Competitive Intelligence Programs: An Overview

MALHOTRA, Yogesh. Competitive Intelligence Programs: An Overview. Brint Research Institute (on line), 1996 (accessible at http://www.brint.com/papers/ciover.htm ). Consulted the 03-22-07.

What is a Competitive Intelligence Program?
"A formalized, yet continuously evolving process by which the management team assesses the evolution of its industry and the capabilities and behavior of its current and potential competitors to assist in maintaining or developing a competitive advantage" (Prescott and Gibbons 1993). CIP tries to ensure that the organization has accurate, current information about its competitors and a plan for using that information to its advantage (McGonagle & Vella, 1990).


How is Competitive Intelligence Different Than Business Espionage?
CI uses public sources to find and develop information on competition, competitors, and the market environment (Vella & McGonagle, 1987). Unlike business espionage, which develops information by illegal means like "hacking," CIP uses public information - all information that can be legally and ethically identified and accessed.

How to Determine Competitive Intelligence Information Needs?
Effective implementation of its CIP requires not only information about the competitors, but also information on other environmental trends such as industry trends, legal and regulatory trends, international trends, technology developments, political developments and economic conditions. The relative strength of the competitor can be judged accurately only by assessing it with respect to the factors listed above. In the increasingly complex and uncertain business environment, the external [environmental] factors are assuming greater importance in effecting organizational change. Therefore, the determination of CI information needs is based upon the firm's relative competitive advantage over the competitor assessed within the 'network' of 'environmental' factors.

What are the General Uses of Competitive Intelligence Information?
The competitive intelligence information obtained using CIP can be used in programs that supplement planning, mergers and acquisitions, restructuring, marketing, pricing, advertising, and R&D activities.

What is the Role of the Organization's Internal Competitive Intelligence Unit?
Despite the increasing sophistication of CI tools and techniques, the most important role in a CIP remains that of the organization or its internal Competitive Intelligence Unit. Once the CI needs have been defined, the CI-unit is responsible for collection, evaluation and analysis of raw data, and preparation, presentation, and dissemination of CI. The CI-unit may handle all the activities itself, or it may assign some tasks to an outside contractor. Often, decisions have to be made on assignments of data collection, and data analysis and evaluation.
The CI-unit has to decide upon the choice of sources of raw data. Should it use government sources or online databases, interviews or surveys, drive-bys or on-site observations? It has also to decide if and when to deploy 'shadowing' and defensive-CI. Other decisions may involve choice of specialized interest groups (such as academics, trade associations, consumer groups), private sector sources (such as competitors, suppliers, distributors, customers) or media (such as journals, wire services, newspapers, financial reports) as the sources of information. Very frequently, such issues involve balancing various constraints, such as those of time, finances, staffing, etc. and therefore are based upon individual judgement.

Are there any Methods/Methodology for a Competitive Intelligence Program?
The purpose of CIP is to gather accurate and reliable information. The groundwork for the CIP is done through an internal Competitive Intelligence Audit which is primarily a review of the organization's operations to determine what is actually known about the competitors and their operations. As a starting point for obtaining CI data, the organization generally has some knowledge of its competitors, and its own CI needs. In absence of a definition of its information needs, the organization may not be able to deploy its resources effectively. To avoid such a scenario an organization may conduct a CI audit which is effectively a review of its current operations to determine what is actually known about the competitors and their operations. The CI audit helps in pinpointing the organization's CI needs.
When the organization has some knowledge about its competitors and its own CI needs, it proceeds to the stage of gathering CI data. Based upon the CI needs, relevant data can be gathered from the organization's own sales force, customers, industry periodicals, competitor's promotional materials, own marketing research staff, analysis of competitor's products, competitor's annual reports, trade shows and distributors. Specific CIP techniques include querying government resources and online databases, selective surveys of consumers and distributors about competitor's products, on-site observations of competitor's plant or headquarters, "shadowing" the markets, conducting defensive CI, competitive benchmarking, and reverse engineering of competitor's products and services.
Raw data is evaluated and analyzed for accuracy and reliability. Every attempt is made to eliminate false confirmations and disinformation, and to check for omissions and anomalies. Omission, which is the seeming lack of cause for a business decision, raises a question to be answered by a plausible response. Anomalies (data that do not fit) ask for a reassessment of the working assumptions (McGonagle & Vella, 1990). While the conclusions one draws from the data must be based on that data, one should never be reluctant to test, modify, and even reject one's basic working hypotheses. The failure to test and reject what others regard as an established truth can be a major source of error (Vella & McGonagle, 1987).
Evaluation and analysis of raw data are critical steps of the CIP. Data that lacks accuracy and reliability may be marginally correct data, concoction of very good data, bad data, or even disinformation. All data is produced or released for some certain purpose. In CIP, reliability of data implies the reliability of the ultimate source of the data, based upon its past performance. In CIP, accuracy of data implies the [relative] degree of 'correctness' of data based upon factors such as whether it is confirmed by data from a reliable source as well as the reliability of the original source of data. Evaluation of CI data is done as the facts are collected and unreliable or irrelevant data is eliminated. Analysis of remaining facts includes 'sifting' out disinformation, studying patterns of competitor's strategies, and checking for competitor's moves that mask its 'real' intentions (McGonagle & Vella, 1990). The resulting CI information is integrated into the company's internal planning and operations for developing alternative competitive scenarios, structuring attack plans and evaluating potential competitive moves.

What are the Tools and Techniques for Competitive Intelligence Activities?
Different types of CI tools and techniques are available for different requirements of the CIP.
·Contacting Government Agencies can yield valuable data for the CIP, but may often require excessive lead time.
·Searching Online Databases is a faster method of finding competitive information, although it is more expensive. With increasing sophistication and affordability of information technology, this technique is expected to become less expensive. Database search does not provide information that has not been released to the public or that has not yet been collected.
·From Companies and Investment Community Resources Some types of data that are not widely available from databases can be procured by contacting the corporation itself or from investment community sources.
·Surveys and Interviews Surveys can yield plenty of data about competitors and products, while Interviews can provide more in-depth perspectives from a limited sample.
·Drive-by and On-site Observations of the competitor's [full or empty] parking spaces, new construction-in-progress, customer service at retail outlets, volume and pattern of [suppliers' or customers'] trucks, etc. can yield useful CI information about the state of the competitor's business.
·Competitive Benchmarking is used for comparing the organization's operations against those of the competitor's.
·Defensive Competitive Intelligence involves monitoring and analyzing one's own business activities as the competitors and outsiders see them.
·Reverse Engineering of competitor's products and services may yield important CI information about their quality and costs.

Any 'Standard' Tools and Techniques for all Competitive Intelligence Activities?
Not all CIP tools and techniques are suitable for all CI objectives; the CI-unit has to use judgement in determining the relevant CI needs and the most appropriate tools and techniques. Specific tools and techniques are chosen depending upon various factors such as CI needs, time constraints, financial constraints, staffing limitations, likelihood of obtaining the data, relative priorities of data, sequencing of raw data, etc. (McGonagle & Vella, 1990). While government sources have the advantage of low cost, online databases are preferrable for faster turnaround time. Whereas surveys may provide enormous data about products and competitors, interviews would be preferred for getting a more in-depth perspective from a limited sample. Therefore, human judgement is an essential element of the decision regarding which CI techniques to deploy in a specific situation.

How can the Competitors Foil Your Competitive Intelligence Program?
Very likely the target competitor would be aware of the organization's CI moves and could make all possible efforts to thwart or jeopardize the organization's CIP. The competitor may have its own CI activities targeted at the organization. Or it might intentionally generate disinformation to mislead the organization's efforts. In fact, the organization's CI activities may find data which the competitor has 'planted' to keep the organization "preoccupied" and "off-balance" (McGonagle & Vella, 1990).
The competitor could also create the problem of false confirmation by releasing similar, but misleading (or incomplete), facts to different media sources. The competitor may also use common ploys to pump information from the organization's employees. Such ploys include "the phantom interview", "the false flag job seeker", "the seduction," and "the nonsale sale."
· Phantom Interview The competitor, posing as a potential employer, inquires from the organization's employees about their duties and responsibilities.
·False Flag Job Seeker A competitor's trusted employee , in the guise of a potential job seeker, tries to learn about the organization in the course of the employment process.
·Seduction Involves flattery of organization's employees to encourage disclosure of important facts. In the nonsale sale technique, the competitor pursues the organization's nonemployee associates such as distributors and suppliers to elicit information about the organization's pricing structure, customer service, etc.

What are the Information Hazards of Competitive Intelligence Information?
The objective of the Competitive Intelligence Program is to gather relevant information that is valid and accurate. Incomplete or inaccurate information may jeopardize the organization's CI efforts.
·False Confirmation There might be instances of false confirmation in which one source of data appears to confirm the data obtained from another source. In reality, there is no confirmation because one source may have obtained its data from the second source, or both sources may have received their data from a third common source.
·Disinformation The data generated may be flawed because of disinformation, which is incomplete or inaccurate information designed to mislead the organization's CI efforts.
·Blowback Blowback may occur when the company's disinformation or misinformation that is directed at the competitor contaminates its own intelligence channels or information. In all such cases, the information gathered may be inaccurate or incomplete.


Dublin core analysis

DC Title: Competitive Intelligence Programs: An Overview
DC Creator: MALHOTRA, Yogesh
DC Subject: Business intelligence, business spying, Competitive Intelligence Program
DC Description: The main interest of this article is to explain how Competitive Intelligence is different than Business Espionage. It also lists the tools and techniques for Competitive Intelligence activities
DC Publisher: Brint Research Institute
DC Contributor:
DC Date: 1996
DC Type: text
DC Format: HTML
DC Identifier: http://www.brint.com/papers/ciover.htm
DC Source:
DC Language: English
DC Relation:
DC Coverage: International
DC Rights: © Copyright, 1996, Yogesh Malhotra, Ph.D.,All Rights Reserved

Annual Report to Congress on Foreign Economic Collection and Industrial Espionage—2004

Office of the National Counterintelligence Executive (ONCIX). Annual Report to Congress on
Foreign Economic Collection and Industrial Espionage—2004. (on line), April 2005 (accessible at http://www.loyola.edu/dept/politics/intel/fecie/fecie_2004.pdf). Consulted the 03-15-07.


Here is just the scope note. You can read the whole report by clicking the link above.

This is the tenth annual report reviewing the threat to the United States from
foreign economic collection and industrial espionage. The report seeks to
characterize and assess efforts by foreign entities—government and private—
to unlawfully target or acquire critical US technologies, trade secrets,
and sensitive financial or proprietary economic information. The paper
focuses on technologies, the loss of which could undermine US military
capability, impede the ability of US firms to compete in the world marketplace,
or have an adverse effect on the US economy, thereby weakening
national security and eroding the current US technological lead.

The report is being submitted in compliance with the Intelligence Authorization
Act for Fiscal Year 1995, Section 809 (b), Public Law 103-359,
which requires that the President annually submit to Congress updated
information on the threat to US industry from foreign economic collection
and industrial espionage. It updates the ninth annual report published in
February 2004 and includes data for the fiscal year 2004, including the
period 1 October 2003 through 30 September 2004.

The contents of this report include the following:

• The types of foreign entities believed to be conducting industrial espionage.
• The kinds of information and technology targeted.
• The methods used by foreign actors to acquire that technology.

This report deals with the acquisition of sensitive US technology—either
classified or proprietary—by foreign entities, both government and private.
The acquisitions take a variety of forms, including:

• Economic Espionage, which is narrowly defined by Section 1831 of the
Economic Espionage Act of 1996 (EAA) to be the theft of trade secrets1
in which the perpetrator acts intending or knowing that the offense will
benefit any foreign government, foreign instrumentality, or foreign agent.
Proving links between foreign governments and entities caught stealing
US goods is often impossible, even where such links may exist.


• Industrial espionage or trade secret theft that cannot be linked to a foreign
government agent and where the acquisition has been made for the
intended economic benefit of someone other than the owner of the trade
secret. These violations are covered under Section 1832 of the EAA.

• Violations of export control regulations include the foreign acquisition of
restricted US dual-use technologies—having both military and civil
applications—by countries or persons that might apply such items to uses
inimical to US interests. These include goods that might be related to the
proliferation of weapons of mass destruction and their delivery means and
those that could bolster the military and terrorism support capability of
certain countries. Export Administration Regulations (EAR) issued by
the United States Department of Commerce, Bureau of Industry and
Security (BIS), cover these violations.

• Illegal exports of US arms and implements of war (including
cryptography) and defense technology to proscribed countries that could
misuse or cause illegal proliferation of those items. These shipments are
prohibited under the International Trade in Arms Regulations (ITAR),
which are administered by State Department’s Office of Defense Trade
Controls.

The paper highlights foreign efforts to target sensitive US technologies even
when those efforts are legal. For example, it is not illegal for foreign entities
to request classified or controlled information or technology, even
though the actual export of that technology would violate US laws. The fact
that such technologies are being targeted, however, is considered important
information for this report. This paper does not cover violations of US
copyright laws, such as the illegal plagiarism of videos, compact disks, or
other literary or artistic works.

This assessment is a product of a cooperative effort across the Counterintelligence
(CI) Community. It was compiled by the Office of the National
Counterintelligence Executive (ONCIX) based on input from a broad crosssection
of US Government entities. In particular, databases compiled by the
Defense Security Service (DSS), the Air Force Office of Special Investigations
(AFOSI), the Army Counterintelligence Center (ACIC), and the Army
Case Control Office (ACCO) were instrumental in providing much of the
detail for this assessment. The Federal Bureau of Investigation (FBI)—the
lead investigative agency for enforcing economic espionage statutes—provided
significant analytical and investigative information as did the Department
of Defense’s (DoD’s) Counterintelligence Field Activity (CIFA) and
the National Geospatial-Intelligence Agency (NGA).


Dublin core analysis

DC Title: Annual Report to Congress on Foreign Economic Collection and Industrial Espionage—2004
DC Creator: Office of the National Counterintelligence Executive (ONCIX)
DC Subject: Industrial espionage, Economic Espionage, Business Intelligence
DC Description: “The paper highlights foreign efforts to target sensitive US technologies even
when those efforts are legal. For example, it is not illegal for foreign entities
to request classified or controlled information or technology, even
though the actual export of that technology would violate US laws. The fact
that such technologies are being targeted, however, is considered important
information for this report. This paper does not cover violations of US
copyright laws, such as the illegal plagiarism of videos, compact disks, or
other literary or artistic works.”
DC Publisher: National Counterintelligence Executive (NCIX)
DC Contributor:
DC Date: 04-2005
DC Type: text
DC Format: PDF
DC Identifier: http://www.loyola.edu/dept/politics/intel/fecie/fecie_2004.pdf
DC Source:
DC Language: English
DC Relation:
DC Coverage: InternationalDC Rights:

Company Spies

DREYFUSS, Robert. Company spies. Motherjones (on line), June 1994 (accessible at http://www.motherjones.com/news/feature/1994/05/dreyfuss.html ). Consulted the 03-15-07.

Here is just an abstract. You can read the whole article by clicking the link above.

"Sometime in the not too distant future, you will probably drive a stolen car.
But the thieves won't be a neighborhood gang, nor will they be part of an organized crime ring. You will have papers to prove that you bought the car, and every month you will make payments to a bank. The bank, in turn, will show that it bought title from Ford, General Motors, or Chrysler.
But the Big Three U.S. auto companies will nonetheless be the recipients of stolen goods. And the perpetrator once again will be that expert at black-bag jobs, the Central Intelligence Agency.
When President Clinton announced last September that the federal government would join the Big Three in a cooperative research effort to improve U.S. automotive technology, he left out the fact that the CIA may be a silent partner. According to administration officials and sources in the intelligence community, the CIA has already begun a clandestine effort to help the American auto industry.
Since the end of the Cold War, Washington has been abuzz with talk about using the CIA for economic espionage. Stripped of euphemism, economic espionage simply means that American spies would target foreign companies, such as Toyota, Nissan, and Honda, and then covertly pass stolen trade secrets and technology to U.S. corporate executives.
R. James Woolsey, President Clinton's CIA director, has said repeatedly that the CIA will not engage in corporate spy work. Targeting foreign companies and giving that information to American companies is "fraught with legal and foreign policy difficulties," Woolsey says. But there is not the slightest hesitation among other top CIA officials that such information, when obtained, ought to be shared with American automakers.
The idea of using the U.S. intelligence community to give American companies an edge is an explosive subject that has divided the CIA and provoked bitter debate in Congress. It also raises troubling questions about whether a free society can accept the kind of help that the CIA provides when the question is not one of national defense but simply dollars and cents. "[...]


Dublin core analysis

DC Title: Company Spies
DC Creator: DREYFUSS, Robert
DC Subject: economic espionage, business spying, business intelligence, Central Intelligence Agency
DC Description: The CIA has provoked debate in American Congress by spying on foreign competitors of American companies especially in the car industry sector.
DC Publisher: Motherjones
DC Contributor:
DC Date: 06-1994
DC Type: text
DC Format: HTML
DC Identifier: http://www.motherjones.com/news/feature/1994/05/dreyfuss.html
DC Source:
DC Language: English
DC Relation:
DC Coverage: International
DC Rights:

Intelligence leads the way

MC.KENNA, Ed. Intelligence leads the way. FCW.com (on line), Mai 13, 2002 (accessible at http://www.fcw.com/article76687 ). Consulted the 03-14-07.

Taxonomy software vendors say that the intelligence and defense communities are the main government users of their products, though the companies generally are reluctant to name names.

Those communities' acceptance of the software may be partly due to the fact that the Defense Advanced Research Projects Agency funds development of many of the technologies, but it is more likely driven by agency needs.

"We have way too much information and are currently operating in a wartime operational tempo," said one Defense Department official. "Analysts must be able to rapidly locate critical pieces of information that can affect battlefield operations."

To support innovation in the market, In-Q-Tel, the CIA's venture capital firm, is working with taxonomy specialists Stratify Inc. and Mohomine Inc., according to Greg Pepus, visionary solutions architect at In-Q-Tel.

Beyond the military and intelligence communities, taxonomy software is used in other areas of government. "People are just starting to learn" about these tools, Pepus said.

For example, the State Department is launching a pilot project using technology from Autonomy Corp. to provide taxonomy for a knowledge management, collaboration and basic desktop services project covering U.S. organizations overseas, said Bruce Froehlich, partner in Accenture's Government Group, the lead contractor on the project.

Also, the Institute for Intergovernmental Research (IIR), an organization funded by the Justice Department, is using Autonomy's technology for the Global Justice Information Network initiative, a project to build an information infrastructure to increase data sharing among law enforcement agencies.

The system is being used by 25 people but should eventually reach thousands of users, said Clay Jester, director of information for IIR.

When it comes to medium and small agencies, "you've got to have a very strong business case," said Mike Burk, chief knowledge officer of the Federal Highway Administration.

FHWA is using a homemade solution to support 15 portals that it has built to address issues such as the National Environmental Policy Act.

"We are not using automated technology that analyzes or indexes the information," Burk said. Instead, the department is relying on experts in different communities of practice to contribute, categorize and maintain information on the sites.

"The intent is to get the concepts and practices in place in the organization," he said.

Dublin core analysis

DC Title: Intelligence leads the way
DC Creator: MC.KENNA, Ed
DC Subject: Taxonomy software, Intelligence community, Business intelligence
DC Description: Explain why more and more organizations (mainly intelligence and defense communities) use taxonomy software
DC Publisher: FCW.com
DC Contributor:
DC Date: 05-13-02
DC Type: text
DC Format: HTML
DC Identifier: http://www.fcw.com/article76687
DC Source:
DC Language: English
DC Relation:
DC Coverage: International
DC Rights: