This is the third of a four-part discussion on Competitive Intelligence (a system of continuous feedback) gives businesses the winning edge over competitors and profits - even in hard economic times.

In the first parts of this series we provided a definition of Competitive Intelligence as well the definition of the competitive environment. In this segment, we will provide some real world examples of how competitive intelligence has been used by companies to face competitive challenges.

Example 1: Using CEO Bios and Company Cultures

During the late 1990s, Canada’s life insurance sector was undergoing a wave of demutualization, often coupled with the merger of smaller companies in order to better compete with their American counter-parts.

One specific insurance company was the target of two other companies. The objective was to determine which of the two competing companies was most likely to succeed in negotiating a merger.

The methodology used was a study of the CEOs and corporate cultures of the companies in question. The result was the following:

As can be seen from the graph, CEO and corporate culture of the target company share more traits with and Competitor B than with Competitor A. The actual result was that Competitor B did in fact successfully merge with the Target Company.

Example 2: The Aggressive Merchant Bank

A well-known office equipment company learned that one of its European-based companies had been purchased by an unknown company. The CEO wanted to know what the consequences would be for his company as a result of this takeover.

Research showed that the “unknown company” was a British merchant bank with a long history of buying companies, aggressively cut costs and prices in order to gain a larger market share, and then sell the company for a profit. In this scenario, the office equipment company would soon face a severe price challenge from this competitor.

The CEO and his team put in place important enhancements on their after-sale service contracts aimed at their best clients and potential customers. When the competitor did eventually launch its campaign of low-balling, it was unable to make much of dent on the company in question, because measures were taken to proactively block the competitor.

Example 3: Determining Requirements for Success

An insurance company was preparing a bid to administer and adjudicate the life and health plan for the transit commission of a large city. The insurance company’s management needed to know the issues facing the client.

An examination of municipal records indicated that the incumbent company had a history of lax rules of adjudication, and that the employees had grown accustomed to having dubious insurance claims accepted. As a further complication, the transit commission was in difficult labour negotiations with its employees, and the priority was to avoid a strike.

Following the advice of its Competitive Intelligence team, the insurance company inserted language in its proposal indicating that they would provide fair adjudication and control costs. This enabled to the insurance company to win the contract.

Conclusion

The way we see the world influences the way we act towards the world. When we change the way we see the world, we will be able to see opportunities and threats we didn’t see before. The many methodologies of Competitive Intelligence help an organization gain a different perspective on the competitive environment and thus to prosper where others fail

In our fourth and final segment, we will discuss counter-intelligence using real world situations.