but
  the drawbridge comes down when supplies go in and
  out.
• Information goes in and out of an organization,
  and defenses are lowered to accommodate this.

6
Where can I find the data?

• Estimates vary, but only around 10 of the data
  used in most commercial intelligence activities
  comes from published sources.
• The rest comes from primary sources, such as
  interviews w/ principals, visual sightings, etc.
• Most companies are private, not public - this
  makes things much more difficult (though not
  impossible!)

7
Some Data Sources

• Databases
• Trade journals
• Press coverage
• Directories
• Published market reports
• Credit reports
• Government filings (including local, state, and
  national)

• Court documents
• Employment advertisements
• Company web sites, including unpublished press
  releases
• Usenet (bulletin boards)

8
Some ideas for data collection

• One good starting point can be a D B Credit
  report.
• Can include names of company officials,
  subsidiaries, loans, leases, and square footage.
• Its a reasonable starting point in intelligence
  gathering.

9
Getting started

• Define what do you need to know? Be specific!!!
• Industry structure/Market Overview Who are the
  major players?
• Literature search (library/Internet)
• These is a jumping-off point in data
  collection.
• Do your homework before you start calling.
• Who has the information you need?
• Ask the client who would have this information in
  their company.
• Organize, then start with the most likely sources
  and work to the least likely.
• Share and discuss your information with other
  team members.

10
Market overview

• Sources to consider include
• Trade publications
• CEOExpress, links to on-line journals, news ,
  regulatory agencies, and trade associations in
  many industries
• Government Sources
• Market studies
• Check with university research bureaus
• Once youve built this background, consider
  contacting a trade association.

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Trade associations

• Can provide good information on an overall
  industry (though they are not obligated to.)
• Tips
• There may be several associations, so start with
  the biggest.
• Familiarize yourself with the terminology of the
  industry before you call.
• Dont ask for information on individual
  companies.
• Speak to the information officer or association
  president.
• Ask for written material, and verify the numbers.

12
Other National/International Sources

• Lexis/Nexis Academic Universe
• LEXIS-NEXIS Academic Universe Menu Page
• Select Business News then search contains
  magazine and newspaper articles, but also
  transcripts from broadcasts.
• Want to know what companies fit certain size
  characteristics? Use the same link, then go to
  Compare Companies
• Journalist Express, a complete listing of
• Wire services
• News services
• Search engines
• International news

13
Some ideas for data collection

• Think global, but look local for media
• Consider this wheres the best place to find
  information about Caterpillar - in the Chicago
  Tribune or in the Peoria Journal-Star?
• Major issues may be covered well by a
  major/national media source, but youll likely
  find some local details otherwise unavailable.

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What do I do with old information?

• If its on target but dated, consider contacting
  the author directly.
• Go to the original article, identify the author,
  and call him/her for an update.
• Ask the author who else is knowledgeable about
  the subject you are researching.

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Some ideas for data collection

• Springboarding
• Use secondary information as a starting point
  rather than as an end.
• Contact the author of the article, contact those
  mentioned in the article.
• Help Wanted Ads
• They can tell you the skills an organization
  seeks. If you know their desired skills, you may
  be able to identify what they are preparing to
  do.
• You may need someone in your own company to
  interpret what likely actions can be undertaken
  with the skills sought in the ad.

16
Some ideas for data collection

• Check the companys home page
• Look for speeches, press releases, job
  announcements, etc.
• Most press releases are never published (only
  about 3 are actually printed by newspapers and
  magazines,) so you may learn something here that
  is not available elsewhere.

17
Some ideas for data collection

• Patents
• Try the US Patent Office at http//www.uspto.gov/p
  atft/index.html.

18
Some ideas for data collection

• Government documents
• UCC Filings (check with the county clerk)
• Mandated reports (EPA, FDA, etc.)
• Use the Freedom of Information Act (FOIA)
• How do you make a FOIA request? Click Here

19
Some ideas for data collection

• Trade Shows
• Prepare for a trade show well in advance, and
  organize your staff in attendance (use a
  quarterback)
• There are few opportunities better than trade
  shows for learning what your competitors are up
  to!

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Interviewing

• When in doubt, start with Public Relations.
• Get the other persons name.
• Dont deceive.
• Be charming (smile when you dial), and let them
  show you how much they know.
• Use information youve collected as bait.
• Coax numbers by using ranges
• Would you say Company X has between 40-60
  employees?

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Things to note about a competitor at a trade show
(Source Fuld and Company)

• Booth size/location
• Product literature displayed
• Seniority of booth personnel
• Price sheets
• Seminars presented and attended by personnel
• Questions asked by personnel

• Questions asked during product demonstrations
• Availability/release dates
• Bundling
• Types of technologies used and their
  generalizability

22
Using the Internet for Gathering Data

• Beware the accuracy of on-line data
• The Pierre Sallinger Effect (usenet)
• Track down the source and verify what was written
• Keep your focus - avoid tangents unrelated to the
  research question.
• You will be collecting data, you dont collect
  analysis or intelligence - its your job to
  convert information to intelligence.

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Using the Internet for Gathering Data

• Beware articles with 1-2 sources for all data.
• Be skeptical if an article has relatively few
  sources, or if it depends on 1-2 people for all
  of its information.
• Also, you should check subsequent issues to see
  if any corrections were run on the article in
  question

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Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• It is any useful business information that is not
  generally known.
• Examples A trick to make a process work faster,
  salary information, a strategic plan, etc.
• A trade secret is not a patent.
• Patents are registered with the govt. and provide
  government protection for a specific period of
  time
• Trade secrets are not registered but can last
  indefinitely, as long as they are not revealed or
  someone else independently discovers the same
  information.

25
Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• Three types of information that cannot be
  considered a trade secret.
• Information generally known to professionals in
  the field.
• Employee skills (knowledge of how to sell is not
  a trade secret, but knowledge about customers may
  be)
• Readily ascertainable data (reverse engineering
  if it can be done in a few hours)

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Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• Elements of a trade secret
• Secrecy the information has to be a secret.
• Value a competitive advantage must exist by
  keeping the information secret.
• Reasonable efforts A reasonable attempt has been
  made to keep the information secret.

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Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• Misappropriation of Trade Secrets
• Breach of confidence When an employee, former
  employee, vendor, or partner discloses
  information.
• The relationship does not have to be in writing
  to be enforceable.
• It is also illegal to receive unauthorized
  information when you know or should have known
  that it is a trade secret (calling up pretending
  to be a customer to get info on an unannounced
  product.)

28
Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• Misappropriation of Trade Secrets
• Improper Means/Espionage It includes the obvious
  such as eavesdropping equipment, stealing
  laptops, hacking into computers, but it also can
  include
• Aerial photography over a site that has taken
  lengths to prohibit access
• Reverse engineering of some software.
• Reverse engineering of products not yet available
  or of those that are quite complex.

29
Trade Secrets (from Pooley and Halligan,
Intelligence and the Law in Millennium
Intelligence (2000) by Jerry Miller (CyberAge
Books)

• What are the consequences for violators?
• Forced to stop using the secret information (can
  be disastrous if it has been built into a product
  cant sell the product can even force a
  product or company to be shut down)
• Damages

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Economic Espionage Act of 1996

• Makes the theft of trade secrets a crime
• What is a trade secret? It encompasses all
  types of financial, business, scientific,
  technical economic, and engineering information.
  These can take the form of patterns, plans,
  compilations, program devices, formulas, designs,
  prototypes, methods, techniques, processes,
  procedures, programs, or codes. (Shaker and
  Gembicki, 1999)
• Two stipulations
• Owner must have taken reasonable measures to keep
  the information secret.
• The informations value comes from being kept a
  secret.

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Economic Espionage

• The Economic Espionage Act of 1996
• Enacted to help protect US companies from spying,
  particularly by foreign companies.
• Most prosecuted cases have been against US
  companies staling trade secrets from other US
  companies.
• Has your organization been the target of
  information espionage? Yes 69
• If yes, did you report this to law enforcement?
  No 86
• 85 of companies have detected over 20 successful
  unauthorized acesses to their computer systems
  (1997)

32
Ten Commandments of Intelligence Gathering(from
Fuld Company)

• Thou shalt not lie when representing thyself.
• Thou shalt observe they companys legal
  guidelines as set forth by thy legal counsel.
• Thou shalt not secretly tape record an interview.
• Thou shalt not bribe.
• Thou shalt not plant eavesdropping devices.
• Thou shalt not deliberately mislead anyone in an
  interview.
• Thou shalt not swap price information with a
  competitor.
• Thou shalt not swap misinformation.
• Thou shalt not steal a trade secret (or hire a
  competitors employee to learn a trade secret.)
• Thou shalt not knowingly pump someone for
  information if it may sacrifice that persons job
  or reputation.