current situation of use of business information in slovene organizations with focus on competitive...
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Current situation of use of business information in Slovene organizations with focus on competitive intelligence
Ines Vrenko Peruško, MBA, GfK Gral-Iteo
AGENDA
A. Competitive Intelligence as Competitive Advantage
B. How well Slovene companies use information on competitors? – main research findings
C. Critical evaluation of state of CI in Slovenia
AAAA Competitive Intelligence as
Competitive Advantage
The key to any successful strategy is the ability
to IDENTIFY, DEVELOP AND SUSTAIN A COMPETITIVE ADVANTAGE VIS-A-VIS COMPETITORS (S. Hughes).
CI AS CI AS COMPANY’S COMPANY’S COMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGE
CI activities as a source of sustained competitive advantage
CI can help a firm in several ways:
• To understand how and where to find unique resources and capabilities to help a firm compete more effectively
• To create a repository of embedded knowledge throughout an organization (KM)
• To help a firm understand how a rival has developed their own unique capabilities
• To help prevent erosion of information (by implementing effective counter-intelligence)
CI AS CI AS COMPANY’S COMPANY’S COMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGE
BBBBHow well Slovene companies
use information on
competitors? – main
research
findings
STATE OF CI IN SLOVENIA vs. GERMANY: STATE OF CI IN SLOVENIA vs. GERMANY:
QUALITATIVE VIEWQUALITATIVE VIEW
GERMANY
• competitive analysis has long tradition ( steaming back from military history)• American terminology is not widely known and accepted• contributed significantly to CI literature, to some extent also to research• moderately successful SCIP penetration (currently 65 members)• in year 2000 there were 12 German-based CI consultancies (only 4 of them SCIP
members)• overall: CI seems to continue gaining momentum in Germany
STATE OF CI IN SLOVENIA vs. GERMANY: STATE OF CI IN SLOVENIA vs. GERMANY:
QUALITATIVE VIEWQUALITATIVE VIEW
SLOVENIA
• competitive analysis has no tradition ( due to closed, socialist economic regime)• terminology rather unknown• in recent years topic mentioned in business press only occasionally• very limited SCIP penetration (1 member), but some important positive trends!!! • no specialized CI service providers, software providers nor consultancies• no specialized CI courses or literature• overall: due to specifics of Slovene market (small market, relatively closed,
often not interesting for large MNC…) CI discipline is in its early stages (still “fighting” for its place on management’s agenda)
WHAT ABOUT USE OF BUSINESS INFORMATION IN GENERAL AND CI IN SLOVENE COMPANIES?
Primary research was needed…
• conducted by GfK Gral-Iteo on a sample of large companies (based on theoretical findings that firm’s age and size directly impact the type of information collected)
• web survey among general managers/managers of marketing or sales
• 38 completed interviews
• the only relevant research on CI in Slovenia (continuation of research conducted in 2004)
FREQUENCY OF USE OF OUTSIDE SOURCES OF FREQUENCY OF USE OF OUTSIDE SOURCES OF BUSINESS INFORMATION AND TYPES OF SOURCESBUSINESS INFORMATION AND TYPES OF SOURCES
34,2
5,3
18,4
10,5
2,6
2,6
26,3daily
few times perweek
once per week
few times permonth
few times peryear
less frequently
never
60% of interviewed companies use outside
sources of business information few times per
week or even daily;most domestic payable
databases
34,2
24,3
37,8
5,4
89,2domestic payable databases (e.g.
GVin, Kompass, Bonitete.si…)
domestic free databases(izvoznookno.si, PCMG…)
foreign payable databases (Dialog,Factiva, Reuters…)
foreign free databases (e.g. Yellowpages …)
DK
TYPES OF BUSINESS INFORMATION MOST OFTEN TYPES OF BUSINESS INFORMATION MOST OFTEN LOOKED FOR IN SOURCESLOOKED FOR IN SOURCES
78,9
55,3
52,6
50,0
36,8
31,6
28,9
26,3
18,4
18,4
13,2
84,2fin. and acc. information on
Slovene companiescredit ratings of Slovene
companiesinformation on sector or industry
segmentinformation on domestic and
foreign markets
market research
law and legislation
fairs and exhibitions
fin. and acc. information onforeign companiescountry information and
statistical datacredit ratings of foreign
companiesinformation of employees in
companies
standards and patents
Financial/accounting related information are the
most often looked for
COLLECTION OF INFORMATION ON COMPETITORS, COLLECTION OF INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND BUSINESS ENVIRONMENT, OPPORTUNITIES AND
THREATSTHREATS
no, never2,6%
yes, sometimes
44,7%
yes, but rarely2,6%
yes regulary50,1%
N=38
WHO WHO COLLECTSCOLLECTS INFORMATION ON COMPETITORS, INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND BUSINESS ENVIRONMENT, OPPORTUNITIES AND
THREATS?THREATS?
64,9
62,2
18,9
16,2
13,5
13,5
13,5
5,4
marketing department
sales department
market research department
department for strategicplanning
PR department
R&D department
management/ general manager
outside company
OthersN=38
• market research company• clipping company
HOW SUCCESSFUL ARE COLLECTORS OF HOW SUCCESSFUL ARE COLLECTORS OF INFORMATION?INFORMATION?
* Evaluated by only 2 companies
3,33,43,4
5,0
3,8 3,7 3,7
1
2
3
4
5
outside company* R&D department sales department department forstrategic planning
market researchdepartment
PR department marketingdepartment
SCALE 1- 51 – not successful at all
5- very successful
Most frequently mentioned as collector of information,
but evaluated as least successful in doing this
WHO WHO ANALYZESANALYZES INFORMATION ON COMPETITORS, INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND BUSINESS ENVIRONMENT, OPPORTUNITIES AND
THREATS?THREATS?
59,5
48,6
21,6
13,5
13,5
13,5
13,5
8,1
5,4
marketing department
sales department
department for strategicplanning
market research department
PR department
management/ general manager
management/ general manager
R&D department
finance and accountingdepartment
…N=38
Collectors and analyzers of information on
competitors are the same;conclusion in line with
German practice
WHO WHO RECEIVES AND USESRECEIVES AND USES INFORMATION ON INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, COMPETITORS, BUSINESS ENVIRONMENT,
OPPORTUNITIES AND THREATS?OPPORTUNITIES AND THREATS?
83,8
62,2
62,2
51,4
21,6
13,5
8,1
company's director or presidentof board
management of marketingdepartment
management of salesdepartment
members of board
management of strategicplanning department
management of productiondepartment
management of R&Ddepartment
…N=38
Receivers of information on competitors are higher in firm's hierarchy, but also
mgmt of marketing and sales departments
73,0 70,3
56,8 56,8
18,913,5
5,4
70,3
89,2
0%
20%
40%
60%
80%
100%
businesstrips/expertmeetings…
competitorsthemsleves
media internet databases chambers ofcommerce,statistical
offices etc.
final thesis,masterthesis,
doctoraldissertations
courts(economic
dpts….)
other
OPEN/ PUBLICLY AVAILABLEOPEN/ PUBLICLY AVAILABLE SOURCES OF SOURCES OF INFORMATION ON COMPETITORSINFORMATION ON COMPETITORS
From their marketing or other types of communication …
N=38
2,83,0
3,5
4,04,0
4,3
3,8
4,1
1
2
3
4
5
businesstrips/expertmeetings…
competitorsthemsleves
media internet databases chambers ofcommerce,
statistical officesetc.
final thesis,master thesis,
doctoraldissertations
courts (economicdpts….)
IMPORTANCE OF IMPORTANCE OF OPEN/ PUBLICLY AVAILABLEOPEN/ PUBLICLY AVAILABLE SOURCES OF INFORMATION ON COMPETITORSSOURCES OF INFORMATION ON COMPETITORS
N=38
SCALE 1- 51 – source not important at all
5- source very important
78,4
59,5
51,4
37,8
10,85,4
56,8
81,1
0%
20%
40%
60%
80%
100%
ownbuyers/customers
business partners suppliers own employees confidentialsources
outside providersof such information
persons coming totalks on
employment
students, personson probation…
OTHER/ PRIVATE SOURCESOTHER/ PRIVATE SOURCES OF INFORMATION ON OF INFORMATION ON COMPETITORSCOMPETITORS
Information obtained by management and other employees
from outside sourcesN=38
4,0
2,5
3,94,1
4,5
4,1
3,9 3,9
1
2
3
4
5
ownbuyers/customers
business partners suppliers own employees confidentialsources
outside providersof such
information
persons coming totalks on
employment
students, personson probation…
IMPORTANCE OF IMPORTANCE OF OTHER/ PRIVATE SOURCESOTHER/ PRIVATE SOURCES OF OF INFORMATION ON COMPETITORSINFORMATION ON COMPETITORS
N=38
SCALE 1- 51 – source not important at all
5- source very important
USE OF SOFTWARE SOLUTIONS FOR COLLECTION AND USE OF SOFTWARE SOLUTIONS FOR COLLECTION AND PROCESSING OF INFORMATION ON COMPETITORSPROCESSING OF INFORMATION ON COMPETITORS
NO86,5%
YES13,5%
• Crm, SALES Logix• IBON (?)
• GfK Leaftlet monitor (?)• Business secret
N=38
MANAGEMENT AWARNESS OF IMPORTANCE OF MANAGEMENT AWARNESS OF IMPORTANCE OF FOLLOWING INFORMATION ON COMPETITORSFOLLOWING INFORMATION ON COMPETITORS
NO, we don't value
such information
enough50,0%
NO, we totally
ignore such information
5,3% YES, we value
enough such
information44,7%
N=38
COMPETITIVE THREAT: EVALUATION OF COMPETITORS COMPETITIVE THREAT: EVALUATION OF COMPETITORS THAT REGULARLY AND SYSTEMATICALLY COLLECT THAT REGULARLY AND SYSTEMATICALLY COLLECT
INFORMATION ON THE COMPANYINFORMATION ON THE COMPANY
DK, can't evaluate
2,6%
YES, some of our
competitors do it
60,6%
NO2,6%
YES, most of our
competitors do it
34,2%
N=38
High awareness of competitors’ threat:
95% of managers believe competitors (all or some of them) collect information
on their companies!
COMPETITIVE THREAT: EVALUATION OF COMPETITORS COMPETITIVE THREAT: EVALUATION OF COMPETITORS HAVING AT THEIR DISPOSAL IMPORTANT INFORMATION HAVING AT THEIR DISPOSAL IMPORTANT INFORMATION
ABOUT THE COMPANYABOUT THE COMPANY
YES, they have some important
information about us
73,6%
DK, can't evaluate13,2%
YES, they have a lot of
important information
about us13,2%
Management is well aware of competitors’ CI
activities!
N=38
EVALUATION OF INTERNAL FLOW OF INFORMATION EVALUATION OF INTERNAL FLOW OF INFORMATION AND RECENT CHANGES RELATED TO CIAND RECENT CHANGES RELATED TO CI
GOOD INTERNAL FLOW OF INFORMATION
79% of interviewed managers estimate that important
information on competitors, which is at disposal of
company’s employees come to the management (decision-
makers) in companies
NO, but we plan to conduct such a
process34,2%
NO, we don't consider this
at all28,9%
YES, this process is
still going on in our
company36,8%
Is almost 30% of interviewed large
Slovene companies overly self-confident?
Large Slovene
Company
Business trips, expert meetings, fairs – the most frequently used open source
of information on competitors
Open sources
Buyers/customers, business partners, suppliers and employees –
all know a lot about competition
Private sources
80
% o
f ma
na
ge
rs b
elie
ve
im
po
rtan
t info
rma
tion
c
om
e to
co
mp
an
y’s
lea
de
rsh
ip
Most important information on:
1. buyers and customers2. suppliers and business partners
3. competing companies
Co
llected an
d an
alyzed in
Marketin
g an
d S
ales
Management
50% of companies do not value enough
information on competitors,
on business environment and
on new business opportunities and threats
CCCC Critical evaluation of state of
CI in Slovenia
TO SUMMARIZETO SUMMARIZE
• Research results indicate relatively high level of awareness of importance of CI activities among interviewed companies
• However, according to results of the survey standard CI practices are less developed
• While companies are aware of competitors’ CI actions, many decide not to take any actions in order to improve their own CI practices
• Possible hypothesis: large Slovene companies do it in more informal, less systematic way (less direct responsibility, less resources dedicated to SW solutions)?
• Possible reasons for such state of CI in Slovene companies: lack of competitive environment tradition (most today’s large companies established and grew in times of closed socialist regime) decades of market orientation toward ex-Yugoslav markets (accompanied by an impression of intuitive familiarity with those markets) small market (but with extremely educated consumers!) often not attractive for multinational companies (lack of transfer of some managerial practices, including CI) relatively closed economy (lack of competitive pressure from abroad) lack of providers of specialized CI software and consultancy (as a result of low demand) slow and selective transfer of new knowledge and best practices from abroad
TO SUMMARIZETO SUMMARIZE
Thank you for your Thank you for your attention!attention!
FOR MORE INFORMATION, PLEASE CONTACT:
Ines Vrenko Peruško, MBA, research consultant
Geni Arh, director of ad hoc department