Competitive Intelligence Global Benchmarking Project Update 2013

Super corporate intelligence programs have grown, despite a recession Fuld Insights | March 2013

FULD INSIGHTS | Global Benchmarking Project Update 2013

Certain industries invest heavily in watching their competition

Super corporate intelligence programs have grown, despite a recession 1
What a difference five years can make particularly in competitive intelligence. Todays business climate is challenging for most corporations, with consolidations and downsizing very much a part of the business landscape. It seems the one shining exception is the function of competitive intelligence where particular industries and certain regions have witnessed a surge in large competitor monitoring efforts. The C-Suite is also paying more attention to vital intelligence than it did five years ago. These findings are based on a five-year update report benchmarking nearly 400 companies from around the globe. First issued in 2007, the first report titled, From Stick Fetchers to World Class, reviewed budgets, staffing and overall sophistication of competitive intelligence programs worldwide. This 2013 report is the first official update and contains some significant shifts in how some of the worlds largest companies watch their competition. Competitive intelligence is a function within large corporations around the globe that serves to track and analyze the competition, provide early warning to management, as well as report to management on both opportunities and threats, both tactical and strategic. It is a function that delivers analyses and conducts strategic exercises such as war games and longer term scenario assessments. Among the findings that provide evidence of extraordinary growth in corporate intelligence in specific industries and sectors are: Super programs have emerged with relatively generous budgets and lots of influence in the C-Suite. In Asia and in Europe, companies with intelligence budgets of more than $2 million or more did not exist five years ago but today represent 2-3-percent of all intelligence budgets. In North America, programs that spend more than one-million dollars increased from approximately 5-percent of all corporate intelligence program budgets to nearly 10-percent of all budgets.

Super intelligence programs are those companies or divisions of companies that spend one-million dollars or more annually on competitive intelligence activities.

FULD INSIGHTS | Global Benchmarking Project Update 2013

Across the board, from Asia, Europe to North America, the surviving corporate intelligence programs have increased their influence and direct reporting to the CSuite. All regions report an approximately 5-percent increase of their programs that report directly to the chief executives office.

Tech, Telecom and Manufacturing Companies Now Also Leap tall buildings
While certain industries, such as financial services, did dramatically reduce their spending in competitive intelligence, other sectors more than made up for the difference while some were a surprise: Pharmaceutical and biotechnology companies appeared to have only slightly reduced their expenditures in tracking competition. Even with a slight fall off in investment, this sector still represented over a quarter (27-percent) of all intelligence efforts spending more than $2 million per year, still by far the largest of any industry. Traditional manufacturing companies and technology/telecommunications companies each represent more than 18% of all those sectors annually spending more than $2 million on competitive intelligence. Technology and telecom firms also represented the largest single group of companies spending more than $1 million each year on this effort. This group has quietly shifted from investing almost nothing five years ago to increasing their spending in all budget brackets. For example, five years ago 70-percent tech/telecom firms spent less than $100,000 on tracking competition. Today that number is nearly down to 56-percent with much of that difference moved to the super intelligence investment of one-million dollars or higher.

Access to the c-suite has shifted

Sometimes it is the access not the money that matters. Anecdotally, access nearly always trumps budget when it comes to succeeding in using the intelligence in a timely and effective manner. Access to decision makers is critical and particular industries have succeeded in gaining access more than others. Professional service firms far outshine any other sector with over 28-percent of the programs surveyed reporting to the C-Suite. Consumer firms and Technology/Telecom are next with each reporting over 22percent of their sector reporting to the CEO, CFO, or COO.

FULD INSIGHTS | Global Benchmarking Project Update 2013

The largest loss in influence with the senior management is pharmaceuticals. While nearly 15-percent of all respondents in this sector still report to the C-Suite, the next level down that of Vice President has taken a steep loss. Those responding that they report to a Division or Unit VP dropped from over 45-percent to just over 20-percent five years later.

ABOUT THIS SURVEY Last released in 2007 (From Stick Fetchers to World Class : A worldwide survey of Corporate Intelligence Programs), Fuld & Companys Global Competitive Intelligence Benchmarking Project surveyed 141 companies from around the world, examining issues such as budget size, staffing, program age and accountability. In the five years since the first the first report was issued, 394 additional companies with a similar profile participated in the study.

The right to use this alert in its entirety, or any portion thereof, remains exclusively that of Fuld & Company Inc. Upon request, Fuld & Company will, at its discretion, grant permission to republish any of this material. This report is not intended to be, and should not be construed as, a recommendation for purchase or sale of any companies, or securities of any companies, mentioned herein. The information has been derived from statistical and other sources which we deem reliable, but their accuracy, and their completeness, cannot be guaranteed. Opinions expressed herein are based on our interpretation of available information, are subject to change, and should be considered strictly as opinions.

ABOUT FULD & COMPANY Fuld & Company is the worlds preeminent research and consulting firm in the field of competitive intelligence and business strategy. Founded by Leonard Fuld, a pioneer and leading authority in the field, Fuld & Company provides customized research and analysis, business process consulting, strategy gaming and scenario analysis, and training to help clients understand the external business environment. Our ultimate goal is to help our clients make better decisions and improve their performance. Since 1979, Fuld has served many public and private clients, including over half the U.S. Fortune 500, as well as numerous international firms, and our client roster continues to grow. Within those companies, we serve the competitive intelligence needs of many functional areas including operations, R&D, strategic planning, new ventures, e-commerce, M&A, marketing, sales, distribution/logistics, purchasing, and human resources. Our staff is organized across industry lines, with centers of expertise in technology, telecommunications, financial services, business services, insurance, pharmaceuticals/healthcare, medical devices/ diagnostics, consumer products, and industrial manufacturing. With offices in Boston, London, and Manila, Fuld & Company has global in-house, on-the-ground resources and language capabilities, since many of our assignments involve participants from locations around the world. Whether we are analyzing markets or competitors, helping companies establish their own competitive intelligence capabilities, facilitating strategy game and scenario analysis simulations, or training staff in intelligencegathering methods and analysis techniques, our work translates into bottom-line gains for our clients.

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