Marketing Management

Introduction to Intelligence

Paul Dishman, Ph.D.Department of Business Management

Marriott School of Management

Brigham Young University

Lecture 7

Paul Dishman, Ph.D.

Marketing Management

How do you get to be competitive?

• Out-think and out-perform the competition

• Proactive, offensive actions– reduce decision uncertainty– spot new threats– monitor competitive initiatives– exploit competitive vulnerabilities

Paul Dishman, Ph.D.

Marketing Management

Intelligence and CompetitionIntelligence and Competition

“In a competitive world whose companies have access to the same data, who will excel at turning data into information and then analyzing the information quickly and intelligently enough to generate superior knowledge?”

-Max Hopper, former Chairformer Chair

“Scale is not all positive in this business.

Cleverness is the positive in this business.”

- Bill Gates, 1993

Paul Dishman, Ph.D.

Marketing Management

What is Competitive Intelligence?“Competitive Intelligence is…a systematic & ethical program for gathering and analyzing information about yourcompetitors’ activitiesand generalbusiness trendsto further your owncompany’s goals.”

Larry Kahaner, 1996

Paul Dishman, Ph.D.

Marketing Management

What is Competitive Intelligence?

• Any intelligence product or process that makes you more competitive

• Includes– marketing intelligence, business intelligence,

competitive technical intelligence, competitive financial intelligence, competitor intelligence, competitive analysis, etc.

• Converting information into actionable intelligence

Paul Dishman, Ph.D.

Marketing Management

Who uses CI?

vs.

Paul Dishman, Ph.D.

Marketing Management

What is Competitive Intelligence?

Internal

External

Strategic

Tactical

Operational

Source Purpose Target

Qualitative

Quantitative

End Product

Process

Project-based

On-going

Competitors

Customers

Suppliers

Relationships

Environmental

Individuals

Multi-disciplinary

Paul Dishman, Ph.D.

Marketing Management

Where does CI fit in the Firm?

Operations Research- production- audits- benchmarking- etc.

Technical Research- R&D- IP- competitors- etc.

MarketResearch- products- customers- competitors- etc.

CompanyResearch- suppliers- customers- competitors- relationships

Business Intelligence

Competitive Intelligence

EnvironmentalResearch- legal/political- competitive- demographic- etc.

Paul Dishman, Ph.D.

Marketing Management

Model of CI

Analysis Communication DecisionPlanning and Focus

Collection

Intelligence Process and Structure

Organizational Awareness and Culture

Calof & Dishman 2000

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Marketing Management

Essence of CI• CI is legally gathering available information• Not James Bond, more like “Sherlock Holmes

meets Bob Woodward”• Systematic, ethical research approach to

knowledge acquisition• Virtually everything you need to know is

available, albeit hard to find• Collection techniques, analysis mentality,

decision makers

Paul Dishman, Ph.D.

Marketing Management

The State of CI in Industry

• 22% of Fortune 500 have CI divisions• 80% less than 10 years old• P&G, Cisco, Motorola, Shell, AT&T, Lucent,

Dow, Kodak, 3M, Quest, IBM, intel…• Baldridge Award Winners: 7 of last 10• 10 universities in US including:

– BYU, Wharton, UCLA, U. Pitt., Drexel, AGSIM, Indiana, Tennessee, Mercryhurst, Idaho State

Paul Dishman, Ph.D.

Marketing Management

Applications of CI• New product introductions• Changes in market conditions, structure• Actions of competitors• Industry trends (and lessons)• Acquisition targets• New technologies, processes, IP• Benchmarking• Supplier evaluation• Negotiation preparation• Talent searches

Paul Dishman, Ph.D.

Marketing Management

• 6,000 members• 2,500 attendees to annual conference• March 8-9, 2001, Seattle• 57 Information vendors• Membership is highly recommended• Student dues only $25.00

Paul Dishman, Ph.D.

Marketing Management

SCIP Overview

• Educational seminars & conferences throughout year• Refereed journal of competitive & business strategies

(Competitive Intelligence Review), a quarterly magazine of CI issues, a monthly Actionable Intelligence newsletter, on-line Membership Directory

• Supports the research and publication of materials on competitive & business strategy.

• 30 world-wide chapters

Paul Dishman, Ph.D.

Marketing Management

Competitive Intelligence Review

Paul Dishman, Ph.D.

Marketing Management

For more info: www.scip.org

Paul Dishman, Ph.D.

Marketing Management

Other groups with interests in CI

• American Marketing Association

• Academy of Management

• Special Libraries Association

• International Association of Law Enforcement Intelligence Analysts

• American Accounting Association

• Account Management Association

Paul Dishman, Ph.D.

Marketing Management

CI Requires…

• Research and Investigation• Intensive Reading• Group Effort

– Analysis Capability– Multi-disciplinary: marketing, management,

finance, accounting, information systems, law, policy, science, math, products, psychology, etc.

– Multi-talented

• Dogged determination

Paul Dishman, Ph.D.

Marketing Management

What tools do we really need?

Analytical Tools• Boston Consulting

Group Grid• SWOT Analysis• DuPont Analysis• Bayesian Analysis• etc.

Intuitive Insight• Pattern matching• Exception

Identification• Complexity

Reduction• Contextual

Apperception• etc.

Paul Dishman, Ph.D.

Marketing Management

Can you find meaning in this?

Per-Share DataBook Value (mrq) $12.87 Earnings (ttm) $4.69 Earnings (mrq) $1.15 Sales (ttm) $50.29 Cash (mrq) $2.18 

Valuation RatiosPrice/Book (mrq) 7.77 Price/Earnings (ttm) 21.33 Price/Sales (ttm) 1.99 

Income StatementsSales (ttm) $90.0BEBITDA (ttm) $17.4BIncome available to common (ttm) $8.4B

Paul Dishman, Ph.D.

Marketing Management

Can you find meaning in this?

Paul Dishman, Ph.D.

Marketing Management

Can you find meaning in this?

Paul Dishman, Ph.D.

Marketing Management

Can you find meaning in this?IBM Semiconductor Executive King Leaves to Head AMI Semiconductor

Christine King, one of the top two executives in International Business Machines Corp.'s fast-growing semiconductor group, is leaving to head up a closely held competitor, according to people familiar with the matter. Ms. King, vice president, Semiconductor Products, IBM Microelectronics, reported to John Kelly, IBM's group vice president for technology. Ms. King will become chief executive of AMI Semiconductor, a small, closely held semiconductor company based in Pocatello, Idaho, the people said. AMI specializes in application-specific integrated circuits, known as Asics. Under Ms. King's leadership, IBM has become the world leader in Asic chips in the past two years.

Paul Dishman, Ph.D.

Marketing Management

What is needed for Management?

• Experience (you)• Personal Insights (you)• Intuition (you)• Tools (MBA)

• Which of these are more important?

• Do you hire content expertise and train to analyze or hire intuitive thinkers and train content?

Paul Dishman, Ph.D.

Marketing Management

Suggested Research Topics in CI

• What is the domain of CI?• Intelligence model theory development• Competitive analysis theory development• Personality fit between the roles within the CI process• The relationship between KM & CI• Network analysis• Impact of EEA, other laws• Cross-cultural/country applications of CI techniques• Intelligence in the Book of Mormon

Paul Dishman, Ph.D.

Marketing Management

Summary

• Very little investment to gain great rewards• Opportunity to gain short-term “good” business• Opportunity to gain long term competitive advantage• Necessary resource for Strategic Planning• Enhances the learning of the entire organization• Creates a sense of constant competition