Competitive Business Intelligence in China.

Sunday, January 20, 2008 20:17

Last week while sitting around my mom’s table in Portland, I picked up an article in the local paper (The Oregonian) and had a bit of a laugh when reading the article
More firms hire snoops to get edge on rivals

Speaking about this growing industry in the U.S., the article looked at just what competitive intelligence professionals were doing to learn about new product launches, staff sizes, and other nuggets of data…. and what made this story interesting to me, after doing a lot of competitive intelligence in the U.S. and China, was (1) that the author made it seem very cloak and dagger and (2) the consultant interviewed showed just how fun the job could be

Competitive intelligence analysts like Neubauer collect inside information by simply talking to people who work for or are associated with companies that his clients want to learn more about. At the top of the list, firms want to know what products or services are in their rivals’ pipelines, so that they can plan counter moves.

The article makes out CI to be 100% about collecting insider info, and developing strategies to do so:

Competitive intelligence analysts like Neubauer collect inside information by simply talking to people who work for or are associated with companies that his clients want to learn more about. At the top of the list, firms want to know what products or services are in their rivals’ pipelines, so that they can plan countermoves.

What I have always found interesting about doing “competitive intelligence” is that I would say only 25% requires a different tool set than your average market researcher or consultant. Assuming that market researcher or consultant are (1) knowledgeable of the industry and (2) are in regular contact with others in the industry. In fact, if a researcher is both, then it is really a matter of reframing and redirecting their attention and data to form many of the opinions on an industry, or specific player.

For many, it is the other 25% that they think is the interesting, adventurous part. It is 20% mental and 5% just physically being willing to sit across from a factory, make the phone call, or waltz into the back of a warehouse.

My first real introduction to BI was through a class at Thunderbird where we were on a live project and were tasked over the entire semester. It was a supply chain project, and it was quite standard, as the industry that we were working with was mature.. and had been for 20 years (think FMCG). In the end, while we supplied 130 pages of information on the industry and their targeted supply chain model, the fact was that the project we were working on was simply a matter of benchmarking the industry, backing out a few things, and adding in a few D&B’s.. and that was considered BI. there was no cloak and dagger, there was no sense of adventure, and it was really a matter of sitting down, working out the information that is needed, building a program around that, and then hitting the phones.

For many firms, what I find is that most data that they are searching for is competitive in many regards as many firms entering China, or a market of China, are still feeling their way. They don’t know the market, they are looking for guideposts, and the best place to start is to understand a market is to understand what the competitive landscape is

In China though, because so little is consistent in any industry and because everything here moves so fast, BI is very different here. It relies less on traditional tools (internet, news surfing, speaking to sales people, etc) and takes on a much more guerilla approach. In many ways, it requires a deeper knowledge of the industry while at the same time having a real sense of where the hidden data lies, and being willing to go out and get that information.

My first case in China, perhaps one of the most interesting, I found myself getting tossed out of a local retailer. We had gone in and were working through our program guide and decided it may be fun to go into the back warehouse… well.. some people didn’t take to that to well, and we were “asked” to leave. funny enough, getting kicked out was the best thing that could have happened as we were taking through the back door (past the managers office, past the back office, past the time clock…) .. a treasure trove!

for the consultant in the article, one of his favorite cases of getting information was calling on a salesperson.. but getting his wife:

One mission was to learn how many salespeople were employed by a target company, their sales strategies and how much they earned. Calling one salesman’s home number, Neubauer got the wife instead. She was unhappy with her husband’s employer, knew quite a bit about the company and was eager to talk.

In both cases (his and mine), the key was finding the right person. Both of us got a little lucky, but like the consultant quoted in the article, I definitely have a few favorite targets.

In China, where foreign executives are on heightened alert against Chinese firms looking to steal information, it is always amazing to see the exact same executive pour out their firm’s problems over a pint at the local pub… and that through a number of relatively simple steps, one can get nearly any bit of data needed. It isn’t always used for bad, but one thing is for sure, it is not always used for good.

In the article, the author quotes another person about the usefulness of trade shows for gathering intel on the pharmaceutical industry:

Most of the competitive intelligence gathering occurs at trade shows and scientific meetings through such benign techniques as just hanging out at a rival firm’s trade show exhibit booth, listening to conversations and jotting down useful tidbits, said Dr. Douglas Melnick, a California physician.

In China, I would argue that trade shows are one of the quickest ways in china to gather intel as they offer a sign le venue whereby one (or their team) can interview a lot of people, pick up brochures, and of course network in the cafeterias…

Overall, competitive intelligence is an important piece of any market analysis in my mind when looking to learn about the market, and for market leaders in China the most important thing to know about competitive intelligence is how to construct a strong defense. Protecting documents that are available on the internet, training up gatekeepers on phone lines, improving employee satisfaction. Each will go a long way to protect what has taken so long to build. Because as the article says.

“It’s like pilots using a simulator to fly over an enemy battlefield to look where the anti-aircraft guns are,” McHenry said. “Even if the guns are in different places when they do the actual flight, the simulator gives them helpful experience.”

Wyeth sometimes notices competitors watching them, he said. “It’s almost entertaining to watch how this goes back and forth, like a chess game with defined rules,” he said. “We try to think three or four moves ahead.”

You can leave a response, or trackback from your own site.