The Need for Competitive Intelligence in this Recession

The Need for Competitive Intelligence in this Recession
Ruth Stanat, President and CEO, SIS International Research
January 26, 2009

Perspective
Global competitors never stop their competitive monitoring around the globe. In this current global recession, companies may be tempted to believe that their competitors have “shut down” their research and competitive intelligence budgets. While corporate budgets are being cut, there are ways that companies can continue their competitive monitoring during this year and the next few years of recession until economic recovery.

The Need for Continuous Competitive Intelligence Monitoring

While the world economy may further contract, it is important to note that some multinational firms will continue to grow and thrive at the expense of others, who will stay even or fail during these hard economic times.

Not all industries and companies are created equal – Nor do they compete on a level playing ground – particularly during a recession. During good economic times, companies can compete on a “level playing ground” as they have access to capital, the equity markets and they are well-staffed. However, during this period of a credit crisis, limited liquidity, downsizing and foreseeable economic uncertainty, the consequences of stopping a CI global monitoring process could have the potential result of reduced market share and limited market opportunities over the long term.

Affordable CI Monitoring Programs during the Recession

The following are affordable CI monitoring programs that companies can reasonably consider during this year and the next few recessionary years.

1. Low cost CI monitoring programs – monthly retainer programs

Companies can commission through a research supplier cost-effective, monthly tracking programs which utilize a research methodology of both secondary research augmented with primary research from targeted Key Opinion Leaders in the countries.

2. Targeted Competitor Profiles in Select Regions or Countries

Companies can commission targeted competitor profiles in select regions or countries to monitor competitors' new product development activity, expansion plans, their merger and acquisition activity and their strategic initiatives.

3. Market Opportunity Analysis by Product Sector and by Geographical Region

Many strong companies see the value in continuing to develop their short term and longterm strategy in spite of the economic downturn.

Some cost-effective research methods:

• Instead of commissioning several countries or regions, do homework first and target specific regions or countries for the “low hanging fruit”
• Target the exportation of your most robust products and services, pare down the global expansion of “all products and services”
• Monitor the price points and the changing exchange rates by country to optimize export and global sales opportunities

What Not to Do During this Recession

1. Caution against shelving select regions because they have a short term burst in their bubble

An example of this is market expansion plans in the Middle East and North Africa Region. During the “black gold” rush of the past few years to the United Arab Emirates and other Middle Eastern countries, companies were expanding at a high growth rate to “get in the game.” Now since the price of oil is down from their historical levels, several firms have stopped their Middle East expansion efforts.

But this region will likely continue to grow in terms of its demographics over the longterm. With high population growth, young populations and large family sizes, this region will likely grow in the future in terms of household consumer products, transportation, retail, financial services and healthcare services.

2. Remember to do homework – as your competitors’ will continue to do their homework

This is an important message. Don’t neglect your homework or research as your global competition may still continue to research foreign market opportunities and will seize market opportunities. While your domestic competitors may pull the plug on their market research or global market intelligence budgets, the domestic competitors in these countries or adjacent countries in the region may likely be continuing their robust competitive efforts.

3. Collect very affordable market intelligence from your field offices domestically and on a global basis

A cost-effective and high value way to gather local domestic and global market and competitive intelligence is to “tap” your local field and sales offices. They offer on-the-ground intelligence and insight and can be tremendously useful in strategic decisions.

Summary

In summary, global multinational firms that continue their CI and MI monitoring efforts during this economic downturn are prone to reap the efforts when the economy begins to point north again.


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COPYRIGHT (C) 2009. ALL RIGHTS RESERVED.

This article is not intended to be advice for business decisions. SIS International will not be held liable for any decisions made on the content herein. See privacy policy for more information.

Comments

[Brian]

Coming from Microsoft, I can say that the demand for CI has not really decreased; the QUALITY of the the CI data, however, is probably under higher scrutiny. Also, the focus is on not just research for its own sake, but how to "monetize" this information as part of current (or future) product/service offerings. If there is a way to convert CI or MI data into instant competitive advantage or a stronger value proposition for the firm, there is a compelling reason to have a global CI monitoring system.

Just a thought.

[Bill S.]

A great way to get the salesforce involved is setting up an internal Wiki, but "seed" top competitors with some insights first to jumpstart the interactive component of the platform. Issue is that someone has to monitor this to ensure that no proprietary insights are loaded to the site - you don't want an employment law issue on your hands!

Gets interesting when management starts using it for recruiting purposes, sales force is using it in competitive situations with clients and prospects, and strat/corporate development is using it to develop big thoughts.