Shaping
Business Strategy
Through
Competitive Intelligence
Strategic Use of
Intellectual Property Information
This project is
funded by the EU
Strategic Planning Process
This project is
funded by the EU
Business Strategy Definition
•
•
•
•
“A course of action including the specification of resources
required, to achieve a specific objective”
Strategy is the means for achieving the business objectives.
Plans a company uses to gain competitive advantage over
competitors in a market.
An advantage that a firm has over its competitors, allows it to
generate greater sales or margins and/or retain more customers
than its competition.
Business Strategy
External
alignment
Competitive
position
Internal
alignment
Business Strategy
Formulation
the match between the
organization’s strategy and
its industry structure
IOT
centers on the relationship
between an organization’s
Implementation internal aspects and its strategy
RBV
2
INTEGRATION
Michael Porter
Generic Strategy Options
Competitive Advantage
Cost
Competitive
Broad Target
Scope
Narrow Target
Differentiation
Cost Leadership Differentiation
Focus
Successful business strategy requires
awareness about the company’s external
environment, including its customers,
competitors, industry structure, competitive
forces, etc…
The Strategic Planning Process
Feedback
Objectives
Environmental
Scan: External & Internal
Strategy
Alternatives
Strategy
Formulation
Strategy Choice
Structuring
Implementing
Results
Strategy
Implementation
Feedback
Goal / Objectives
Environmental
Scan
Strategy
Alternatives
Strategy Choice
Structuring
Implementing
Results
The Strategic
Planning Process
CI:IP
Strategy
Formulation
Products / Markets
Processes
Strategy
Implementation
Strategy Formulation Process
Environmental Scan
External Environment
PEST:
•Political
•Economic
•Social
•Technology / RD
Macro Environment
Industry Structure:
Porter’s 5 Forces Model
BARRIERS
TO ENTRY
Absolute cost advantages
Proprietary learning curve
Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or
differentiation
Switching costs of firms in the
industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in
industry
DEGREE OF RIVALRY
-Exit barriers
-Industry concentration
-Fixed costs/Value added
-Industry growth
-Intermittent overcapacity
-Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes
BUYER POWER
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
THREAT OF
SUBSTITUTES
-Switching costs
-Buyer inclination to
substitute
-Price-performance
trade-off of substitutes
Traditional Competitor’s Analysis:
Sources of competitor data
“BENCHMARKING”
Looking at World-Class Competitors
World-class competitors are
proving that the best way to
match your rivals' strengths is to,
well, copy them.
Not only is it both legal and ethical, the
practice is virtually mandatory for any
company that hopes to be considered a
“world-class competitor”.
Benchmarking is:
The formal process of measuring, and comparing a
company's operations, products, and services
against those of top performers (both within and
outside that company's primary industry).
The aim of this process is to identify the leading
companies' secrets to success, and copy them.
Benchmarking as a management practice, has
been growing explosively as it directs a
company's focus outside its own walls, and is
aimed directly at the marketplace and the
competition
The Competitive Intelligence Cycle
Planning
&
Direction
Feedback
Collection
Dissemination
Source: Society for Competitive
Intelligence Professionals
Analysis
“Competitive Intelligence is a systematic and
ethical program for gathering, analyzing, and
managing external information that can
affect your company's plans, decisions, and
operations”
Competitive Intelligence Sources
Sources of CI (by extent of use)
High Use
• Trade journals
• External (on-line) databases
• External hard copy documents
• Employees
• Industry experts
• Trade organizations
Moderate Use
• Sales representatives
• Customers
• Internal documents
• Internal databases / CD-ROM
• Telephone interviews
Low Use
• Government records
• Direct observations
• Clipping services
• Security analysis
• Competitors (contact directly)
• Personal interviews
• Suppliers
Very Little Use
• Product purchasing
• Freedom of information act
• Focus groups
• Case studies
• Mail questionnaires
2002 Society of Competitive Intelligence Professionals
Based on the Society of Competitive Intelligence Professionals 1997 Salary Survey
Competitive Intelligence is a process
which gives insight on the future
direction of the market.
This process involves stages from data
to information to intelligence.
“Competitive Intelligence is a
systematic and ethical program for
gathering, analyzing, and
managing external information
that can affect your company's
plans, decisions, and operations”
Difference Between Competitive Analysis and Benchmarking
Competitive Analysis
Benchmarking
State of Mind
Catch up with Competitor
Over take competition
Reach Excellence
Methodology
Measure Performances
Compare costs
Quantity Gaps
Understand Mechanisms
Compare Processes
Indentify Positive Solutions
Sphere of activity
Direct Competitors
Sector-based comparisons
Inter-sector-based
comparisons competitors or
not
Source of Information
Sector-based analysis of
competitors
Leader Companies in their
sector
Fields of Application
Enter field of Activity
Organization / Product
One method / one Function
The Strategic Planning Process
Feedback
Objectives
Environmental
Scan: External & Internal
Strategy
Alternatives
Strategy
Formulation
Strategy Choice
Structuring
Implementing
Results
Strategy
Implementation
Strategy Formulation Process
Environmental Scan: Internal Environment
Strengths and Weaknesses:
RBV: Tangible & Intangible
Intangibles: R&D, IP, HR, Internal Processes, L&G
BSC: L&G, Internal Processes
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Intellectual Property Strategic Resources
Innovation
• Patents
• Utility models
Brand
• Trademarks
Design
• Industrial Designs
Analysis of Intellectual Property portfolios of
competitors may reveal a great deal about the
competitors’ strategies.
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Comparative advantage
Input costs
Less
Relevant
Competitive advantage
Innovation
More
Important
Innovation Process
1
Introduce Change to
• Market Need / Problem
recognition
• Idea Generation
2
Products
Services
3
• R&D / Feasibility (Technical
and Financial)
Processes
• Implementation
4
• Commercialization
5
Marketable Value Added
To introduce change to products, services, or
processes with added value to the market
through the management of knowledge,
sciences, and technology.
Financial
The Balanced
Scorecard
Customer
Internal Business Processes
Learning and Growth
Feedback
Goal / Objectives
Environmental
Scan
Strategy
Alternatives
Strategy Choice
Structuring
Implementing
Results
The Strategic
Planning Process
CI:IP
Strategy
Formulation
Products / Markets
Processes
Strategy
Implementation
Thank You