Current situation of use of business information in Slovene organizations with focus on competitive intelligence Ines Vrenko Peruško, MBA, GfK Gral-Iteo

AGENDA A.Competitive Intelligence as Competitive Advantage B.How well Slovene companies use information on competitors? – main research findings C.Critical evaluation of state of CI in Slovenia

A Competitive Intelligence as Competitive Advantage

The key to any successful strategy is the ability to IDENTIFY, DEVELOP AND SUSTAIN A COMPETITIVE ADVANTAGE VIS-A-VIS COMPETITORS (S. Hughes). CI AS COMPANY’S COMPETITIVE ADVANTAGE CI AS COMPANY’S COMPETITIVE ADVANTAGE CI activities as a source of sustained competitive advantage

CI can help a firm in several ways: To understand how and where to find unique resources and capabilities to help a firm compete more effectively To create a repository of embedded knowledge throughout an organization (KM) To help a firm understand how a rival has developed their own unique capabilities To help prevent erosion of information (by implementing effective counter- intelligence) CI AS COMPANY’S COMPETITIVE ADVANTAGE CI AS COMPANY’S COMPETITIVE ADVANTAGE

B How well Slovene companies use information on competitors? – main research findings

STATE OF CI IN SLOVENIA vs. GERMANY: QUALITATIVE VIEW GERMANY competitive analysis has long tradition (  steaming back from military history) American terminology is not widely known and accepted contributed significantly to CI literature, to some extent also to research moderately successful SCIP penetration (currently 65 members) in year 2000 there were 12 German-based CI consultancies (only 4 of them SCIP members) overall: CI seems to continue gaining momentum in Germany

STATE OF CI IN SLOVENIA vs. GERMANY: QUALITATIVE VIEW SLOVENIA competitive analysis has no tradition (  due to closed, socialist economic regime) terminology rather unknown in recent years topic mentioned in business press only occasionally very limited SCIP penetration (1 member), but some important positive trends!!! no specialized CI service providers, software providers nor consultancies no specialized CI courses or literature overall: due to specifics of Slovene market (small market, relatively closed, often not interesting for large MNC…) CI discipline is in its early stages (still “fighting” for its place on management’s agenda)

WHAT ABOUT USE OF BUSINESS INFORMATION IN GENERAL AND CI IN SLOVENE COMPANIES? Primary research was needed… conducted by GfK Gral-Iteo on a sample of large companies (based on theoretical findings that firm’s age and size directly impact the type of information collected) web survey among general managers/managers of marketing or sales 38 completed interviews the only relevant research on CI in Slovenia (continuation of research conducted in 2004)

FREQUENCY OF USE OF OUTSIDE SOURCES OF BUSINESS INFORMATION AND TYPES OF SOURCES 60% of interviewed companies use outside sources of business information few times per week or even daily; most domestic payable databases

TYPES OF BUSINESS INFORMATION MOST OFTEN LOOKED FOR IN SOURCES Financial/accounting related information are the most often looked for

COLLECTION OF INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND THREATS N=38

WHO COLLECTS INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND THREATS? N=38 market research company clipping company

HOW SUCCESSFUL ARE COLLECTORS OF INFORMATION? * Evaluated by only 2 companies SCALE – not successful at all 5- very successful Most frequently mentioned as collector of information, but evaluated as least successful in doing this

WHO ANALYZES INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND THREATS? N=38 Collectors and analyzers of information on competitors are the same; conclusion in line with German practice

WHO RECEIVES AND USES INFORMATION ON COMPETITORS, BUSINESS ENVIRONMENT, OPPORTUNITIES AND THREATS? N=38 Receivers of information on competitors are higher in firm's hierarchy, but also mgmt of marketing and sales departments

OPEN/ PUBLICLY AVAILABLE SOURCES OF INFORMATION ON COMPETITORS From their marketing or other types of communication … N=38

IMPORTANCE OF OPEN/ PUBLICLY AVAILABLE SOURCES OF INFORMATION ON COMPETITORS N=38 SCALE – source not important at all 5- source very important

OTHER/ PRIVATE SOURCES OF INFORMATION ON COMPETITORS Information obtained by management and other employees from outside sources N=38

IMPORTANCE OF OTHER/ PRIVATE SOURCES OF INFORMATION ON COMPETITORS N=38 SCALE – source not important at all 5- source very important

USE OF SOFTWARE SOLUTIONS FOR COLLECTION AND PROCESSING OF INFORMATION ON COMPETITORS Crm, SALES Logix IBON (?) GfK Leaftlet monitor (?) Business secret N=38

MANAGEMENT AWARNESS OF IMPORTANCE OF FOLLOWING INFORMATION ON COMPETITORS N=38

COMPETITIVE THREAT: EVALUATION OF COMPETITORS THAT REGULARLY AND SYSTEMATICALLY COLLECT INFORMATION ON THE COMPANY N=38 High awareness of competitors’ threat: 95% of managers believe competitors (all or some of them) collect information on their companies!

COMPETITIVE THREAT: EVALUATION OF COMPETITORS HAVING AT THEIR DISPOSAL IMPORTANT INFORMATION ABOUT THE COMPANY Management is well aware of competitors’ CI activities! N=38

EVALUATION OF INTERNAL FLOW OF INFORMATION AND RECENT CHANGES RELATED TO CI GOOD INTERNAL FLOW OF INFORMATION 79% of interviewed managers estimate that important information on competitors, which is at disposal of company’s employees come to the management (decision- makers) in companies Is almost 30% of interviewed large Slovene companies overly self-confident?

Large Slovene Company Business trips, expert meetings, fairs – the most frequently used open source of information on competitors Open sources Buyers/customers, business partners, suppliers and employees – all know a lot about competition Private sources 80% of managers believe important information come to company’s leadership Most important information on: 1. buyers and customers 2. suppliers and business partners 3. competing companies Collected and analyzed in Marketing and Sales Management 50% of companies do not value enough information on competitors, on business environment and on new business opportunities and threats

C Critical evaluation of state of CI in Slovenia

TO SUMMARIZE Research results indicate relatively high level of awareness of importance of CI activities among interviewed companies However, according to results of the survey standard CI practices are less developed While companies are aware of competitors’ CI actions, many decide not to take any actions in order to improve their own CI practices Possible hypothesis: large Slovene companies do it in more informal, less systematic way (less direct responsibility, less resources dedicated to SW solutions)?

Possible reasons for such state of CI in Slovene companies: lack of competitive environment tradition (most today’s large companies established and grew in times of closed socialist regime) decades of market orientation toward ex-Yugoslav markets (accompanied by an impression of intuitive familiarity with those markets) small market (but with extremely educated consumers!) often not attractive for multinational companies (lack of transfer of some managerial practices, including CI) relatively closed economy (lack of competitive pressure from abroad) lack of providers of specialized CI software and consultancy (as a result of low demand) slow and selective transfer of new knowledge and best practices from abroad TO SUMMARIZE

Thank you for your attention! FOR MORE INFORMATION, PLEASE CONTACT: Ines Vrenko Peruško, MBA, research consultant Geni Arh, director of ad hoc department