COMPETITIVE INTELLIGENCE IN LARGE COMPANIES GLOBAL STUDY

Transcription

1 COMPETITIVE INTELLIGENCE IN LARGE COMPANIES GLOBAL STUDY GIA WHITE PAPER 4/2005

2 Executive Summary This interview study was cnducted in eight cuntries and in the regin in the spring f 2005 by seven Glbal Intelligence Alliance (GIA) members. The survey respndents were respnsible fr Cmpetitive Intelligence (CI) in their respective cmpanies - ne f the tp 50 r tp 100 firms in the cuntry under study. One f the mst significant results f this glbal study was that, amngst large scale cmpanies, almst nine in ten use CI and, n average, had practiced the discipline fr three t five years. Nearly eight cmpanies in ten had a CI budget and apprximately tw thirds were planning t increase their investments in the activity. These results ffer a slid indicatin that CI, albeit still a nascent practice relative t mre traditinal functins (accunting, marketing, peratins, etc) in glbal, large scale cmpanies, it was well n the way t becming an established functinal discipline. CI seemed t be fulfilling primarily strategic rles, with tp management being the mst imprtant user f intelligence utput and analysis. Frm a functinal perspective, strategic planning and business develpment ranks similarly. Cntinuus mnitring was seen as the mst imprtant CI element, with cmpanies mainly fcused n gathering infrmatin n cmpetitrs, custmers, and their wn industries. These three infrmatin needs can be cnsidered as frming the strategic purpse f CI activity. The activities f CI mst in need f further develpment include utilizing infrmatin pssessed by persnnel, identifying critical infrmatin needs, and gathering and managing infrmatin effectively. Practicing CI had mst ften benefited cmpanies in the frm f increased quality f infrmatin, increased general awareness, and imprved threat and pprtunity identificatin. The research results are imprtant in prviding cmpanies with pints f cmparisn regarding their wn CI perfrmance. Other stakehlders in the CI cmmunity can benefit frm the results in the frm f increased understanding f the use f CI in a glbal cntext. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 2

3 Table f Cntents EXECUTIVE SUMMARY... 2 TABLE OF CONTENTS INTRODUCTION DESIGN AND IMPLEMENTATION OF THE RESEARCH KEY FINDINGS Definitin f the Activity Systematic Infrmatin Cllectin And Analysis Terminlgy Used Age f CI Activity Mst Imprtant Infrmatin Needs Utilizatin f CI Elements Lcatin f Infrmatin Prcessing Utilizatin f Internal Cmpetitive Intelligence And Tacit Market Knwledge Existence f CI-Dedicated IT Tls Benefits Achieved Thrugh the Use f CI Organizatin f the Activity Persnnel Grups Utilizing CI Prducts Functins that Utilize CI Prducts CI-Budget Persn Respnsible Emplyees Allcated t CI Future Outlk f CI Develpment f CI Investments Critical CI Develpment Issues CONCLUSIONS. 30 APPENDIX 1: The Questinnaire GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 3

4 1. INTRODUCTION In the spring f 2005, seven Glbal Intelligence Alliance (GIA) members decided t engage in cllabrative research in the field f Cmpetitive Intelligence (CI*). The bjective f this prject was t prduce mutually cmparable infrmatin regarding CI in each f the respective dmestic markets. This gal was peratinalized via the use f a cmmn research framewrk t deliver bth cuntry-specific reprts and a cmparative multi-cuntry reprt. Additinally, this research cllabratin wuld shwcase the capability f the GIA netwrk t engage in multi-cuntry research. Interview study was selected as the research methd. All seven f the participating GIA partners were invlved in the creatin f the questinnaire (see Appendix 1), which was used fr the interviews in all f the markets under study. The questinnaire cnsisted f three sectins: 1) Definitin f the CI Activity, 2) Organizatin f the CI Activity and 3) Future Outlk f the CI Activity. The target was t interview the highest ranking CI persnnel in apprximately 30 f the 100 largest cmpanies perating in each market under study. In rder t ensure an ptimal respnse rate, the respndents were guaranteed ttal annymity alng with an ffer t receive the final reprt. The primary research questin was, What is the current nature and state f cmpetitive intelligence (CI) activities in majr crpratins perating in the market in questin? It was further delineated int tw sub-questins: 1) Hw are the activities rganized? and 2) Hw will the scpe f current CI activities change in the future and what are the develpmental targets fr the CI prgram? These research questins were answered thrugh quantitative and qualitative analysis f the interview results. The research prved t be very successful given the participatin f a ttal f 287 cmpanies in eighteen cuntries - Australia,,, China,,, Hng Kng, India, Japan, Krea, Malaysia, Mexic, the, Nrway, Singapre, Taiwan, Thailand, and. The scale and scpe f the respnse makes this research ne f the largest and mst cmprehensive studies cnducted in the field f CI t date. *CI is defined by the Sciety f Cmpetitive Intelligence Prfessinals (SCIP) as the prcess f enhancing marketplace cmpetitiveness thrugh a greater -- yet unequivcally ethical -- understanding f a firm s cmpetitrs and the cmpetitive envirnment. CI as a term is used thrughut this study althugh it is cnsidered t mean an activity wider in scpe than in the definitin by SCIP. Even thugh there might have been a better term t be used instead, CI was chsen because f its wide acceptance in the business cmmunity and als because the terminlgy is used by a number f GIA members in describing their businesses. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 4

5 2. DESIGN AND IMPLEMENTATION OF THE RESEARCH The questinnaire used was designed as a cllabrative effrt by the participating GIA members and Tampere University f Technlgy. Mst f the questins used were multiple chice and structured questins. There were als sme pen questins included and, in sme f the multiple chice questins, the interviewees were allwed t elabrate. In a number f the survey questins, a mdified Likert scale was used, by which the respndents were asked t place issues in the rder f imprtance. In these cases, the results were weighted accrding t fllwing principles: Mst imprtant issue: 10 imprtance pints 2 nd mst imprtant issue: 6 imprtance pints 3 rd mst imprtant issue: 4 imprtance pints In the markets under study, the gal was t interview ne individual frm each f the tp 50 r tp 100 cmpanies as measured by sales. This study targeted the individuals respnsible fr CI activity in his r her cmpany as candidates fr the survey. In rder t increase the respnse rate, every respndent was prmised ttal annymity in additin t an ffer t receive the final reprt. The respndents received a cver letter via e- mail utlining the study in advance and advance ntice f imminent phne cntact - althugh in sme markets the study facilitated respnses via r fax. The actual telephne interviews were cnducted in the spring f Each f the interviews tk apprximately minutes. Micrsft Excel sftware was used in the analysis f the respnses as well as in building mst f the charts. The research was static in the sense that it examined the situatin at a certain time. The number f the respnding cmpanies in each market under study are shwn in Table 1. Table 1. Number f Respnding Cmpanies in Each Market Under Study. MARKET Mexic The Nrway TOTAL NUMBER OF RESPONDING COMPANIES As can be seen in the Markets clumn f Table 1, was the nly market n the list that was cmprised f a multinatinal regin while the ther markets are cmprised f individual natins. The reasn fr this was that is still a develping market it was feared that fcusing n nly ne f its cnstituent cuntries might misrepresent r skew the cnclusins drawn n this the market as a whle. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 5

6 3. KEY FINDINGS 3.1 DEFINITION OF THE ACTIVITY SYSTEMATIC INFORMATION COLLECTION AND ANALYSIS On average, 87 percent f the interviewed cmpanies systematically cllected and analyzed infrmatin abut their external perating envirnments (see Exhibit 1). Belw the glbal average were Nrway, the, and, with 73, 76, and 79 percent reprted respectively. The tp three markets in which cmpanies systematically cnducted CI were,, and Mexic, with 96, 95, and 94 percent, respectively. Hwever, in the case f the cmpanies that might have respnded negatively t this questin might be reasnably expected t be reluctant t respnd. Therefre, the results frm this survey questin might nt realistically present the CI utilizatin rati acrss the bard in the case f large cmpanies in. Exhibit 1. Cmpanies with Systematic CI Activities - Natinal Percentages 90.9 % Nrway 73.3 % 76.0 % Mexic 88.9 % 96.0 % 95.1 % 78.6 % 90.9 % 89.4 % 0.0 % 10.0 % 20.0 % 30.0 % 40.0 % 50.0 % 60.0 % 70.0 % 80.0 % 90.0 % % Nte: Overall average shwn by range line GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 6

7 3.1.2 TERMINOLOGY USED Glbally, almst ne-third f the large cmpanies surveyed labeled crprate CI as market research (see Exhibit 2). This might indicate that the activity was primarily tactically fcused, and might include fr example mnitring cmpetitrs prices. The term business intelligence was used by 20 percent f respndents and the term CI by anther 16 percent f the respnding cmpanies. Apprximately ne-third f the respnding cmpanies used ther terminlgy t describe their CI. Exhibit 2. Glbal CI Terminlgy 7.6 % 5.1 % 2.8 % 29.8 % 13.6 % 16.2 % 20.1 % 29.6 % Smething Else Market Research Business Intelligence Cmpetitive Intelligence Market Intelligence Market Mnitring Cmpetitr Intelligence Knwledge Management Nte: The percentages shwn are averages f the percentages received by each term in each market. Therefre, all f the markets cntributed equally in spite f the number f respndents in each f the cuntries. The percentages add up t mre than 100, because the respnding cmpanies were allwed t chse multiple names fr the activity. There exist ntable differences in terminlgy used between different markets. While market research seemed t be the term f chice t describe CI fr mst f the cmpanies perating in the regin, it was nly used by 8 percent f the respnding cmpanies in. Als, while half f the respnding cmpanies in referred t their intelligence activities as CI, in and the term was used by nly 8 and 12 percent f the respnding cmpanies, respectively. was the nly market where market intelligence was the mst ften used term (30%), while BI was relatively cmmn nly in (67%) and the (58%). In, fr example, the categry smething else received the mst respnses, but since it cnsists f multiple terms, it was nt directly cmparable t ther terms. It can be cncluded that there was n universal terminlgy fr CI and it seemed t vary accrding t market. CI had been the term selected fr the purpses f this research and is used frm this pint frward in this reprt since it was the understanding f the researchers that it best describes the activity that was under study. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 7

8 3.1.3 AGE OF CI ACTIVITY The number f years fr which CI had been systematically cnducted in each market is shwn in Exhibit 3. On average, the respnding cmpanies had systematically rganized CI fr 7.8 years. Therefre, CI had n average been established within large, glbally perating cmpanies in Exhibit 3. Average Age f CI Activity in Each Market Nrway Mexic Years Nte: Overall average shwn by range line was the nly cuntry in which the average age f systematic CI rganizatin exceeded ten years. Naturally, in every market there were als cmpanies that had practiced the activity fr mre than 10 years, even thugh the average was lwer. In, and the nne f the respnding cmpanies had practiced CI fr less than ne year. In nne f the markets under study had CI activity, n average, been systematically rganized fr less than 6 years. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 8

9 3.1.4 MOST IMPORTANT INFORMATION NEEDS As can be seen frm Exhibit 4, the three mst imprtant infrmatin needs were infrmatin abut cmpetitrs, wn industry and custmers. The tpic f cmpetitr infrmatin garnered 28 percent f the verall imprtance pints and was seen as the mst imprtant infrmatin need glbally. The tpics f wn industry and custmer were ffered by respndents as wrth 25 and 24 percent f the verall imprtance attribute respectively. Exhibit 4. Glbal Infrmatin Needs - Distributin f Pririties 3.2 % 3.1 % 2.9 % 2.6 % 1.4 % 28.1 % 9.4 % 24.2 % 25.1 % Cmpetitrs Own industry Custmers Macrenvirnmental trends Smething else Cuntries Technlgies Custmer industries Similar industries Nte: The results have been weighted accrding t the principles described in Sectin 2. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 9

10 Exhibit 5 shws that the respnding cmpanies were unanimus regarding their three mst imprtant infrmatin needs. Hwever, there was sme cuntry-specific variatin in the ranking f the tp three infrmatin needs. While the cmpanies in,, Nrway, and cnsidered infrmatin abut cmpetitrs the mst imprtant f their infrmatin needs, in Mexic and the mst imprtant was custmer infrmatin. Infrmatin abut wn industry was seen as the mst imprtant in and the, while in, it shared the highest ranking with cmpetitr infrmatin. Exhibit 5. Tp-3 Infrmatin Needs by Market % 90.0 % 80.0 % 70.0 % 60.0 % 50.0 % 40.0 % 30.0 % 20.0 % 10.0 % 0.0 % Mexic Nrway Custmers Own industry Cmpetitrs Nte: The results have been weighted accrding t the principles described in Sectin 2. It seems fair t cnclude that infrmatin abut cmpetitrs, custmers, and a cmpany s wn industry frmed the cre f infrmatin needs addressed by CI cnducted by crpratins arund the glbe. One culd als argue that, in general, these are the three types f infrmatin with the strngest impact n business success. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 10

11 3.1.5 UTILIZATION OF CI ELEMENTS,, and Nrway were the nly markets in which all f the respnding cmpanies utilized all elements f CI as shwn in Exhibit 6. In, nly tw-thirds f the respnding cmpanies utilized ad hc research, whereas in, ad hc research was used the least f all the natins surveyed - hwever, still being utilized in 74 percent f the respnding cmpanies. and the, n the ther hand, were the nly markets in which ad hc research was utilized mre than the ther CI elements. In general, regular reviews were used in 95 percent and cntinuus mnitring in 94 percent f the respnding cmpanies. Overall, ad hc research was used in 91 percent f the surveyed cmpanies. Exhibit Utilizatin 6. Utilizatin f Each f Each CI Element CI Element in Each in f Each the f Markets the Markets % % % % % % % % % % % % % 25.0 % 0.0 % Mexic Mexic Nrway Nrway Cntinuus Series1 mnitring Series2 Regular Series3 reviews Series4 Ad Series5 hc reprts Respndents were asked t place intelligence elements that they utilized in rder f imprtance. The glbal averages fr each CI element per imprtance rating, i.e. mst imprtant, 2nd mst imprtant, r 3rd mst imprtant, were calculated. These percentages were then assigned weights accrding t the principles described in Sectin 2. This was needed t remve the distrting effect f the respnse dynamic that a different number f cmpanies respnded t each imprtance categry. Therefre, had the weights been given t the abslute number f respnses t each imprtance categry, the verall imprtance wuld have been biased in the directin f the imprtance categry with the mst respnses. The methdlgy used in this analysis effectively remved this bias. The verall imprtance f each CI element is shwn in Exhibit 7. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 11

12 Exhibit 7. CI Elements - Overall Imprtance 26.4 % 38.8 % 34.8 % Cntinuus mnitring Regular reviews Ad hc reprts Nte: The results have been weighted accrding t the principles described in Sectin 2. Exhibit 7 reveals that while cntinuus mnitring was the mst imprtant CI element, it was als the secnd mst widely utilized ne, superceded nly by regular reviews - albeit by nly a small margin. In light f these results, it is fair t say that cntinuus mnitring was the mst central rle f the CI elements t the surveyed large cmpanies. Regular reviews fllwed clsely as the secnd mst imprtant rle f CI while ad hc reviews had a ntably mre minr rle than the ther tw. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 12

13 3.1.6 LOCATION OF INFORMATION PROCESSING In large cmpanies perating in the natinal markets under study, 70 percent f infrmatin prcessing was perfrmed in-huse while the rest was utsurced. Exhibit 8 displays the lcatin f infrmatin prcessing in each market. In Mexic, 52 percent f infrmatin prcessing was dne in-huse. In ther markets the distinctin was far greater, with representing ne extreme where as much as 83 percent f infrmatin refining was cnducted in-huse. Exhibit 8. Lcatin f Infrmatin Prcessing in Each Market 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Mexic Mexic Nrway Nrway In-huse Outside the cmpany Nte: Overall average shwn by range line. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 13

14 On average, 71 percent f in-huse intelligence activities were cnducted in a centralized unit. The market-specific situatin is shwn in Exhibit 9. stands ut, with a 50:50 divisin between centralized intelligence units and utside units. Mexic represents the ther extreme, with nly 14 percent f intelligence activities perfrmed utside f centralized crprate units. In, Mexic, Nrway, and, greater than 75 percent f intelligence activities were cnducted within a centralized unit. T cnclude, intelligence activities were usually perfrmed in-huse and this in-huse prcessing was usually dne within a centralized unit. Exhibit 9. Lcatin f In-Huse Infrmatin Prcessing in Each Market 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Mexic Mexic Nrway Nrway In centralized unit Outside centralized unit Nte: Overall average shwn by range line. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 14

15 3.1.7 UTILIZATION OF INTERNAL COMPETITIVE INTELLIGENCE AND TACIT MARKET KNOWLEDGE As Exhibit 10 reflects, n average, cmpanies perceived that they were perfrming satisfactrily in extracting and cllecting infrmatin and knwledge pssessed by crprate persnnel. Cmpanies perating in Mexic seemed t be the mst effective at utilizing internal intelligence and cmpanies perating in and the seemed t be lagging ther cuntries in capturing and leveraging internal human intelligence surces. Exhibit 10. Average Utilizatin f Infrmatin Pssessed by Persnnel in Each Market Nrway Mexic Pr 2.0 Fair 3.0 Satisfactry 4.0 Gd 5.0 Nte: Overall average shwn by range line. In six f the nine markets under study, the tw mst cmmn respnses were satisfactry and gd when survey respndents were asked t describe their internal human intelligence prcesses. This respnse result cupled with the data shwn in Exhibit 10 describes the situatin regarding this area f CI quite well - cmpanies appear t be successfully utilizing infrmatin and tacit market knwledge pssessed by their persnnel. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 15

16 3.1.8 EXISTENCE OF CI-DEDICATED IT TOOLS Mre than ne-third f the respnding cmpanies glbally have had an IT tl dedicated t CI fr mre than three years (see Exhibit 11). Surprisingly, ne in fur cmpanies did nt yet have a dedicated IT tl supprting their intelligence effrt with n plans f acquisitin. Hwever, n average, twthirds f the respnding cmpanies were using such IT tls (see Exhibit 12). Exhibit 11. Existence f CI-Dedicated IT Tls Glbally 26.1 % 39.2 % 9.0 % 8.2 % 17.6 % Yes, >3 years Yes, <3 years Yes, new N, but planned N, NOT planned GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 16

17 Exhibit 12. Existence f CI-Dedicated IT Tls in Each Market 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Mexic Mexic Nrway Nrway Exists Des nt exist Nte: Overall average shwn by range line. In and, cmpanies mst ften did nt have such IT tls and were nt planning n acquiring ne. In all f the ther markets, the respnding cmpanies mst ften have had such IT tls fr mre than three years. Nrway was the nly market in which mre than half (54 %) f the respnding cmpanies have had such IT tls fr ver three years. In Mexic, an equal percentage (28%) f cmpanies have been using such tls fr mre than three years as thse which have nt been using such tls fr less than three years. As can be seen in Exhibit 12, had the highest penetratin f IT tls fr this purpse, with 82 percent f large cmpanies in this cuntry using such technlgy t supprt CI. Mst f the large cmpanies in the markets studied were using CI-dedicated IT tls. On the ther hand, mst f the cmpanies that were nt currently using such tls were nt even planning n acquiring ne. Generally, three ut f fur cmpanies surveyed either had such a tl r were planning t acquire ne. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 17

18 3.1.9 BENEFITS ACHIEVED THROUGH THE USE OF CI Increased quality f infrmatin was cited as the mst imprtant benefit f CI by ne third f the respnding cmpanies as shwn in Exhibit 13. Als, increased awareness and accelerated decisin-making were ften ffered by respndents as the mst imprtant benefits. The 2nd mst imprtant and the 3rd mst imprtant benefits are nt taken int accunt in Exhibit 13. Exhibit 13. Distributin f Mst Imprtant Benefits f CI Glbally 7.4 % 3.3 % 3.3 % 2.1 % 2.1 % 33.7 % 8.2 % 10.7 % 12.3 % 16.9 % Increased quality f infrmatin Accelerated decisin-making Imprved systematicality Imprved effectiveness Decreased csts Increased awareness Imprved disseminatin Imprved threat & pprtunity identificatin Smething else Time savings GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 18

19 Increased quality f infrmatin als tpped the list f verall imprtance f the benefits f CI with a clear margin (see Exhibit 14). The five benefits that fllwed were almst equally imprtant, with increased awareness slightly ranked as the secnd mst imprtant verall benefit f CI and imprved disseminatin cited as the third mst imprtant verall benefit f CI. Time savings, decreased csts, and imprved effectiveness were seen as the least imprtant verall benefits f CI. Exhibit 14. CI Benefits - Overall Imprtance 4.7 % 4.0 % 3.3 % 3.1 % 24.7 % 11.2 % 11.4 % 14.1 % 11.5 % 12.0 % Increased quality f infrmatin Imprved disseminatin Imprved systematicality Imprved effectiveness Smething else Increased awareness Accelerated decisin-making Imprved threat & pprtunity identificatin Decreased csts Time savings Nte: The results have been weighted accrding t the principles described in Sectin 2. Exhibits 13 and 14 underscre that increased quality f infrmatin was easily the mst imprtant benefit f CI fr the surveyed cmpanies. Als, the tp fur benefits f CI were the same in bth f the exhibits, clearly indicating which f the achieved benefits were cnsidered imprtant by the large cmpanies acrss the wrld. In additin, the three least imprtant benefits were the same in bth exhibits. These were either nt ften achieved, culd nt be measured and hence substantiated, r were nt regarded as imprtant as ther benefits. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 19

20 3.2 ORGANIZATION OF THE ACTIVITY PERSONNEL GROUPS UTILIZING CI PRODUCTS Nearly tw thirds (62%) f the respnding cmpanies perceived tp management as the mst imprtant user grup f infrmatin prducts prduced by CI (see Exhibit 15). There were als market-specific variatins in this regard. In, fr example, tp management was regarded as the mst imprtant user f infrmatin prducts (83%), while in the and, the percentage was lwer than 50 percent. Middle management was given as the mst imprtant user f infrmatin prducts by 24 percent f the respnding cmpanies, while 12 % f respndents indicated that experts were the mst imprtant user f intelligence prducts. Hwever, in Nrway and, mre than 40 percent f respndents cnsidered middle management the mst imprtant persnnel grup in this sense. In Mexic and the, mre respndents cnsidered experts t be mre imprtant users f intelligence prducts that middle management. Exhibit 15. Distributin f "Mst Imprtant" Respnses Regarding Persnnel Grups as Users f CI Prducts in Each Market 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Mexic Nrway Tp management Middle management Experts Other emplyees Nte: The clred lines represent the verall cumulative averages. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 20

21 Exhibit 16. Overall Imprtance f Persnnel Grups as Users f CI Prducts 7.2 % 21.7 % 38.8 % 32.2 % Tp management Middle management Experts Other emplyees Nte: The results have been weighted accrding t the principles described in Sectin 2. When all f the imprtance rankings were weighted accrding t the same principles utlined in Sectin 2, the verall imprtance f different persnnel grups as users f CI prducts was achieved. Exhibit 16 shws that, verall, tp management was the mst imprtant user f CI prducts, while middle management was nearly as imprtant. Experts were als fairly imprtant users f CI infrmatin, while ther persnnel grups were a minrity in this sense. As a general bservatin, management can be said t be the strngest users f CI prducts in large cmpanies. Almst nine ut f ten cmpanies (86 %) reprted this dynamic t be the case in their rganizatins. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 21

22 3.2.2 FUNCTIONS THAT UTILIZE CI PRODUCTS On average, strategic planning/business develpment was seen as the mst imprtant functin t utilize intelligence prducts by 54 percent f the respnding cmpanies (see Exhibit 17). Hwever, market-specific differences were apparent, as witnessed by German respndents wh reprted a figure f 83 percent fr the equivalent categry. Alternately, in, Mexic, and the, the mst imprtant functin t use CI prducts was sales/marketing. In, equal percentages f respndents saw strategic planning/ business develpment and sales/marketing as the mst imprtant functin. Sales/marketing was, n average, cnsidered t be the mst imprtant functin by ne third f the respnding cmpanies. In the case f prduct and technlgy R&D and sme ther functin r prcess the crrespnding figures were 8 and 5 percent, respectively. Exhibit 17. Distributin f "Mst Imprtant" Respnses Regarding Functins as Users f CI Prducts in Each Market 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Mexic Mexic Nrway Nrway Strategic planning/business develpment Prduct and / r technlgy R&D Sales and / r marketing Sme ther functin / prcess Nte: The clred lines represent the verall cumulative averages. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 22

23 Exhibit 18. Overall Imprtance f Functins as Users f CI Prducts 7.0 % 20.8 % 38.6 % 33.6 % Strategic planning/business develpment Prduct and / r technlgy R&D Sales and / r marketing Sme ther functin / prcess Nte: The results have been weighted accrding t the principles described in Sectin 2. Using the same weighting principles as described in Sectin 2, the verall imprtance f different functins as users f CI prducts is reflected in Exhibit 18. Strategic planning and business develpment was, verall, the mst imprtant functin t use CI prducts fllwed clsely by sales and marketing. Als prduct and technlgy R&D was a heavy functinal user f CI as well. The mst frequently cited persnnel grup that used CI prducts was tp management and the mst frequently cited functin that used CI was strategic planning and business develpment. In light f these results, it culd be feasibly asserted that CI plays primarily a strategic rle in the large cmpanies surveyed. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 23

24 3.2.3 CI-BUDGET Exhibit 19 highlights that, n average, apprximately 77 percent f the respnding cmpanies had allcated a budget fr CI. Hwever, there were significant market-specific differences. A case in pint was, where apprximately 88 percent f respndents had a budget fr CI. In, the cmparable percentage was apprximately 55 percent which was similar t the Nrwegian experience where just mre than half f the respnding cmpanies had an allcated budget fr CI. Exhibit 19. Percentage f Respndent Cmpanies with CI Budget 80.0 % Nrway 57.1 % Mexic 84.2 % 78.1 % 83.3 % 77.0 % 54.5 % 86.2 % 87.5 % 0.0 % 20.0 % 40.0 % 60.0 % 80.0 % % Nte: Overall average shwn by range line. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 24

25 3.2.4 PERSON RESPONSIBLE As can be seen in Exhibit 20, apprximately 90 percent f the respnding cmpanies had a persn respnsible fr CI. In Mexic,, and, all f the respnding cmpanies had such persnnel n staff. Cmpanies in,, and reprted the lwest percentages f 65, 82, and 85 respectively. In mre than half f the markets under study, greater than 90 percent f cmpanies had a specific individual n staff with respnsibility fr CI. Exhibit 20. Percentage f Respndent Cmpanies with Dedicated Staff fr CI 95.0 % Nrway 90.9 % 89.5 % Mexic 84.6 % % % 81.8 % 65.1 % % 0.0 % 20.0 % 40.0 % 60.0 % 80.0 % % Nte: Overall average shwn by range line. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 25

26 3.2.5 EMPLOYEES ALLOCATED TO CI As Exhibit 21 shws, the median number f fulland part-time emplyees allcated t CI was, in general, quite lw, especially taking int accunt the fact that the respnding cmpanies were within the tp 50 r tp 100 in their respective markets. seemed t be the nly exceptin, althugh the figure was smewhat distrted by very high figures reprted by sme f the respnding cmpanies. When the respnses with figures exceeding 1,000 are left ut f the equatin, the median figures f full-and part-time emplyees dedicated t CI becmes 9 and 2.25, respectively. Hwever, even after accunting fr prbable utlier statistics, these percentages are still ntably higher than in the ther markets. In Nrway, the median number f bth full- and part-time emplyees was ne. had the secnd smallest number f full-time emplyees allcated t CI in the respnding cmpanies, even thugh the ttal number was third highest. German cmpanies seemed t have fairly large intelligence units cmpared t ther markets under study. Hwever, German cmpanies did nt usually have anyne wrking part-time in CI. In less than half f the markets under study did cmpanies emply part-time staff in CI (measured in median figures). and seem t be exceptinal given their relative high prprtin f part-time emplyees allcated t CI. Exhibit 21. Full-Time and Part-Time Emplyee Allcatin t CI Mexic Mexic Nrway Nrway Full-time emplyees (median) Part-time emplyees (median) Nte: The range and turquise lines shw the glbal median numbers f full-time and part-time emplyees, respectively. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 26

27 3.3 FUTURE OUTLOOK OF CI DEVELOPMENT OF CI INVESTMENTS As can be seen in Exhibit 22, the majrity (68 % n average) f respnding cmpanies frecasted that their investments in CI will increase during the next five years. There were n markets in which mre than five percent f the cmpanies frecasted a drp in their investments in CI. Cmpanies perating in and Nrway had the mst psitive utlk fr intelligence funding given that apprximately 80 percent f respndents anticipated an increase in funding fr CI. In, mre than half (54 %) f all f the respnding cmpanies expected a significant increase, whereas in Nrway, the cmparable percentage was 10 percent. In,, and apprximately 40 percent f the respnding cmpanies expected their investments in CI t remain cnstant. Exhibit 22. Prjected Develpment f CI Investments fr Next Five Years 90.0 % 80.0 % 70.0 % 60.0 % 50.0 % 40.0 % 30.0 % 20.0 % 10.0 % 0.0 % % Mexic Mexic Nrway Nrway Increase mderately Increase significantly Decrease mderately Decrease significantly GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 27

28 3.3.2 CRITICAL CI DEVELOPMENT ISSUES The respnding cmpanies appeared t value CI given their intentins t increase their investments in it. It might be inferred frm this bserved intentin that the lwer the prjected investment grwth, the higher the level f the activity already. Hwever, there was nt enugh evidence t categrically state this as fact r even speculate it as prbable. When the respndents were asked t chse critical issues facing their CI functin, the issue f identifying critical infrmatin needs was cited either as mst critical r secnd mst critical (see Exhibit 23). Hwever, there was much cuntryspecific variatin regarding this issue. Fr example, in, ne-third f the respnding cmpanies indicated that the issue f tp management cmmitment mst requires develpment. In, tw equally critical issues were indicated as utilizing internal knwledge and identifying critical infrmatin needs. In Nrway, human resurces was seen as the issue mst in need f develpment. In, the issue f prcuring integrated technlgies shared the tp psitin fr mst critical develpment issue with identifying critical infrmatin needs. Exhibit 23. CI-Related Issues Mst in Need f Develpment 90.0 % 80.0 % 70.0 % 60.0 % 50.0 % 40.0 % 30.0 % 20.0 % 10.0 % 0.0 % Mexic Nrway Human resurces Identifying critical infrmatin needs Utilizing internal knwledge Effectiveness f infrmatin gathering and management Tp management cmmitment Amunt / quality f user training Prcuring integrated technlgies GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 28

29 On average identifying critical infrmatin needs seemed t be the mst critical CI issue in need f develpment as can be seen in Exhibit 24. It was fllwed by effectiveness f infrmatin gathering and management, and utilizing internal knwledge. Als, the issue f tp management cmmitment ranked relatively high. Exhibit 24. Cricitical CI Develpment Issues Glbally 4.7 % 5.4 % 3.4 % 3.1 % 2.8 % 2.6 % 18.8 % 5.8 % 6.6 % 15.0 % 8.0 % 9.6 % 14.2 % Identifying critical infrmatin needs Utilizing internal knwledge Human resurces Measuring the benefits Smething else Prducing marketable prducts Schedule Effectiveness f infrmatin gathering and management Tp management cmmitment Prcuring integrated technlgies Budget Amunt r quality f user training Persnnel's resistance twards change Nte: The results have been weighted accrding t the principles described in Sectin 2. As can be seen by cmparing Exhibits 23 and 24, the glbal averages were nt representative f the situatin in sme f the individual markets. Hwever, they are imprtant in presenting the general situatin glbally. Cuntry-specific variatin is nrmal due t cmpanies being in different stages f CI develpment r valuing different aspects f it. Althugh mst ther issues were nt n similar psitins in the tw exhibits, identifying critical infrmatin needs was the tp ranked issue in bth. It can be reasnably asserted that this was the single mst imprtant CI-related issue in need f develpment. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 29

30 4. CONCLUSION Almst nine in ten large-scale cmpanies in varius markets arund the wrld used CI and n average had practiced it fr three t five years. The CI units usually had fur full-time emplyees and ne part-time emplyee, with 88 percent f the cmpanies als having named a persn respnsible fr the activity. Nearly eight cmpanies in ten had a CI budget and abut tw thirds were planning t increase their investments in the activity. These figures strngly indicate that CI was an established practice in large-scale cmpanies in all cntinents. CI als seemed t fill a primarily strategic rle, with tp management being the mst imprtant persnnel user grup f CI infrmatin prducts. Functinally, strategic planning and business develpment mimicked the results fund fr the persnnel perspective. Cntinuus mnitring was seen as the mst imprtant CI element, with cmpanies mainly fcused n gathering infrmatin n cmpetitrs, custmers, and their wn industries. These three infrmatin needs can be seen frming the cre f CI activity in large cmpanies in markets arund the wrld. Mst (70 %) f the infrmatin prcessing was dne in-huse, and 71 percent f it in a centralized unit. The large-scale cmpanies were able t leverage tacit knwledge and market infrmatin pssessed by internal persnnel nly satisfactrily. It was als ne f the issues that needed the mst develpment in additin t the issues f identifying critical infrmatin needs, and f gathering and managing infrmatin effectively. Practicing CI had mst ften benefited cmpanies in the frm f increased quality f infrmatin, increased general awareness, and imprved threat and pprtunity identificatin. T cnclude, this study asserts that CI was a fairly recently established, strategically active functin in the large cmpanies surveyed. The CI units were generally fairly small althugh mst f the infrmatin prcessing was dne internally. The cmpanies that use CI were clearly reaping the benefits f the activity, althugh there were still sme areas that need develpment. The cre f CI activity was the cntinuus mnitring f cmpetitrs, custmers, and cmpanies wn industry. GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 30

31 APPENDIX 1 (1/6) A. DEFINITION OF THE ACTIVITY 0. Is there a systematically rganized activity t cllect and analyze infrmatin regarding the external perating envirnment f yur cmpany? a) Yes. Please, mve t questin n. 1. b) N. Please, answer the sub-questins belw and mve t questin n. 17 n page 5. I Hw d yu keep up-t-date n the develpments in yur external perating envirnment? II Are yu planning n launching an activity f this srt? a) Yes I When? Why? Elabrate, please: b) N I Why nt? Elabrate, please: 1. What is the activity called? a) Business Intelligence b) Cmpetitive Intelligence c) Cmpetitr Intelligence d) Knwledge Management e) Market Intelligence f) Market Mnitring g) Market Research h) Market Analysis i) Smething else, what? 2. Fr hw lng has the activity been systematically rganized? a) Over 10 years b) 5 10 years c) 3 5 years d) 1 3 years e) Less than 1 year GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 31

32 APPENDIX 1 (2/6) 3. List the three mst imprtant intelligence needs in rder f imprtance (1 3, 1 = mst imprtant). a) Intelligence regarding the industry in which yur cmpany perates b) Cmpetitr intelligence c) Custmer intelligence d) Macrenvirnmental trends e) Custmer industry intelligence f) Cuntry intelligence g) Technlgical intelligence h) Intelligence regarding similar industries i) If smething else, what? Why d yu cnsider thse needs imprtant? Elabrate, please: 4. Des the activity include the fllwing elements? List the elements t which yu answered yes in rder f imprtance, please. (1 = mst imprtant). a) Cntinuus mnitring f perating envirnment I Yes Imprtance: II N b) Regularly delivered reviews / reprts I Yes Imprtance: II N c) Ad hc reprts I Yes Imprtance: II N 5. Cmpanies utilize varius surces in their effrts t prcure infrmatin. Infrmatin f this srt (e.g. news items r market reprts) ften needs prcessing in rder t add value in decisin-making. a) What percentage f this prcessing is dne utside the cmpany, e.g. by a service prvider? % b) What percentage f this prcessing is dne in-huse? % I What percentage f this in-huse prcessing is dne in a centralized unit dedicated t the activity? % II What percentage f this in-huse prcessing is dne utside the centralized unit dedicated t the activity? % GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 32

33 APPENDIX 1 (3/6) 6. Cmpany persnnel ften have useful infrmatin abut the external perating envirnment f the cmpany. Hwever, extracting and cllecting this infrmatin in rder t make it actinable can be a challenging task. In yur pinin, hw well have yu been able t vercme this challenge? a) Excellent b) Well c) Satisfactry d) Fair e) Pr What means d yu use in extracting and cllecting this infrmatin? 7. Is there a data prcessing system / IT tl dedicated t the activity? a) Yes. Has been fr mre than 3 years b) Yes. Has been fr less than 3 years c) Yes, a new ne d) N, but is planned e) N and is nt planned If yu answered yes, briefly describe the purpse f use f this system / tl: 8. Please, list the three mst imprtant benefits gained thrugh the activity in the rder f imprtance (1 3, 1 = mst imprtant). Thrugh the activity... a) The general level f awareness has been increased b) The internal disseminatin f infrmatin has been imprved c) The decisin-making prcesses have been accelerated d) The quality f infrmatin gained t supprt decisin-making has been increased e) Cst savings have been achieved f) Time has been saved g) Activities have been made mre effective (e.g. gathering verlapping infrmatin has been reduced/avided) h) Gathering and analysis f infrmatin has been systematized i) Threat and pprtunity identificatin has been imprved j) Smething else, what? GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 33

34 APPENDIX 1 (4/6) 9. Give cncrete examples n the ways yur cmpany assesses the benefits f the activity? B. ORGANIZATION OF THE ACTIVITY 10. a) Hw wuld yu describe the rganizatinal psitin f the unit in charge f the activity? b) Hw wide a respnsibility des the unit have regarding the activity inside yur cmpany? (e.g. lcal, glbal, main respnsibility etc.) c) T which rganizatinal level des the activity reprt t? 11. Which ne(s) f the representatives f the fllwing grups utilize the intelligence deliverables prduced by the activity? Please, list the representatives f the grups in rder f imprtance with regards t the utilizatin vlume f the intelligence deliverables prduced by the activity (1 3, 1 = mst imprtant). a) Tp management I Yes Imprtance: II N b) Middle management I Yes Imprtance: II N c) Experts I Yes Imprtance: II N d) Other emplyees I Yes Imprtance: II N GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 34

35 APPENDIX 1 (5/6) 12. Which ne(s) f the fllwing functins utilizes the intelligence deliverables prduced by the activity? Please, list the functins in rder f imprtance in regard t the utilizatin vlume f the intelligence prducts prduced by the activity (1 3, 1 = mst imprtant). a) Strategic planning / business develpment I Yes Imprtance: II N b) Sales and / r marketing I Yes Imprtance: II N c) Prduct and / r technlgy R&D I Yes Imprtance: II N d) Sme ther functin r prcess, what? I Yes Imprtance: II N 13. Has a budget been allcated fr the activity? a) Yes b) N I If yu answered n, where are the csts directed? 14. Is there a persn respnsible fr the activity? a) Yes I If yu answered yes, what is the title f the respnsible persn? b) N 15. Hw many full-time emplyees are allcated t the activity? peple 16. Hw many part-time emplyees are allcated t the activity? peple C. THE FUTURE 17. D yu see the investment fr the activity in the next five years as likely t... a) Increase significantly b) Increase mderately c) Remain the same d) Decrease mderately e) Decrease significantly GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 35

36 APPENDIX 1 (6/6) 18. Chse the three mst imprtant issues that need develping and list them in rder f imprtance (1 3, 1 = the mst imprtant). a) Staying n schedule b) Budget c) Mitigating the resistance f persnnel t change d) Human resurces e) Tp management cmmitment f) Identifying critical infrmatin needs g) Amunt f user training h) Utilizing internal knwledge i) Prcuring apprpriate, integrated technlgies j) Effectiveness f infrmatin gathering and management k) Measuring the benefits f the activity l) Prducing marketable prducts in the activity m) Smething else, what? 19. What kind f changes d yu see taking place in the next five years regarding the activity? GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 36

37 The GIA White Paper series 1/2004 Intrductin t Cmpetitive Intelligence 2/2004 Intrductin t Strategic Intelligence 3/2004 Measuring the Benefits f Cmpetitive Intelligence 4/2004 Key Success Factrs f Cmpetitive Intelligence 1/2005 Develping an Intelligence System 2/2005 Building Strategic Intelligence Capabilities thrugh Scenari Planning 3/2005 Recipe fr Success in a Cmpetitive Intelligence Intranet 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study Abut the GIA Additinal infrmatin abut the Glbal Intelligence Alliance The Glbal Intelligence Alliance (GIA) is a glbal netwrk f business research and Cmpetitive Intelligence (CI) cnsulting cmpanies. Leveraging its wrldwide reach, the Glbal Intelligence Alliance prvides multinatinal rganizatins with a single surce fr all CI requirements including: prcess cnsulting, intelligence services, educatin, and leading technlgy slutins. Fr further infrmatin r assistance in any Cmpetitive Intelligence-related matters, please cntact the GIA Member cmpany clsest t Yu, r refer t the GIA website at GIA White Paper 4/2005 Cmpetitive Intelligence in Large Cmpanies - Glbal Study 37

38 Glbal Intelligence Alliance Fr mre infrmatin, please visit r cntact the GIA representative clsest t yu: Internatinal Australia Central & Eastern Eurpe China France Hng Kng Japan Suth Krea Mexic Prtugal Russia Singapre Suth Africa Tunisia UK USA East Cast USA Flrida USA Midwest Glbal Intelligence Alliance Grup Glbal Intelligence Alliance Australasia Level 12, 95 Pitt Street, Sydney, NSW 2000, Australia Glbal Intelligence Alliance Latin America Rua Jaquim Flrian, 466 cj 306 Itaim Bibi CEP: Sã Paul, SP, Glbal Intelligence Alliance 174 Spadina Avenue, Suite 302, Trnt, Ontari, M5T 2C2, GatewayBaltic Elizabetes 51, 1010 Riga, Latvia Glbal Intelligence Alliance China Unit 2602, United Pwer Internatinal Plaza, 1158 Jiangning Rad, Shanghai, , P.R. China Glbal Intelligence Alliance Itämerenkatu 1, Helsinki, RV Cnseil 48, rue des Mines Paris, France Glbal Intelligence Alliance GmbH Drtheenstraße 1, Essen, Glbal Intelligence Alliance Hng Kng 31/F, Twer One, Times Square, 1 Mathesn Street, Causeway Bay, Hng Kng McRBC Ngizaka Lilien Heim 601, , Minami-Ayama, Minat-ku, Tky Japan 3mecca 6th F. Kyungjae Tngshin Bldg, 111 Junghak-dng, Jngn-gu, Seul, Krea Americas Market Intelligence (Mexic) Pestalzzi 923, Cl. Del Valle Mexic, D.F Mexic Grwth Setting Avenida Engenheir Duarte Pachec, Amreiras, Trre 2, Pis 5, sala 9, Lisba, Prtugal ALT Research & Cnsulting , Tschelkvske shsse, 2, bld.1, Mscw, Russia Glbal Intelligence Alliance Singapre 8 Eu Tng Sen Street, #23-81 The Central, Singapre Butterfly Effect Intelligence Nrth Blck, Sheldn Place Office Park, 5 Lne Clse, Lnehill, Suth Africa RV Cnseil Tunisie 11, avenue 02 mars, Manuba, Tunisia Glbal Intelligence Alliance UK 55 Old Brad Street, Lndn EC2M 1RX, United Kingdm Glbal Intelligence Alliance USA Inc. 1 Penn Plaza, 36th flr, New Yrk, NY 10119, USA Americas Market Intelligence 166 Alhambra Circle, Suite 200, Cral Gables, FL 33134, USA Glbal Intelligence Alliance USA Inc West Bryn Mawr Avenue, Suite 1300, Chicag, IL 60631, USA +358-(0) inf@glbalintelligence.cm australasia@glbalintelligence.cm brazil@glbalintelligence.cm canada@glbalintelligence.cm baltics@glbalintelligence.cm china@glbalintelligence.cm finland@glbalintelligence.cm france@glbalintelligence.cm germany@glbalintelligence.cm hngkng@glbalintelligence.cm japan@glbalintelligence.cm +82-(0) krea@glbalintelligence.cm mexic@glbalintelligence.cm prtugal@glbalintelligence.cm russia@glbalintelligence.cm singapre@glbalintelligence.cm suthafrica@glbalintelligence.cm tunisia@glbalintelligence.cm uk@glbalintelligence.cm usaeast@glbalintelligence.cm usaflrida@glbalintelligence.cm usamidwest@glbalintelligence.cm 2014 Glbal Intelligence Alliance. All rights reserved.