This unit is also important in the context of developing business objectives, plans and strategies since the ability to craft measurable objectives (to accomplish the corporate goal) depends upon knowing the Competitive Environment.

Secondly, part of a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) requires 

• knowing opportunities, a company may launch a product that makes your product more attractive when used in combination - but if you don't have enough inventory, you may lose the opportunity - competitive intel can help you "ramp up"
• knowing what the competition is doing - a threat may be the competition launching a competitive version of your product
• knowing your weaknesses is often in direct comparison to the competition's strength - you need competitor intel to know when the competition is going to do something that may make your product line look less attractive

Competitor Intelligence

• a determining factor in beating the competition by getting new products to the commercialization stage faster
• also important in determining what your competition has future plans for, so you can scoop them
• not just for big companies, but also medium and small sized companies
• can be technology assisted "teckint", technical intelligence
• and also "human based" "humint", human intelligence

WTGR

Who?

Business competitors are:

• Other organizations offering the same product or service now 

- obvious. 
• Other organizations offering similarproducts or services now 

- also somewhat obvious
• Other organizations offering a variation on a product or service, that you cannot
• Organizations that could offer the same or similar products or services in the future 

- not so obvious
- like Rogers video stores getting into the cell phone market to compete w Bell Mobility
• Organizations that could remove the need for a product or service we sell

- not obvious at all, but really important to know who is going to make you extinct
- like the internet removing the need for encyclopedia's
- like www.canada411.ca removing the need for "white pages"

Gölin  and Withvoet established that "it is clear that the use of competitive intelligence has grown in importance as corporate activity. Furthermore, companies are increasingly facing an environment characterised by speed of development and uncertainty."

Gölin  and Withvoet  said "competitive intelligence has a major importance in bringing the possibility of managing speed of development and uncertainty. If competitive intelligence is continuously gained, within as well as outside the industry it brings security to the e-strategy development through a clearer picture about reality and it may also lead to seeing trends, which increases the possibility of reacting quickly to changes and not being surprised."

It is the key point about being able to "react quickly" which is a particularly important point for us to remember studying e-commerce in the North American environment.

WTGR

Global
Perspective

Sometimes .... the study of business strategy in some colleges and universities has had a "eurocentric perspective".

As North Americans increasingly see the

• economic environment
• political regulatory legal environment
• social-cultual environment
• competitive environment
• technological environment

Historical
Perspective

• Whereas Canada's largest trading partners (aside from the United States) are China and Japan
• Whereas the competitiveness of Canadian companies doing business in Asia depends on understanding the strategies of the leading Asian companies
• Whereas Chinese and Japanese companies are world leaders in global trade growth inside, and outside Asia
• Whereas specific historical personalities in Chinese and Japanese cultural have had a lasting impact on business practices and strategies in contemporary times
• ... it makes sense to try to understand the philosophical and social-cultural backgrounds of business strategy in Chinese and Japanese companies

Historical
Perspective

Several web sites explain that almost nothing is known about his life except that he was a Chinese military general who helped the King Ho-lu capture the city of Ying, bringing about the fall of the Ch'u state in 506 B.C.E. Sun Tzu is best known today for a collection of essays called The Art of War, which scholars believe is the world's oldest military writing on strategy. The book was translated by Father J. J. M. Amiot, a French Jesuit priest.

"All warfare is based on deception," 
"The supreme art of war is to subdue the enemy without fighting,"
"If you know yourself, but not your enemy, for every battle won, you will suffer a loss."

A number of quoteable quotes are used by Sun Tzu in business all over the world.
For example, to justify early entry to the market, one web site says
"Those who arrive early at the battlefield will be in a position  to take the initiative."
- like Pepsi getting into the Russian market after glasnost, before Coke
- like Google scanning books, before Yahoo
- like Mapquest preceding Google Earth
 

however there is another expression
"the second mouse gets the cheese", which is an encouragement to companies that do NOT have first mover advantage - they can use competitor intelligence and develop business and marketing plans and strategies to avoid the mistakes of the big first movers and industry leaders and develop a competitive market segment

Historical
Perspective

Historical
Perspective

"To attain the Way of strategy as a warrior you must study fully other martial arts" fromGo Rin No Sho - Book of Five Rings a very popular book on wall street in the early 1990's - this website  http://www.samurai.com/5rings/ contained the translation by Victor Harris and was HTML'd by Bryan Fullerton (link not functional Oct 2012)

** - Prof. Richardson lived in Japan and has a black belt in iaido, the art of the Japanese sword

Strategy
Planning

Historical
Perspective

Chapter 5

and
Todd Mooradian, Kurt Matzler and Lawrence Ring
Strategic Marketing, Prentice Hall / Pearson, beginning on p. 101

List of things you should look for on a competitor's web site: sources of competitor's data

• vision and mission statements
• annual reports
• annual speech of the chairman / CEO to shareholders
• analyst reports
• media
• press releases
• articles mentioning them in newspapers and magazines
• events
• their booth at trade shows, exhibition, fairs
• soonsorship of activities
• people
• former employees
• existing employees (sensitive !)
• employees of companies that they do business with
• shared suppliers
• shared distributors
• look and feel of the graphics
• attempts to collect user information
• offering of free product or services for supplying profile information
• use of cookies
• password protected areas for "special customers" goes towards upselling
• process of buying (if e-commerce)
• use of shopping baskets
• credit cards accepted
• level of credit card security processes
• navigation, can you find what you want
• search engine within the site
• does the layout reflect banner ads they us on other sites
• what reciprocity do they have with other advertisers in banners and pop-ups
• who are they associated with
• who links to them
• who do they link to
• what associations are they members of
• what chambers of commerce to they participate in
• how well do they market the site
• can you find the page by using the URL in major search engines
• do they use special words in their META tags that might be helpful for you to copy
• how advanced is their SEO Search Engine Optimization
• how advanced is their SMO Social Media Optimization
• how sophisticated is the source code HTML, flash, XML etc.

Info?
Intelligence?

First - keep in mind not all information is useful. Sometimes the collection of massive amounts of data has no consequence unless that collection can be done in a way which allows the data to be synthesized, indexed and retrieved - then it becomes information

Secondly - the prime difference between information and intelligence is that
intelligence is essentially information that allows you to make a strategic decision

A former CIA officer explains that, for them, intelligence was a subcategory of information and for them this meant information that was obtained in a clandestine way, largely through covert methods.

These days (2006) information does not necessarily have to be collected in a covert way to be considered intelligence, basically, it is information that is collected, then manipulated, ranked, verified such that it can be used to make a strategic decision of great importance.
So, in a sense, one could say that intelligence is information that is critically useful, NOW.

WTGR

 http://dialspace.dial.pipex.com/aware/competitor-analysis.shtml#Convert (link not working Oct 2012)
"... the relevance and importance of each piece of information needs to be interpreted and analyzed - on its own and in conjunction with other information, the other pieces in the jigsaw. This is where information starts to become intelligence."

Info?
Intelligence?

Many North American military units use the term "actionable intelligence", meaning "really good info they can use"

Here is an example

Country "Z" has 4 nuclear reactors. These reactors are in the process of being converted to make enriched uranium. Enriched uranium can be used for making nuclear weapons
- while sensational, this is just information

Dr. XXXXX YYYYYYYY of the Z Agency has succeeded in making "X" amount of enriched uranium on January 4th 2006 and this is being carried in a truck driving from A to B at 4:30 PM on Jan 5th. The truck is black and in the center of a convey of 2 other vehicles northbound on Hwy 123
- that is actionable intelligence because it is information specific enough that a military operation can proceed with "due consequence".

WTGR

Info?
Intelligence?

Most people know that all cell phones sold since 2004 have GPS capability which may or may not be activated depending on the jurisdiction.

Here is an example

Rogers has a joint venture with Nokia to develop a chip that can be used for e-payment systems. 
- while important, and newsworthy, this is just information

Rogers is two weeks away from signing a 2 year agreement with Royal Bank to allow all Rogers Cell phones to be used as e-payment proximity devices, based on RFID technology  with all RBC interac stations in the greater Toronto region beginning in July 2006.
- that is actionable intelligence because it is information specific enough that a competitor such as Bell Mobility could proceed to develop a JV with Scotiabank such that Rogers would not have a monopoly in this area for too long.

WTGR

Humint !

competitive 
executive
recruitment

Techint = Technical Intelligence
That is to say intelligence that is gathered by technical means, such as aerial photographs from a reconnaissance drone or high flying spy plane, or audio recordings from a bug, or DNA gathered by various methods to determine the ID of some suspect

Humint = Human Intelligence
Meaning a person collects the information for you by direct contact.
Sometimes Teckint, like an aerial photograph, is good because you save the risk of a spy being captured on the ground. Other times, and aerial photograph is not good enough because the subject of concern is inside a building and you need "eyes on" to determine some critical situation and that can only be affected by having a spy there with "boots on the ground".

In terms of Competitor Intelligence, it can be the difference between spending a lot of money on technical resources to acquire information and intelligence, or use money to bribe someone, or cause someone to reveal corporate secrets.

Sometimes technical access to another company's secrets could put the perpetrator in a risky situation of being discovered - ie. hacking in to their server could get you in to a lot of trouble if you are caught.

So instead of doing something that may be illegal, and may cause the perpetrator to be caught, one of the simple ways companies acquire critical information from another company is to simply hire away the key people by offering them a very very large salary increase, or offering them the chance to do something very kewl that they could not do with their former employer.

Competitor Intelligence can be acquired by acquiring the competitor's people.

Some companies call this poaching, other companies simply call this "competitive executive recruitment"
for a list of the various categories of intelligence in addition to teckint and humint, check
 http://www.forces.ca/en/job/intelligenceofficer-76(link works Oct 2012)
 http://www.recruiting.forces.gc.ca/v3/engraph/jobs/jobs.aspx?id=82&bhcp=1

Techint Strategies

Sometimes technical access to another company's secrets could put the perpetrator in a risky situation of being discovered 
- ie. hacking in to their server could get you in to a lot of trouble if you are caught. 
 

www.IronMountain.ca

Companies also put up safeguards, utilizing secure document destruction from in-house or outsourced companies like  Iron Mountain  to shred sensitive information and manage secure digital documents.

Using companies such as Iron Mountain also helps defend against Dumpster Diving (a slang expression used for people searching your garbage for sensitive files which could be used for unauthorized I.T. access) Listen also to the CBC Radio interview I gave in 2006 about Dumpster Diving and document shredding  http://people.senecac.on.ca/tim.richardson/audio/IdentityTheft64kbps.mp3

 

Humint !

competitive 
executive
recruitment

George said "I enjoyed the lecture about competitive intelligence that we had last Tuesday especially when you spoke about human intelligence. I find that this topic is extremely interesting as very often we forget that competitive intelligence is not limited to having the best hardware or software. Employees play an important role in intelligence as they even the best hardware and software cannot compete with what the human mind knows. The F1 racing industry is an industry that prizes human intelligence highly. Since the number of people working within the industry is fairly limited, the people in there are highly valued. One such person that I've read about is Adrian Newey. He is considered to be one of the top designers in the Formula One world. I've found an article that shows how human intelligence is valued and how different teams within the company tries to outbid each other to get the best human intelligence available."

George provided the URL to the story at
 http://www.theage.com.au/news/Sport/Newey-to-leave-McLaren-for-Red-Bull/2005/11/08/1131407636685.html Link still good in Oct 2012
In this story it explains that
"Red Bull announced a major coup on Tuesday [2007 Jan 30] with the signing from McLaren of top Formula One designer Adrian Newey, whose cars won a string of titles in the 1990s." So basically, Red Bull has a chance now to win some racing titles cause they hired away McLaren's top designer. It was also noted in the story that by joining Red Bull "Newey will also be reunited at Red Bull with Britain's David Coulthard, who spent nine seasons at McLaren up to the end of 2004."

Meaning, one of the strategies and tactics used by entreprises to hire away select talent is to create a situation that would be attractive by giving the "target" to rejoin people he/she had previously worked with. This is playing to the well understood aspect of employment - that being one of the main reasons people do the job they do is because of the workplace environment and who they get to work with.

Air Canada
WestJet

"Expert to probe Air Canada-WestJet spying case" is the title of a story July  2004 on the CTV website

The companies agreed Thursday to find an expert to search for relevant documents at WestJet in connection with Air Canada's lawsuit alleging corporate spying.

Air Canada claims that "espionage on a massive scale" took place at the home of WestJet vice president Mark Hill. It wants to search WestJet's records for evidence that WestJet used information from an Air Canada employee-only website to plan its flight schedule and expansion."
.

"Jetsgo caught up in Air Canada-WestJet lawsuit" is the title of a story Sept 2004 in The Toronto Star

BY ALLAN SWIFT
FROM CANADIAN PRESS

Swift writes "Discount airline Jetsgo has been caught up in the legal battles between Air Canada and WestJet Airlines over alleged corporate spying. Jetsgo president Michel Leblanc said today it was "highly disturbing" to discover that Air Canada private eyes found shredded documents related to Jetsgo's operations in a waste bin outside the home of a former WestJet executive who allegedly spied on Air Canada. 

Swift explains this comes from an earlier story in 2004 about  how "Air Canada sued WestJet and two of its employees earlier this year, claiming they gained access to an Air Canada employee website last year and this year to check seat availability....In court documents, WestJet vice president Mark Hill has admitted that he did access the Air Canada employee-only website using the password and PIN of a former Air Canada employee now working for WestJet. Air Canada claims WestJet logged onto the website thousands of times between May 15, 2003 and March 19, 2004.

The site provides all of Air Canada's ticket sale information. 

A WestJet executive had used the Password and Userid of an Air Canada employee to look at confidential information on the Air Canada intranet.

A.K.A.
Corporate
Espionage

UTM student Simeon K. in MGD415 in Jan 2008 sent and email to say "I got very interested into the topic about competitor intelligence so that I looked for some information about it. I found an interesting article, dated January 2008, called "Countering corporate espionage". I think the information in this article, written by Sally Whittle @   http://resources.zdnet.co.uk/articles/0,1000001991,39291900,00.htm will be useful in relation to the mentioned topic. I made a summary of the article and added a few thoughts of mine as well."

"According to a research, conducted by Pricewaterhouse Coopers, corporate espionage costs the world's 1000 largest companies more than $45 bn every year. The losses doubled between 1990 and 2000. It is important to notice that the corporate espionage is increasing rapidly, as more information is put onto corporate networks, which consequently means it is increasingly in the reach of hackers."

in the article http://resources.zdnet.co.uk/articles/0,1000001991,39291900,00.htm
Whittle writes that "Paul King, a senior security adviser with Cisco, says that it's difficult to know exactly how common corporate espionage is because most victims never report the attack to the police, fearful of the consequences of going public. Most companies would not want to confess in public that their secrets were stolen because this will affect negatively on their reputation. A recent example would be Winners, announcing the credit card theft from their servers."

Simeon adds
"According to the article, the first thing a company must do is to close the most obvious loopholes – especially the ones that can be exploited by hackers without even breaking the law. A good way is Google hacking – using a really smart Google searches to find information left open on web servers. A hacker may find pieces of information regarding a project that can be used as the basis of an attack (pretending to be inside the company or launching a social-engineering attack)." 

WTGR explains
Google hacking is a relatively new (2007) term that refers to the techniques associated with creating complex search engine queries in order to sift through lots of content and access particular pages on a server that may be vulnerable. For example, some websites contain "unlined" pages with employee home contact information as part of an extranet function.

Air Canada
WestJet

Air Canada
WestJet

May 2006 WestJet agrees to pay $15.5 million to Air Canada after Air Canada sues WestJet Prof. Richardson was interviewed by journalist Naunidhi Kaur Senior Writer: IT World Canada for comments on the story.

I (WTGR) explained that the reason the WestJet situation took place is directly related to the intense competitive environment of the airline industry. The intensity of competition causes all airlines to use competitor intelligence as strategically as possibly in order to obtain small margins of advantage in a tough economic environment hit by the aftershocks of tourism travel dropping post 9/11 and the high gas prices beginning in 2005.

I also told Kaur that while it was bad for WestJet to have used some particular methods to access Air Canada passenger traffic data, on the other hand, Air Canada should have been more diligent in following SOPs (standard operating procedures) to 

1. change the IT database access that former employes may have after leaving the company.

Unlike the movies, stealing corporate information is not common - however it is perfectly reasonable to "steal people" ;.... but it is not called that, it is called Competitive Executive Recruitment.

Therefore another SOP that companies employ is to 

2. have non-compete clauses signed by executives so that if they leave the company, for any reason, they agree not to take up employment with any other company in the industry sector for a particular period of time.

In the case of the WestJet - Air Canada situation, Air Canada was vulnerable because they did not follow two basic SOPs for business intelligence.

WTGR

 McLaren

1. Collecting the information

2. Converting information into intelligence 
    o Collate and catalogue it, 
    o Verify the authenticity through additional sources or additional methods
    o Interpret it and Analyse it 

3. Communicating the intelligence.
    o meaning letting decision makers know the information so they can do something
                        o national intelligence agencies exist to allow senior political leaders to make
                                policy changes
                        o corporate intelligence people usually report to the V.P. Marketing so 
                               product or price changes can be made or promotional 
                               campaigns can be adapted

4. Countering any adverse competitor actions. 

A. Weiss explains
"Too many companies are overly secretive, protecting information that all their customers and competitors already know. Secrecy is important. It can be extremely dangerous to let a competitor know about the new product being developed. However, letting the sales force attempt to sell products without a full awareness of the products strengths and weaknesses relative to the competition is like sending them out with one arm tied behind their back. They will be unable to answer objections and comparisons convincingly, and thus are less likely to make the sale."

...be discreet

WTGR

Gary H. Anthes, writing for COMPUTERWORLD, had a story carried on CNN about web sites revealing too much. Anthes quotes Robert Aaron who says "Companies give you information about their customers and case studies about their products. A good analyst can look at that and kind of reverse-engineer what the company is up to,"  Anthes quotes Ira Winkler who explains "Web site development is usually driven by marketing people who are cheerleaders for the company and its products... but they often are not aware of proprietary information issues, and they put out more information than they should."

A couple of years ago, when they first got their web site operational, Los Alamos National Laboratory, the nuclear weapons research center near Santa Fe, N.M., combined information for internal as well as external users at its Web site. For example, its Weapons Neutron Research Facility lists the numbers of employees' office and cellular phones.!!!

Larry Watson, program manager for the FBI's Awareness of National Security Issues and Response unit says "Publishing employee phone lists facilitates "social engineering" -- essentially sweet-talking secrets out of employees". 

Using "social engineering" tricks can be a valuable part of accessing competitive information but the specific techniques and tactics may be immoral even if they are not illegal so some people may find it uncomfortable to be involved in this method of collecting information.

of
Competitor 
Intelligence

.
If you search Google (Jan 2006) with the words "Competitor intelligence" & Canada, our page on witiger.com ranks # 1 (in 2012 we still make the first page)

FYI, most competitor intelligence in Canada is not done by independent firms but rather this function has become part of the services offered by the large accounting firms who also have IT security services and other related capabilities

 www.deloitte.com      www.ey.com/can    www.kpmg.ca/en/ www.bdo.ca

Gathering too much info is not good

"The possession of information is often considered a critical part of corporate competitiveness. Information itself is not so valuable - what is valuable is the tools to aggregate the information, manipulate it, synthesize it so you can draw conclusions which can assist in decisions"

 www.witiger.com/quotes.htm

on
Competitor
Intelligence

Sources

in-class
exercise for MGDC41
Oct 29

List as many possible sources and resources for intelligence (humint and teckint) on the competitors of a company

• Group A - producing and/or selling a branded consumer product in the GTA
• Group B - producing and/or selling a branded consumer service in the GTA
• Group C - producing and/or selling an industrial (B2B) product in the GTA
• Group D - producing and/or selling an industrial (B2B) service in the GTA

• if you want to know the "diversity" of the employees of a target company, stand outside the doors to the main entrance and watch people entering and leaving at the beginning and ending of each day
• if you want to know personal relationships among employees - look at their facebook account to see info posted about company social events - social media in general can be very revealing since many employees are very indiscreet about posting personal and work photos, videos and comments
• former employees who have been laid off or fired may post comments about the company in social media
• suppliers of services (people who catered a company function) who may have been dropped, or had their business cut back
• personal blogs posted by spouses / partners of senior execs
• volunteer activities of company executives
• real estate information on property owned by the target company