Monitoring the Competition: Finding Out What's Really Going on Over There

Every organization has them; some have only a few, others have hundreds. Governments worry about keeping their activities fair and equitable, yet sometimes subsidize them. Consumers want them to produce a variety of high quality goods at low prices. Managers are constantly wary of them and thirst for more and more information about them. Each "them" refers to the same entity competitors. In the United States, interest in competitors and their behavior appears to have paralleled the rise in our trade and budget deficit, the general trend toward global markets, and the realization that a competitor's actions and its ability to establish and sustain competitive advantage have lasting profit implications. However, many organizations are not prepared to identify and understand systematically the implications of the various strategic and tactical actions that their competitors may take. The field of competitive intelligence has emerged, which provides a framework for systematically dissecting industries, identifying competitors and potential competitors, and assisting in the development of action plans to maintain or enhance one's competitive position. The field of competitive intelligence can be divided into three subfields: techniques of data collection, data analysis (to convert information into intelligence), and the management of the competitive intelligence function. Drawing on his firsthand experience as president of a cogrporate intelligence research firm, Fuld presents, in a practical format, the techniques of data collection and several of the key managerial issues of competitive intelligence. In the first chapter, he identifies the three key characteristics of a successful intelligence program: constancy, longevity, and involvement. Without a continuous program that has organizationwide support nurtured over a 3-to-5-year period, the intelligence effort will be at best underutilized and at worst a failure. Using the three keys to success as a foundation, the remaining chapters of the book outline six steps for the development of a monitoring program. Three of the steps reviewing published sources, motivating internal sources, and identifying and utilizing the hidden intelligence assets within one's organization focus on the collection of information. The other three steps organizing information, communicating information, and developing an intelligence department center on managerial issues of competitive intelligence. Throughout the book, four assumptions emerge that underlie the author's philosophy of competitive monitoring: keep it simple, keep costs under control, provide accurate and timely information, and have high ethical standards. As a way of helping the reader develop an appreciation for his approach, Fuld weaves a set of monitoring "snapshots" into each chapter. These snapshots are examples of how organizations deal with a particular issue such as an audit form, a competitormonitoring request form, or a job description for a competitor analysis. In the four chapters devoted to information collection, Fuld identifies a variety of published and personal sources and suggests that every department and person within the organization is a potential source. Given the wide scope of potential sources, competitive intelligence personnel must address two major motivational problems. First, people often do not know what information is useful to the intelligence effort. Second, people often do not want to take the time to gather and share information. To address these two problems, Fuld suggests that intelligence personnel should make employees aware of the need to monitor the competition and provide incentives to do so. Such awareness can be heightened through such activities as developing a mission statement, publishing newsletters, and making personal contacts. Incentives can be as simple as expressing personal thanks to someone who has obtained intelligence or as complex as designing elaborate compensation systems. A final aspect of a successful collection effort is the development of an intelligence library. Fuld presents a set of guidelines for developing such a library. The guidelines emphasize the need to provide a few key sources and identify other locations, such as a public library, where additional resources can be found. Four chapters address the managerial issues of storing and disseminating intelligence, developing an intelligence program, and ethics. Central to any intelligence effort is the storing of competitive information. Fuld suggests either setting up manual files with an effective indexing system or using computers, both of which are equally viable options. Three types of electronic databases that can be used to store intelligence are spreadsheets, directories, and textual databases. Whatever type of storage system a firm uses, Fuld recommends that guidelines be developed that ensure the system is user friendly, actionable, cost effective, and adds value to the information. Several helpful hints and lots of good examples are provided to assist the reader. A second managerial issue of critical importance is the timely and accurate dissemination of relevant information to the appropriate decision makers. A useful distinction is drawn here between methods for delivering intelligence to key decision makers and delivering it to the organization as a