Competitive Intelligence: Gathering, Analysing And Putting It to Work

302 Pages·2005·11.44 MB·English

by  Christopher Murphy

Competitive Intelligence
This page intentionally left blank
Competitive
Intelligence
Gathering, Analysing and Putting it to Work
CHRISTOPHER MURPHY
© Christopher Murphy 2005
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise
without the prior permission of the publisher.
Published by
Gower Publishing Limited
Gower House
Croft Road
Aldershot
Hants GU11 3HR
England
Gower Publishing Company
Suite 420
101 Cherry Street
Burlington
VT 05401-4405
USA
Christopher Murphy has asserted his right under the Copyright, Designs and Patents Act 1988 to be
identified as the author of this work.
British Library Cataloguing in Publication Data
Murphy, Christopher
Competitive intelligence: gathering, analysing and putting
it to work
1. Business intelligence
I. Title
658.4'72
0 566 08537 2
Library of Congress Control Number: 2005929611
Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall.
Contents
List of Figures xi
List of Tables xiii
Foreword by Michael Ridpath xv
Acknowledgements xvii
Introduction xxi
PART I: STEPS TOWARDS MORE EFFECTIVE COMPETITIVE INTELLIGENCE
Understanding the competitive landscape and the contributing to better decision-making
1 Competitor Intelligence is Not Enough! 3
Competitorintelligence 4
Competitive intelligence 6
CI is not limited to competitive issues – the role of cooperative intelligence 8
What should this discipline be called? 9
Conclusions 10
2 How is CI being Conducted and How Should it be Performed? 11
How is it being done? 11
How it should be done 13
Conclusions 17
3 How do Companies Compete? 19
Competition in economic theory 19
Porter’s three axes of competition 20
‘Five forces’ model 23
Conclusions 24
4 Key Internal Business Drivers 25
Critical success factors 25
Resources 26
Business processes 33
Alliances 35
Conclusions 36
5 Key External Business Drivers 37
Social and cultural drivers 37
Technological drivers 38
Economic drivers 39
vi Competitive Intelligence
Environmental drivers 41
Political, regulatory and legal drivers 41
Conclusions 43
6 For Goodness’ Sake! – Legal and Ethical Aspects of CI 45
Illicit means of gathering intelligence 45
The United States Industrial Espionage Act 1996 47
The SCIP Code of Ethics 47
Does the SCIP code work? 50
Conclusions 51
PART II: COLLECTING DATA
7 Commencing the CI Quest – Planning and Initial Data Gathering 55
Planning 56
Data collection 58
Where to find the data sought – the golden rule of research 58
The research framework 59
Tabling a hypothesis 60
Striving for excellence in research 60
Qualities of excellent researchers 61
Researcher self-development 63
Management support for researchers is essential 64
Conclusions 64
8 Understanding Sectors 65
Demand features 65
Organization of supply 68
Sources for studying sectors 68
Conclusions 74
9 Refining the Search 75
Handling initial research results 77
Competing hypothesis analysis 78
Linchpin analysis 80
Knowing when to stop 81
Conclusions 82
10 Systematic Sources – Regular Corporate Document Filings 83
Unlimited and limited liability 83
Legal forms for carrying on business 84
Companies 86
Standards of filing enforcement 89
Conclusions 91
11 Systematic Sources – ‘One-off’ Corporate Filings 93
Time limits for filing and company’s own public domain registers 95
Contents vii
Prospectuses for public offers of securities 96
Listed companies 97
Circulars 98
Shareholder data 98
Patents 99
Trade marks 100
Land 101
Ships and aircraft 101
Other regulatory filings 101
Conclusions 102
12 Foreign Sources 103
Overseas sectoral research 104
Researching foreign companies 105
US company research 109
Conclusions 111
13 Human Source Intelligence 113
Planning interviews 113
Who is to be approached? 114
Approach by email 114
Persuading people to be interviewed 115
Handling rejection 115
Conducting the interview 117
Recording the interview 119
Keeping in contact with interviewees 120
A warning regarding being accused of anti-competitive conduct 120
Conclusions 120
14 Observing a Company 121
Corporate external communication 121
Trade show CI 122
Company visits 124
Conclusions 127
15 Creative Sources and Methods and the Craft of Analysis 129
Creative data gathering 129
Creative ways of solving problems 131
Analysis 133
Conclusions 135
PART III: TURNING RAW DATA INTO FINISHED INTELLIGENCE
Analysis and presentation
16 Figuring Out the Numbers – Structure and Content of Company Accounts 139
Balance sheet 139
Profit and loss account 147
viii Competitive Intelligence
Cash flow statement 150
Notes to the accounts 153
17 Running the Numbers – Understanding Financial Statements 155
The twin objectives of companies 155
Accounting policies 156
Ratio analysis 157
Financial and performance ratios 158
Interest cover and dividend cover 161
Profit margins 166
Returns on investment 168
Conclusions 170
18 Interpreting the Non-financial Sections of Company Accounts 171
Auditors’ report 172
Directors’ report 173
Chairman’s statement 176
Other reports 179
19 Assessing Information Quality 183
Data quality hierarchy 183
Source criticism 188
Misinformation and disinformation 189
Conclusions 192
20 Describing Companies 193
Corporate description checklist 193
Corporate culture 197
Role and status of individuals within a company and their interrelationships 204
Conclusions 207
21 Comparing and Positioning Companies 209
Identifying competitors 209
Benchmarking 211
Gap analysis 213
Conjoint analysis 214
Win-loss analysis 214
Conclusions 216
22 What does the Future Hold? 217
Forecasting techniques 218
Alternative futures 221
Technology forecasting 223
Gauging future competitor moves 225
Conclusions 227
Contents ix
23 The End Crowns All – Disseminating Competitive Intelligence 229
Content accuracy and credibility 229
Means and styles of communication 233
Conclusions 239
24 Intelligence Countersteps 241
Strong security does not entail unreasonable secrecy and refusal to communicate 241
Operational Security model 242
Physical security 242
Paper and electronic documents 243
Employees 244
External partners 245
External activities and dissemination of information 245
Conclusions 247
PART IV: APPENDICES
I CI Resources 251
II CI Terminology 255
III Accounting Terminology 257
IV US/UK Accounting Terms 261
Index 263