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Competitive Intelligence on a Shoestring

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Some big companies have entire departments devoted to gathering competitive intelligence. Yet even soloists can get a leg up on the competition through online research and the cooperation of key people.

Just don't get so wrapped up in gathering information that you wait too long to act, warns John Nolan, a retired federal intelligence officer and founder of Phoenix Consulting Group, experts in competitive intelligence. Early on in your research into a competitor's upcoming product launch, you may have the opportunity to develop a new product yourself or close out your competitor's distribution channel. The longer you wait, the fewer options you have to respond to a competitor's move.

Sherry Dickerson, vice president of Washington Researchers, a company that provides training in competitive intelligence, cautions entrepreneurs not to lie or misrepresent themselves or who they work for. Read up on the Economic Espionage Act because it governs the legalities of gathering competitive intelligence. If your company has an ethics policy, make sure you understand it. If your company doesn't have a policy, a good place to turn for help developing one is the Society of Competitive Intelligence Professionals.

1. Mine the free research online.

Databases
Start with Google.com. Yet Dickerson recommends using other search engines to find the one that gives the best results for your industry.

On Google and AltaVista, type in "link: www.whatevercompanyyouwant.com" and you will get a list of Web sites that link to the specified company's Web site. It's a good way to find out the companies that have an interest in or are doing business with the company you're researching.

InvisibleWeb.com is a directory of more than 10,000 databases, archives, and search engines. Use it to research companies, industries, and business publications.

Northern Light conducts searches of industry-focused Web pages, market research, economic analysis, and company reports. It also sells research by the page, so you can buy only the pages you need, instead of having to buy the entire report. Before you pay for information, check whether you can get the same information for free from another site like PR Newswire, suggests Estelle Metayer, president of the Montreal-based Competia, which offers training and consulting in competitive intelligence.

Marketresearch.com is a collection of more than 40,000 publications from more than 350 leading research firms.


2. Enlist the help of everyone at your company and as many customers, vendors, and others as possible.

Sure, you can do a lot of research on the Internet, but talking to people remains the best way to gather intelligence. Ask your employees to be your eyes and ears in the marketplace, in your industry -- even in your company's reception area.

"Your receptionist can be one of your most valuable resources," says Nolan. In one company where the purchasing manager routinely keeps vendors waiting for 10 to 15 minutes after they arrive, the receptionist writes down what the vendors talk about. Sometimes they talk about the deal they'll offer to the company. The receptionist e-mails that information to the purchasing manager, so he is better prepared for the negotiations.

Capitalizing on internal resources is the single best way to conduct competitive intelligence, Nolan says. Leverage the relationships your employees have with other folks in your industry, especially their colleagues from previous jobs, he says. Consider approaching company employees who are knowledgeable but undervalued as resources of competitive information, such as an accountant or quality assurance manager.

To help employees know what kind of information you're after, circulate a list of the factors that are critical to your company's success, says Jerry Miller, director of the Competitive Intelligence Center at Simmons College in Boston.

Paul Scharfman, founder and CEO of Specialty Cheese Co. in Wisconsin, eschews online research and focuses on letting every employee and customer know that he values tips they pass on to him. "The more people who know you care, the more information you're going to get," he says. He once kept a distributor from taking business away from him by confronting the distributor after a customer told Scharfman the distributor had offered him a better deal. At a trade show, Scharfman discovered that the distributor was doing everything he could to gain business, even at a low margin. He told the distributor it isn't fair to steal someone else's customers. The distributor backed off.


3. Cultivate relationships with key experts.

Identify experts in your industry or market and develop a relationship with them. The Web can help you identify experts, but it's no substitute for a personal relationship.

Gaining access to experts helps you keep ahead of published reports. Be sure that you send these experts interesting information that you come across, so you are offering help as well as asking for it, Metayer says.

In order to get information, you may have to give information. You need to know where to draw the line on giving out information. "You're going to be much more interesting to talk to if you have a bone you can throw them," Dickerson says. It's good to practice role-plays with your colleagues and prepare comebacks, but don't be surprised if you're rebuffed, she says.

The most promising sources, Dickerson says, are:

  • Securities analysts. They are especially helpful for researching public companies. However, they may follow private companies if the companies are big players in their industries. Use Nelson's Directory of Investment Research, available at business libraries, to find names of analysts.
  • Associations. They can be very valuable, especially if you want to learn about an industry. Association membership lists can help you identify suppliers. Some associations will send you their membership directory, even if you're not a member. Find names of associations in the Encyclopedia of Associations, usually available at public libraries. (Consult the American Society of Association Executives for information on associations in a variety of industries.)
  • Journalists, especially local small-town journalists. "Look for places where a target company is a big fish in a small pond," Dickerson says. If a Fortune 500 company has a plant in a small town, people in that town will be very interested in what's going on at the company and may be willing to talk to you. Then you can use that information as fodder for conversations with people at the corporate office. Because only a small percentage of any interview makes it into print, journalists know a lot more than what's in their articles.

    Go to Bizjournals.com to find local business journals, Miller suggests. To find other print publications, consult The Standard Periodical Directory, available at public libraries. Call the local paper and ask the business editor who covers the company you are interested in. If there are photos with a story, talk to the photographer, especially if photos were taken inside a manufacturing facility.

Remember, Nolan says, bigger isn't necessarily better when it comes to doing competitive research. Big companies might have entire departments dedicated to the endeavor, but smaller companies have the speed, drive, and dedication to get it done.




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