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What is Competitive Intelligence?

What is Competitive Intelligence?
Salvador Carlucci

There are probably as many definitions of Competitive Intelligence (CI) as there are CI professionals. Because of this, I would like to start by sharing with you my experiences with CI and how I have developed a definition of competitive intelligence. This definition has been developed over the course of 9 years with the help of CI professionals, academics, start-ups, and corporate individuals.

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My background:

The first time I heard about competitive intelligence (CI) was in 2003 while in graduate school in Los Angeles. At a career fair, I met a former military spy and the founder of HealthIQ. Tony Page was the first person in the US military to publish on the topic of Early Warning Intelligence, and HealthIQ was the first CI Company focused on the Pharmaceutical Industry. After several discussions with Tony, I joined HealthIQ as an intern.

CI fascinated me so much that I did my own research on the topic of CI. In 2005, with the help of Tony and Dr. David Finegold (currently Senior Vice President for Lifelong Learning and Strategic Growth Initiatives at Rutgers School of Management), we published two articles in the journal Nature Biotechnology. The first article was on the Role of Competitive Intelligence in Biotech Companies and the second article was on How to Conduct Competitive Intelligence in a start-up environment.

Fast forward, I left Novartis Pharmaceutical, where I built and headed one of the largest CI teams in the Pharma Industry, to travel around Asia and Africa. During my travels, I have decided to revise the articles published in 2005 to reflect my experience at Novartis, where the CI team was recognized as a High Performing Team and generated hundreds of millions of dollars under my leadership.

Salvador and Tarciana Carlucci, Coo-Founders of Atacana Group
A career in healthcare marked by adventure, work experiences in big pharma, and entrepreneurship.

Defining Competitive Intelligence

Competitive intelligence is often mistakenly thought of in narrow ways. CI sometimes is mistaken as a means of gathering and processing secondary market information. Other times CI is seen as repeating what other people say and sometimes as gathering “secret” or confidential information about competitors.

I have adopted a much more strategic view of CI, defining it as the proactive and ongoing analytical process that gathers and transforms disaggregated future-looking market and competitor data into relevant, actionable knowledge that key decision-makers of the organization can readily use.

Let me break this definition into the different components:

  • Proactive and ongoing:
    In order to be effective, the CI professional needs to identify the intelligence requirements and gather information proactively and on an ongoing basis. Furthermore, the CI professional needs to ensure that there is a systematic process in place. In future blog posts, I will expand on this concept.
  • Analytical process:
    A CI function must have a well-defined process in place in order to be successful. A defined process will help explain to different stakeholders what competitive intelligence is and the resources it requires.
  • Future-looking:
    Future-looking information comes from non-public sources. Non-public information gives a competitive advantage as it is proprietary knowledge. In addition, if the information gathered is future-looking, the organization will be prepared to meet the upcoming landscape changes.
  • Actionable knowledge:
    In order to show business impact, the CI professional must show the actions that the organization has taken based on the intelligence provided. The successful CI professional will be able to make recommendations on actions that the organization should take based on his understanding of the competitive landscape.
  • Decision makers:
    The CI function and CI process should be built around the intelligence needs of decision-makers. The CI professional has to ensure that the intelligence gathered will support key decisions.

From this broader perspective, CI is thus closely related to other core management concepts such as strategic planning, market research, business intelligence, market analysis, and knowledge management.

Creating Winning Strategies for Pharma
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Salvador Carlucci and Sabih Beck, Co-Founders of Atacana Group

Competitive Intelligence Benefits

CI can help companies and distinct business functions in a variety of ways. For example, it can map the competitive landscape and identify key regulatory milestones and new product launches. This type of competitive intelligence is vital input to enable the firm to define its strategy and market. Competitive intelligence can warn managers when key strategic assumptions need to change or when unforeseen events require the company to react and adjust its business model to maintain competitive advantage. CI can help the organization identify new opportunities, identify competitive benchmarks and help executives identify and assess merger and acquisition candidates, joint-venture and alliance partners, and team partners. Most importantly, if a robust CI system is in place, the company can conduct timely competitive simulations to pressure test its strategy and tactics and develop new actions that reflect the changes in the competitive landscape.

Competitive intelligence is an ongoing process useful at all organizational levels and across all functions. It allows the forward-thinking business leader to clearly define the marketplace, ask disciplined questions, and receive timely and reliable answers. It also can help the scientist learn about new technologies in the market that could greatly benefit the company by improving discovery platforms or by reducing manufacturing costs. In addition, CI can be used to keep the organization functioning well when key employees leave by ensuring they do not take all of their knowledge with them. And it can be used to train new employees so that they more quickly understand the firm’s strategy and competitive marketplace and therefore become fully productive faster.

For all these reasons, CI done well can enhance a company’s probability of success in a highly risky biotech environment by reducing uncertainty and improving investment decisions, while a failure to conduct CI can threaten a firm’s survival.