Cross-cultural competitiveintelligence strategies

Phani Tej Adidam, Sampada Gajre and Shubhra KejriwalCollege of Business Administration, University of Nebraska at Omaha,

Omaha, Nebraska, USA

Abstract

Purpose – Competitive intelligence (CI) is a promising tool in the strategic planning arsenal of topmanagers. As companies expand globally, it is imperative that CI be conducted across nationalboundaries and cultures. The practice of CI in various international markets is clearly impacted by thecultural context of gathering and analyzing information. Therefore, one of the key ingredients tosuccessfully conducting CI globally is the ability to understand the local culture and businesspractices, and then integrate this knowledge within contemporary CI strategies. This paper aims toaddress these issues.

Design/methodology/approach – This study analyses CI practices in the developed markets ofEurope and Japan, as well as the emerging markets of China, Russia, South Africa, Latin America, andthe Middle East by using extant literature, primary as well as secondary sources.

Findings – Owning to the complexity of cross-cultural CI practices, often companies fail in theirentry into foreign markets. This is due to misjudgment and poor understanding of the countries’cultural, social, and political environment. As cultural factors have a major influence on the collection,analysis and outcome of any CI project, firms doing international business must have a crossculturally aware CI program, which can be established with the help of a five-step process as describedin the paper.

Research limitations/implications – This paper provides a snapshot of comparative CI practicesfrom across the globe, and contrasts developed and emerging CI practices. This is a qualitativereview-based paper, and hence does not have any empirical corroboration. Most the understanding isgleaned from the extant literature as well as our in-depth interviews with 12 CI consultants in variousglobal markets.

Practical implications – Global managers need CI in order to succeed in foreign markets. Most oftimes, these managers use the same CI practices that are being used in their home markets. This paperprovides a good approach through which they could develop a “cross-culturally aware” CI program intheir company.

Originality/value – Cultural factors play a major role in CI practices of firms across the globe. Thisresearch compares and contrasts CI practices in various cultures and markets, and provides some keyguidelines and approaches for global managers in order to conduct successful CI in a variety ofcultures. This research would be very valuable to global companies as it provides timely and practicalsolutions.

Keywords Competitive analysis, Cross-cultural studies, International marketing, Emerging markets

Paper type Research paper

IntroductionCompetitive Intelligence (CI) is a continuous and evolving process by which businessesassess the behavior and capabilities of its current and potential competitors to assist inmaintaining and developing a competitive advantage (Calof and Wright, 2008). Itinvolves discovering, analyzing, and using intelligence from publicly available,non-proprietary information sources and converting it into knowledge on a continuing

The current issue and full text archive of this journal is available at

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Received January 2009Revised April 2009Accepted April 2009

Marketing Intelligence & PlanningVol. 27 No. 5, 2009pp. 666-680q Emerald Group Publishing Limited0263-4503DOI 10.1108/02634500910977881

basis (Blenkhorn and Fleisher, 2005). This, in turn, assists companies in their strategicplanning activities (Hughes, 2005; Prescott, 1989). Furthermore, as intelligence isdeveloped in a systematic and formal basis, it allows top managers to make betterinformed decisions regarding future events (Dishman and Calof, 2008; Gilad, 2003).

International competitors continue to evolve and stretch their reach, requiring CIpractitioners to expand their collection and evaluation efforts beyond what would beused for the standard domestic competitor set and geographies (Wright and Calof,2006). This larger global focus requires a different set of tools and a distinct mindset(Glitman, 2007). Further, in order to practice CI in the international environment, weneed to apply two different toolsets. The first set addresses intelligence collectionthrough better understanding of the differences in business practices, and the secondfocuses on cultural differences (Blenkhorn and Fleisher, 2005).

The main purpose of this paper is to examine the cross-cultural strategies for CI andto discuss the importance of customizing CI in international markets. This researchpaper has been divided into three parts. First, we explore the domain of CI and whycompanies need to tap into different markets. Second, we discuss the process and scopeof CI in the developed markets of Japan and European Union, and emerging markets ofChina, Russia, South Africa, and Middle East. On the basis of lessons learned in thesemarkets, we conclude by offering a pragmatic five-step approach that would assist CIpractitioners. This approach has been developed after in-depth interviews wereconducted with several CI consultants in these countries.

Domain of competitive intelligenceWhether a firm operates globally or not, the ability to collect and analyze early signalsindicating a competitor’s future actions is the key to maintaining a competitiveadvantage (Trim and Lee, 2008). CI plays a vital role and is invaluable for theformulation and implementation of business strategies in the modern world(Dishman and Calof, 2008). The causes of business failure internationally are rarelyfinancial, economic or technical. Failure arises from serious errors and misjudgmentconcerning the social, cultural, and political environment of the international countries(Werther, 1997). There may be differences in conducting CI internationally – forexample countries may differ in types, timeliness and motives for data collection. Alsodifferent countries may have different ethical standards, technologies and systems fordata collection (Tian and Tobar, 2004).

Diverse cultural factors affect the cross cultural and cross border CI projects, andthus research into the cultural dynamics affecting a society is a prerequisite for itssuccess. Cultural factors are so different between countries that a bolt-on CI system willfail to add value (Bensoussan and Densham, 2004). The challenges inherent incross-cultural transfer may actually diminish competitiveness, instead of enhancing it.Managers need to understand the cultural context of best practices, both at the sourceand at the target, in order to overcome these challenges and facilitate the transferprocess (Guimaraes et al., 1999).

Geographical and historical backgrounds affecting behavior are important factorswhen examining the environmental aspects of CI research and analysis. Values exist ineach society, but these might differ among cultures that may also influencemethodologies in which people plan, collect data, analyze, and communicateintelligence (Elizondo and Glitman, 2004). An appreciation for the political

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environment of the country is also important because not only does the basis of thelegal system vary between cultures, but interpretation of the law also differs (Elizondoand Glitman, 2004).

Therefore, it is imperative to develop a cross-cultural CI program in order to beatcompetition in today’s globalized economy. Effective cross-cultural CI requires localknowledge of the culture, language, information sources, and customs. Althoughsecondary sources of information on companies in the global arena can be accessedfrom a distance, in-depth, and face-to-face interviewing cannot be done remotely. Itrequires a local presence, with interviewers who are familiar with the businesscustoms, language, and hot-topics within the country (Elizondo and Glitman, 2003). Itis possible to do research remotely using international telephone calls, or by flying tothe foreign destination but the risk includes getting poor results, incompleteintelligence or worse, a wrong interpretation of the information collected.

While conducting this challenging process of CI, managers should keep in mindimportant attributes that could prevent them from committing common mistakes incross-cultural CI. As part of this research, we communicated with CI consultants in 12different countries. After debriefing them, we found some of the following commonmistakes:

. Poor knowledge of local business culture. Business managers should not assumethat knowledge and understanding of business practices can be transplantedfrom one country to the other. For example, a western company sought tocomplete a time sensitive research effort in Japan during the first week of May. Itfailed to recognize the impact of “Golden week” a collection of holidays in Japanthat leads to an almost complete shutdown of Japanese business. As a result, assuggested by Elizondo and Glitman (2003), access to the right business peoplebecame difficult and timelines had to be extended to accommodate the culturaldifferences and customs.

. Failing to thoroughly assess the elements of the project. As part of identifying thescope of the project, the manager should also take into consideration the culturalfactors that will impact the project timing, level of detail, and costs involved. In across-cultural CI project it is necessary to have access to the people withappropriate skills, language, and data.

. Poor ability to manage cultural diversity. The CI managers should be aware thatmost countries are very different in terms of business practices and data sources.There are differences in languages within the same country. For example,Spanish is the official language of Mexico, but there are variations in the Spanishdialects spoken there. Overlooking a key element like language can lead toundesired obstacles in implementing a project.

. Lack of patience and persistence. As with any international business project,cross-cultural CI also requires the project manager to be sensitive towards thelocal cultural practices, business ethics, people, and infrastructure. For example,in most Latin American countries, a physical face-to-face interview is required inorder to first establish an acquaintance, and eventually to establish trust. In sucha situation the CI manager needs to demonstrate patience in order to reappositive benefits in its business dealings.

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CI practices in international marketsCI gathering throughout the world is both an art and a science. A lot of research hasbeen conducted regarding CI practices in the market of USA (Behnke and Slayton,1998; Fuld, 2006; Prescott and Smith, 1989; Subramanian and IsHak, 1998; Wright andCalof, 2006). As mentioned before, several CI practitioners merely transport the sameCI approaches from USA to other countries, and expect the same level of results.However, due to cultural and other institutional factors, it is imprudent to expect thesame results. Thus, in this section, we describe in detail the differences in CI practicesbetween the markets of USA and other developed and emerging markets. Morespecifically, we examine the process and scope of CI in the developed markets such asEurope and Japan and emerging markets such as China, Russia, Middle East, SouthAfrica, and Latin America. This is followed by comparing the general differencesbetween the emerged and emerging markets.

Competitive intelligence in EuropeThe European Union has a population of more than 400 million, larger than that ofUSA and certainly cannot be ignored. With the formation of European Union, culturaldiversity has expanded even more. The following key areas have been identified thatshould be kept in mind when conducting CI gathering methods in different regions ofEurope (Coyle-Hickey, 1997; Hedin, 2004; Hirvensalo, 2004; Michaeli, 2004; Millan andComai, 2004; Pirttimaki, 2007; Smith and Kossou, 2008; Stanat and Seydel, 2002;Wright et al., 2002, 2004):

. Avoid face to face interviews. Face to face interviews should be avoided due to thehigh costs involved. Face to face interviews usually cost more than a multiple oftelephone interviews and response rates can be significantly lower. In mostcountries of Europe telephone and electronic mail interviews are now accepted asthe most cost-effective and successful methodology for data collection on CIprojects. The exception to this rule is competitor interviews. These are usuallymuch more productive as face to face interviews because of the more delicatesubject matter, length and open discussion nature of the interview.

. Avoid interviewing in a non-native language. It is common sense to talk torespondents in their native language and use a skilled native speaker to talk tothem. Even in countries like Germany, where most business respondents have agood command over English, a great deal of subtle information can be lost. Incountries like Italy, Spain, Portugal, and many Eastern/Central Europeancountries, the command of English is so low that one can seriously damage theintegrity of data by not interviewing in the native language. However, thepersonal preference of the respondent should be taken into consideration.

. Avoid running projects in vacation periods. For two to three weeks before andafter the main vacation period people are too busy preparing for their holidays ordealing with the backlog. Even if not going on vacation themselves people aretoo busy to be interviewed and thus vacation period should be avoided forinterviews in Europe.

. Avoid assuming that definitions across Europe are the same. It is wrong to makean assumption that different countries in Europe define things in the same wayor that the European country definitions are comparable with the USA There are

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many areas where definitional differences can be significant and causeconfusion. CI practitioners need to allow for these differences and remain flexiblein their understanding.

. Avoid using a single data source. Data collection from secondary sources usuallysuffer from two key problems. There is either no relevant information at all orthere is too much conflicting data. Relying on a single data source can thussometimes be dangerous. All secondary data should to be cross-checked anddifferences explained. This also covers the definition problem covered above.Cross-checking and reconciling different data sources especially when thereexists different definitions can be time-consuming and costly. It can confuseclients and introduce an apparent lack of confidence in the data. However,understanding the different data sources can lead to a much fuller appreciationand comprehension of the subject.

Competitive intelligence in JapanIt is not surprising that most large corporations in Japan are trying to win out overstringent competition in order to secure dominance of their company’s products in aglobalized market. In recent years Japanese products like the digital cameras, personalcomputers, and copy machines have indeed retained their superiority in the globalmarket. However, comparison with CI activities of companies of other nations revealthat most Japanese companies have a very different awareness structure and areundertaking different business activities (Sugasawa, 2004; Sugawara, 1998).

In Japan, the relationship between the government and business has traditionallybeen strong due to the country’s historical and cultural background. The majorgovernmental organizations have played a critical role supporting the nation’s CIactivities in the business arena. The government not only coordinates complex issuesamong companies, but also provides CI support through the Ministry of Finance,Trade, and Culture, the Japan External Trade Organization, and its embassies (Ikeyaand Ishikawa, 2001). According to Sugawara (1998), the main problems of CI toJapanese businesses are:

. obtaining information on a regular basis due to lack of publicly available data;

. reluctance of collecting, analyzing and evaluating information from externalsources – an important element of CI;

. lack of rigorous CI analysis techniques; and

. in the Japanese culture establishing trust is an important factor for conductingbusiness. This may be looked upon by other cultures as time-consuming andunnecessary.

Guimaraes et al. (1999) state that Japanese companies are effective in CI activities,which might seem to contradict Sugawara (1998). On closer reflection, on the basis ofour discussions with two local CI consultants, it is indeed evident that Japanesecompanies are good at collecting information from internal human networks.Unfortunately, they are not leveraging this information effectively due to their failureto use rigorous CI analytical techniques.

However, it is pertinent to note that Japanese businesses have a strong interest in CI(Sugasawa, 2004). Despite this keen interest, it cannot be said with any confidence that

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Japanese businesses are actively engaging in CI activities in order to dominate theirrivals. In particular, Japanese businesses lack the cornerstone of CI that is the processof analysis and evaluation, which in turn is required for the development of newproducts and technologies. In other words the lack of utilization of analytical toolsknown in the CI field makes it difficult to draw any conclusion that these businessesare creating strategies to win against competitors or that they have a well-developedcompetitive awareness.

Emerging marketsIn the past decade, the number and scope of opportunities in the maturing markets likeNorth America, Europe, and Japan are decreasing. At the same time, as competitivepressures are intensifying, it is challenging to experience continued growth in suchmarkets. Thus, growth and market diversification are key reasons why mostcompanies look into emerging markets.

Competitive intelligence in ChinaChina is the largest and most important emerging market economy in the world. China’seconomic growth has generated a strong domestic competition as well as rivalry tooverseas markets. It does not matter whether a Western-based company operates inChina or not, it still may be challenged by a China-based company. Today companiesworldwide are interested in knowing China-based companies’ business strategies, coststructures and other factors that may cause those companies to challenge them both athome and in overseas markets.

In terms of business environment China is significantly different from matureWestern markets. There was no need for CI in China before 1978. As a typical centrallyplanned economy, the production and distribution of goods were extensively plannedand firmly controlled by government agencies. There was no need for state ownedenterprises to compete against each other for market share or customers (Chao, 1998).The national information service system and economic information system,mainly provided information support for government policy making, planning,R&D, and technology transfer (Bao et al., 1998). The concept of CI was introduced inChina in mid 1980s and since then CI practices have received wide attention andsupport (Tao and Prescott, 2000). The main reason for this attention is “Qingbao.”

Qingbao (Chinese for information/intelligence) analysis has long been one of themajor practices of Chinese organizations. Qingbao analysis is employing moderninformation technologies and scientific methods to collect, select, analyze, andsynthesize relevant data, to fulfill the decision support demands of specific clients.

Second, China’s economic system and social environment have experienced ahistorical change since the end of 1970s. The decentralization of power, globalization ofeconomic activities, resolution of the government and business enterprises are creatingan extraordinary environment for the success of CI. The entry of MNCs in the Chinesemarkets, the thriving of township and village enterprises are all intensifying themarket competition. The need for actionable CI is thus being created and strengthened(Tao and Prescott, 2000).

Data collection in China has many challenges and tends to be a more personal affair.Data collectors often must meet face to face with sources and are expected to travel tothe company site for the meeting. When conducting CI in china, one must bear in mind

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that information infrastructure is far from established; publicly available sources areusually outdated, less accurate and not always reliable. Finding an experienced localpartner with an extensive personal information network is the key for success in suchan environment. Also, CI in China requires not only the information sourcing andcollecting skills, but also a special information analysis technique, which is based ongood understanding of that country’s special business culture and environment(Elizondo and Glitman, 2004).

Though CI is developing rapidly in China, there exists a lack of qualifiedpractitioners with practical experience and professionalism. The market of 1.2 billionpeople in China has attracted foreign investors from all over the world. It is notsurprising that these foreign firms have been complaining about the lack of marketinformation service support in China. The network between Chinese CI consultingfirms and foreign CI organizations seem to be the solution for this urgent need (Taoand Prescott, 2000).

Competitive intelligence in South AfricaRadical information in all aspects of South African society calls for a new attitudeamong South African businesses. Being isolated and protected for so long, SouthAfrican companies are now realizing that to survive, let alone prosper, in a changedcompetitive environment they will have to take a new view of that environment.

Practice of CI in South Africa is fairly recent. However, companies that formallypractice CI are growing in number, and CI is especially strong in the banking sector,information technology sector and also among the larger and former utilities like thetelecommunication and electric supply sectors (De Pelsmacker et al., 2005).

South African companies need knowledge of their competitive environment. Theyrequire training and skilled analysis capabilities and even more importantly theyrequire knowledge about new local and international competitors and their customers.There exists a need for development and identification of new markets and scanning ofthe local and international competitive environment.

South African companies in general are too inward looking, which make themvulnerable to unforeseen threats. In addition they have to compete with a very differentapproach towards the consumer, the environment, trade barriers, the work force, thestyle of doing business and the culture. According to Muller (1999), three key CI issuesthat companies need to consider in order to succeed and prosper in South Africainclude:

(1) Changed business rules call for South African companies that can compete andoperate at the edge of their knowledge and capabilities. Knowledge building isincreasingly recognized as a crucial capability. Companies are constantlycompelled to make better use of available information pertaining to the internaland external business environment in which they function, to enhance theircompetitiveness.

(2) Close cooperation between the state intelligence community and businesscommunity should be developed. In South Africa, the past legacy has had anegative influence on cooperation between the state and the business. For anumber of reasons large resources were used for political and militaryintelligence and to the disadvantage of economic and techno-intelligence. Thisled to suspicion between the state and the private sector. Only recently have

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there been encouraging signs that the formal intelligence community is lookingat ways to divert resources to support economic development.

(3) The increased marginalization of Africa in world politics and economics. SouthAfrican companies have to compete in a cut throat world without anyopportunity for preferential treatment. For CI this means a lot of work is to bedone.

Competitive intelligence in Latin AmericaThe changes in Latin American business cannot be adequately described. However, themost glaring sign of change is the enlarged presence of foreign companies. Directinvestment grew 600 percent in the 1990s (Price, 2000). Foreign companies now operatein every sector, including strategic industries like oil and gas, electricity, telecom,transportation, and banking. The overflow of foreign investment ignited growth in themanagement consulting and market-research industries. International companies wonmarket share not only through acquisition but also through research, strategy, andwell-planned execution. While early market entry may require market research,strategy, and connections, long-term survival requires CI. Today, Latin Americanexecutives understand CI and have less free time and require much faster turnaroundon intelligence. However, even the best CI firms face major obstacles (Price, 2000).

CI research can be very challenging in Latin America as compared to other markets.The first challenge is the lack of accurate published corporate data. A tiny percentageof Latin American firms are publicly traded, so reporting is minimal. Some LatinAmerican companies maintain different accounting books, one for the purpose of taxesthat reveals poor profitability, and the real numbers that often show healthyprofitability for circulation amongst private shareholders and prospective buyers.Until Latin American governments can effectively enforce tax collection, reporting willremain shady, making life difficult for the CI researcher.

Beyond corporate financials, even basic corporate profile data is hard to come by. InUSA and Europe, industry associations generate in-depth information on theirmembers including sales, number of offices and plants, number of employees, productlines, years of experience, and contact data of top executives. In Latin America theindustry associations are emerging with an eye on member-profile databases as a keysource of membership value. However, association directories still fall short of foreigncounterparts because companies are reluctant to reveal data that might attract theunwelcome tax collectors.

Business press, another starting point for “normal” CI practices, is quicklyimproving in Latin America but continues to focus on high-profile companies, usefulfor some research assignments but often insufficient for research on mid-sized firms.Jan Smith Ramos, Brazil Director of Info Americas, cites the Latino business culture asthe leading obstacle to CI research. Information is closely held amongst top-levelexecutives (Price, 2000). The American empowerment and knowledge-sharingpractices do not exist in Latin America, where revealing information at best dilutesyour power and at worst can get you fired. To use an extreme example, some CIresearchers called Latin American companies asking to confirm their address and faxnumber and been met with the following reply, please send your request in writing byfax with your corporate seal showing. The level of paranoia can be nerve-wracking(Price, 2000).

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As one of the world’s largest economic regions, Latin America is of increasinginterest to businesses everywhere. CI in Latin America is still in the developing phaseand is not very well recognized. In fact, CI is often regarded more as spying thanlegitimate research. Most Latin American countries have strongly written laws thatprohibit unethical business practices, including dishonest corporate practices.However, with little faith in its own legal system, most Latin American executivesprefer to keep a zero tolerance policy on revealing company information.

Competitive intelligence in RussiaMoving rapidly into its second decade of renewed capitalism, Russia continues to holdtrue to Winston Churchill’s 1939 description of “a riddle wrapped in a mystery insidean enigma.” Not surprisingly, business presents unique challenges to Westerncompanies looking to somehow engage this market of over 145 million constituentswhere GDP growth for 2000 reached a brisk 6.3 percent (Flint, 2002).

Russia, while disorderly at times, undeniably draws the attention of internationalfirms operating in sectors like telecommunications, pharmaceuticals, consumer goods,and business consulting. For those involved in energy, chemicals, or natural resources,familiarity with the Russian counterparts is unavoidable. Whether a firm/client iscurious about the opportunities or threats that abound in capitalism Russian-style, theprocess of intelligence collection stands as an overwhelming task.

While access to Russian business press has increased over the Internet, reliableopen source data can be hard to come by when focusing on a specific company orfacility. Bias and wrong information thrive since much of journalism in Russia isaffected by the political and economic structure of the oligarch or party. Culturally,Russia has not yet adopted the idea that corporate information is made for widespreaddissemination. Given that the Russian government continues to maintain substantialholdings in a large number of public companies, the line between business andgovernment interests can quickly blur.

With the absence of effective securities exchange regulation and enforcement, manypotential Russian investors simply do not heed corporate press releases fearing thatunrestricted insider trading unfairly manipulates share value. In addition, highRussian corporate taxes have compelled many businesses to keep “two sets of books” –posing questions about company transparency that are not answered by publicdocuments.

The USA often has been described as a “target-rich environment,”, i.e. an opensociety willing to assist total strangers in need. Russians for the most part, however,are not so inclined. Instead, they draw a solid line between their “acquaintances” and“friends.” Moving from the “acquaintance” to “friend” category with Russians can takesubstantial trust-building efforts. Conversely, Americans frequently use the term“friend” for most anyone they may have met the previous week. The result is thatRussians normally maintain a harsh exterior in public and avoid sharing much withanyone except a very limited circle of people.

The ethics of CI in Russia is an altogether different issue and one which Russiansrarely complicate with ethical considerations. Threats by organized crime gangs andrival companies whose connections may be further up in the government hierarchy isat the forefront of most company presidents’ minds. Despite all the difficulties, Westerncompanies do operate favorably within the Russian Federation. Clearly, in one form or

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another, the over 650 member firms of the American Chamber of Commerce in Russiaare meeting the challenge of collecting sufficient critical intelligence to help in thedecision-making process. In many ways, the Ruble devaluation of 1998 appears to haveforcefully re-emphasized the rewards of being tuned into one’s business environmentand competitors. According to Flint (2002), the following are few important factors thatshould be kept in mind for successful CI in Russia:

. The importance of presence. Whether you are conducting a background check ona potential supplier, planning out a joint venture partner, or evaluating acompetitor, it should be kept in mind that this is not something best done overthe telephone or Internet even if you have established contacts. Like manycountries, Russia and its business leaders put a premium on face-to-facemeetings. In a business context, these normally come first within a formalsetting, followed by recreational activity. Since Russians assume most forms ofcommunication are insecure, when touching upon sensitive subjects it is notuncommon for them to opt out saying, “This is not a topic for telephoneconversation.” Such a comment is usually an indirect invitation to meetsomewhere outdoors in person. In country presence often reveals the true pulseof the situation with little need for language.

. Picking your team. Forming a CI team that combines a trusted Russian and aforeigner with language knowledge seems to consistently yield the best results.This is something observed not only within successful Western companies inRussia, but also within foreign embassies and consulates. While incorporating aRussian into the research can backfire, the key is finding some self-interestmethod to encourage ongoing loyalty. It is also important to do a backgroundcheck on any Russian assisting you so as to make certain they are not easilyvulnerable to outright coercion by any company or government entity that maydevelop curiosity in the focus of your research. It is essential to remember thatethics can be fleeting in Russia and coercion can take many forms.

. Vocal respect. Showing vocal respect for the Russian arts or illustratingknowledge of the language tends to overcome stereotypes quickly and lowersbarriers. In addition, showing a wry sense of humor through the appropriate useof a Russian proverb can be helpful at putting a conversant more at ease.

. Keep patience. Business intelligence effort in Russia cannot be a one- or two-weekengagement. Often it requires several trips especially if you are based out of thecountry because, even after locating sources, it is likely that they will not be ableto address the whole picture due to most Russian organizations’compartmentalized, “need to know” information stance. There are severalinformation “gushers” in Russia and just like elsewhere, assessing their agendaand examining the possibility of misinformation is important.

. Keeping within ethical guidelines. The steadiest and least threatening path is togather smaller puzzle pieces and, if possible, use business networking to youradvantage.

Competitive intelligence in the Middle EastThe 19 nations of the Middle East market offer enormous attractions and representa market of nearly 300 million, a figure which will double in the next 25 years

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(Feiler, 1999). The Middle East is also home to roughly 65 percent of the world’s provenoil resources and 30 percent of its proven natural gas reserves. In addition to businessinformation seekers, the Middle East is of prime interest to intelligence services fromaround the globe.

Today an abundant supply of local primary sources regarding the Middle East isavailable; however obtaining these sources is difficult. The reliability of availablesources and statistics on the Middle East plagues decision makers and analysts alike.What is the disposable income of the average Middle East consumer? Is the MiddleEast really growing as fast as they say? These are frequently asked questions that aredifficult to answer with a degree of confidence. Despite some technologicaldevelopments many problems continue to impede access to information in theMiddle East. The two key barriers are:

(1) Language. Without a doubt, one of the major obstacles encountered by theforeign CI seeker is language. The best sources available in the Middle East arestill published in local languages. These include journals, official trade statisticsand specific government reports. Owning to the local nature of these sources,most are only available within the region.

(2) Indexing. There are currently no effective indexing tools that cover the MiddleEastern sources and newspapers. Thus, a search for all relevant materials in theMiddle East could take several hours to complete, and result in little if any,useful information.

In the Middle Eastern countries there are changing legal and financial structures whichmay be very different from the ones the foreign company will be used to. Eachsituation will have to be analyzed and evaluated individually. Continuous monitoringis necessary to understand the ongoing changes to the business structures and theirimplications for the target markets or companies. In-depth understanding of the legalstructures and related options are especially important in establishing a direct presencein this emerging market.

Differences in the CI process between the developed and emerging marketsAs can be seen from above, there exist many differences between the scope andprocesses of CI in developed and emerging markets. This was also corroborated duringour interviews with 12 CI consultants in both emerging as well as developed markets,and thus allows us to draw five pertinent lessons. First, it can be seen that the CImarket in the developed countries is much more matured than in the emergingcountries. Second, the government also plays a critical and supportive role in thedevelopment of CI in these developed markets as compared to the emerging marketswhere the government’s involvement with the businesses slows down the CI process.Third, infrastructure in emerging markets is still in its developing stages whereasinfrastructure and technology in the developed markets is well established. This alsomeans that publicly available information is easy to gather in markets such as USA,Europe, and Japan. On the other hand, in emerging markets, obtaining information on aregular basis tends to be a difficult task due to the lack of publicly available data.Fourth, the size of the CI unit and the time spent on CI related activities also tend todiffer between developed and emerging markets. Finally, the techniques used for CIprocess is relatively advanced in the developed markets as compared to that in the

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emerging markets. All the above differences and those discussed through out thisresearch paper are vital differences. However, it is also important to keep in mind thatthe countries that fall under the category of emerging markets or those under thecategory of developed markets have their own set of internal differences. Hence, beforeconducting CI in such markets, the unique cultural contexts underlying informationsharing behaviors must be closely investigated. However, there is no specificframework or structure in extant literature that assists CI practitioners to successfullycollect and analyze information. We now therefore attempt to create a process thatwould overcome this lacuna in the literature, and assist future global CI practitioners.

Five-step process to conducting cross cultural CIAs mentioned before, we surveyed extant literature on the process of conducting CI inboth developed as well as emerging markets. Further, we corroborated our research byconducting in-depth interviews with 12 CI consultants in both kinds of markets. On thebasis of our interviews and discussions, we developed a five-step process fordeveloping a cross-cultural CI program. This would be immensely beneficial to thoseCI practitioners who need to be involved in several markets at the same time.

The five-step process for establishing a cross-cultural CI program is as follows:

(1) Define requirements. Be aware of the cultural, social, and economic differencesbetween the home country and the host country.

(2) Assign a cultural leader. Select an individual who knows about differentcultures and is fluent in the country’s local language.

(3) Organize cross-cultural CI structures. Identify a staff with the consideration oftheir cultural backgrounds. Also develop a common language and an ethicalframework for the cross-cultural CI project.

(4) Collect information and analyze it. Learn as many things about the industry inthe foreign country, keeping in mind the cultural context in which suchinformation was collected. The analysis of such information must also beconducted by taking into consideration the cultural constraints of sharingintelligence.

(5) Disseminate intelligence. The end game of CI is not collection and analysis ofinformation, but real-time dissemination of intelligence to the decision maker. Ina cross-cultural CI project, the analyst must clearly educate the decision makerregarding cultural challenges in converting such information into intelligence.

In many ways, this five-step process could be considered as a “best practices”framework. From the inputs we received from various CI consultants, as well asinvestigating various mistakes that various companies committed, it was evident thatseveral shortcomings in the practice of cross-cultural CI could directly be attributed tothe omission of either one or more of these steps. Thus, if a firm wishes to conduct CI invarious countries, it would behoove them to incorporate this five-step process as acritical element into their expansion strategies.

Limitations and conclusionIn this study, we investigated extant literature regarding cross-cultural CI practices invarious developed as well as emerging markets. We also complemented this literature

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review with in-depth interviews with 12 CI consultants in these countries. Hence, one ofthe limitations of this research is that it is mostly descriptive in nature. In future, wewould suggest that a comprehensive cross-cultural empirical survey be conductedalong the lines of Wright and Calof (2006) across various emerging as well asdeveloped markets. This would provide additional perspective to what we haveprovided through our qualitative as well as review-based research.

Second, due to rapid environment changes across the globe, CI practices have alsochanged in the past several years. Hence, it is possible that some literature could beoutdated. In order to overcome this limitation, we conducted the aforementionedin-depth interviews with CI consultants.

Finally, we provide a five-step process that would assist firms in conductingcross-cultural CI. The next step in this research would be to empirically corroboratethis process by developing a comprehensive framework in which we could investigatethe relationship between cross cultural practices and firm’s success in those markets.

Cross-cultural CI is a very complex endeavor for a company to undertake. Oftencompanies fail in their entry into foreign markets due to misjudgment and poorunderstanding of the countries’ cultural, social, and political environment. As we haveseen throughout this paper the cultural factors have a major influence on the analysisand outcome of any CI project. Hence, to beat the competition in today’s highlyglobalized economies, firms doing international business must have a cross-culturallyaware CI program. Firms could incorporate the five-step process in their strategicplanning and expansion strategies, and thereby avoid committing any mistakes.

Globalization has brought the world closer, and doing business in other countries inorder to grow and increase profits, has become inevitable. Hence, it is absolutelynecessary for all organizations who wish to venture into foreign markets to be not onlyfamiliar with the business ethics and practices but also have an in-depth knowledgeabout the countries’ culture and factors so that they can leverage their CI practices inestablishing a successful presence in these markets.

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About the authorsPhani Tej Adidam is the Executive Education Professor and Chairman of the Department ofMarketing and Management at the University of Nebraska at Omaha. His research interestsinclude marketing strategy, competitive intelligence, customer relationship management (CRM),decision confidence, and sales management. His work is published in the Journal of Marketing,Journal of Marketing Management, Journal of Marketing Theory and Practice, Journal ofBusiness and Policy Research, among others. He teaches Marketing Strategy, InternationalMarketing, Sales Management, Strategic Brand Management, and Channels of Distribution toundergraduate, MBA and Executive MBA students. Phani Tej Adidam is the correspondingauthor and can be contacted at: padidam@mail.unomaha.edu

Sampada Gajre is a MBA graduate of the University of Nebraska at Omaha, and is currentlythe CEO of Career Search Dynamics in Omaha, Nebraska, USA.

Shubhra Kejriwal is a MBA graduate of the University of Nebraska at Omaha, and iscurrently an Accounts Executive at DTN Inc. in Omaha, Nebraska, USA.

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