Market and Competitive Intelligence

1. Market and Competitive Intelligence Chapter 2 Instructor Shan A. Garib, Winter 2013

2. Market and Competitive Intelligence Overview • Raw data alone are not enough to develop a company’s market intelligence • Data must be analyzed to give meaning and put in context to generate insights - this process is called… • Market Intelligence: acquire and analyze info to understand the market, to determine current and future trends and preferences and to assess changes in the business environment • Competitive Intelligence: analyzing info about all aspects of competitive environment to formulate plans and strategies and making decisions

3. Market and Competitive Intelligence Overview • Competitor Intelligence: gathering and analyzing information about competitors’ actions and business strategies

4. Market and Competitive Intelligence What is Market Intelligence? • Intelligence: ability to learn or understand, the ability to apply knowledge to manipulate one’s environment or to think abstractly, or the act of understanding • When companies develop market intel. they seek to take raw data and process them to develop knowledge • Process involves filtering the information, ensuring it’s validity and selecting relevant parts and deducing some meaning from them • Market intel. Includes tacit knowledge (personal knowledge not easily transferred) and explicit knowledge (knowledge easily communicated)

5. Market and Competitive Intelligence Type of Market Intelligence • Depends of target market and strategic objectives • For each global market being considered, researchers should gather 4 classes of info: • The factors shaping the political, legal and business environment - access general market conditions including risk • The market infrastructure – evaluate the difficulties and costs with distribution • The forces affecting the market – market size, consumer trends and market dynamics and potential sales/profit • Product-specific or service-specific data – eval. suitability of companies product and determine adaption, if needed

6. Market and Competitive Intelligence Type of Market Intelligence • Information about the political, legal and business environment • Political Stability • Level of pol. stability is likelihood that government will be destabilized by unconstitutional means • May result in frequent changes in regulations and laws, increase in prices To develop answers to the level of political stability, find answers to the following questions: • How stabile is the government and how often does it change? • What is the support for regime? • Strength and nature of opposition

7. Market and Competitive Intelligence Type of Market Intelligence • Information about the political, legal and business environment • Hostility to foreigners To develop answers to the level of hostility, investigate the following issues: • General attitude towards foreigners, foreign trade and foreign investment • The key decision makers and their attitudes and preferences toward foreigners

8. Market and Competitive Intelligence Type of Market Intelligence • Information about the political, legal and business environment • Control over Commerce • Can lead to situations feel pressured to bribe to secure permits to conduct trade • Research will help ID such companies

9. Market and Competitive Intelligence Type of Market Intelligence • Information about the political, legal and business environment • Weak Legal Protection for Property and Intellectual Property Rights • Essential for economic growth and innovation Researchers should investigate the following areas: • What property and intellectual property rights are recognized. How protected and enforced? • Recourse available for losses?

10. Market and Competitive Intelligence Type of Market Intelligence • Tax Regimes Researchers should investigate the following questions: • What are the tax rates? • How many companies export to target country? • How successful are competing companies? • What prices do they charge? • What are their brands? Level of Brand recognition?

11. Market and Competitive Intelligence Type of Market Intelligence • Customs Rates Researchers should investigate the following items: • Customs rates • Valuation methods • Clearance Procedures • Procedure for Appeals

12. Market and Competitive Intelligence Type of Market Intelligence • Economic Conditions Researchers should investigate the following items: • Inflation & Interest rates and trends and expectations • Who sets i

13. Market and Competitive Intelligence Type of Market Intelligence • Foreign Exchange Rates Researchers should investigate the level of risk by following items: • Exchange rates and trends and expectations • Currency Policies controls and restrictions • Who sets currency policies

14. Market and Competitive Intelligence Type of Market Intelligence • Currency Controls • Measures like interest rate changes, financial laws, and printing of money to regulate currency value • Business Conditions • Business taxes, availability of loans and laws signal availability and strength of local partners and risks of bankruptcy Researchers should investigate the following items: Number of large companies? And tax rates Bankruptcy rate and how are failed businesses treated

15. Market and Competitive Intelligence Type of Market Intelligence • Information about the market infrastructure • To determine challenges and costs involved in getting products and service to foreign customers Researchers should investigate the following items: • Geography • Available transportation infrastructure • Telecomm networks • Distribution channels

16. Market and Competitive Intelligence Type of Market Intelligence • Information about the market infrastructure Geography Researchers should investigate the following items: • Geography – total area of country? Major centers? • Topography – features of terrain? • Climate – mean temps? Seasons?

17. Market and Competitive Intelligence Type of Market Intelligence • Information about the market infrastructure Available transportation infrastructure Researchers should investigate the following items: • How much trade volume can network carry? • Roads – key linkages? % country accessible by roads? • Rail networks – national rail coverage? • Air transport – major air carriers? • Bridges and Ferries – how many major bridges are there? • Ports – where are the major ports?

18. Market and Competitive Intelligence Type of Market Intelligence • Information about the market infrastructure Communications Structure Researchers should investigate the following items: • Phone and Internet Services – availability? Speeds? Reliability? • Media – size? Reach? • Rail networks – national rail coverage? • Mail Services – reliable? Frequency?

19. Market and Competitive Intelligence Type of Market Intelligence • Information about the market infrastructure Distribution channels Researchers should investigate the following items: • Retail networks – most important retail chains? Size? Commission do they charge? • Sales Agents – who are they? • Wholesale Distributors – who are most important? Size? Capabilities? Located? • Transportation Companies – who are the carriers? Costs?

20. Market and Competitive Intelligence Type of Market Intelligence • Information about the Services available in the market • To determine challenges and costs involved in getting products and service to foreign customers Researchers should investigate the following items: • Power and Energy supplies – how available are the energy supplies? Reliability? Costs? • Business Services – which marketing orgs. Advert agencies, bus. Associations and key contacts will be helpful? • The Labour Market – general level of education in workforce? UN rates? Extent of unionization?

21. Market and Competitive Intelligence Type of Market Intelligence • Information about the forces that affect the market • Two main areas to assess • Competitive and country environment • The Competitive environment is assessed through Porter: • Rivalry's • Buyer Power • Supplier Power • Threat of Substitutes • Barriers to Entry

22. Market and Competitive Intelligence Type of Market Intelligence • Information about the forces that affect the market • The Competitive environment is assessed through Porter: • Rivalry's • Number of companies in the market – higher, more intense • Slow Market growth – slower more aggressive • High Fixed costs – companies work towards EOS and increase products for sale in turn increases competition • Low Switching Costs – lower, more pressure to keep customers happy

23. Market and Competitive Intelligence Type of Market Intelligence • Information about the forces that affect the market • The Competitive environment is assessed through Porter: • Threat of Substitutes • More, the more intense competition • Buyer Power • More power when there are few buyers or when they buy in bulk • More power, less competition • Supplier Power • More power when fewer or when cost to switch suppliers is high for buyers • More power, more competition