Getting The Right Information

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What information should you collect and how should you go about collecting it?

It will be essential to appoint someone to be responsible for collecting the information on a systematic basis, even though in smaller companies it may have to be done on a part-time basis. It does not really matter much who the person is so long as he is sufficiently bright and experienced to be able to see when he has got hold of something significant. It is probably preferable for him to be a marketing man because much of the information will be of a marketing nature.

The fact that he will be required to keep financial information as well as information on, for example, production capacities, does not debar him because he can either learn to interpret it or can take it to the specialists for interpretation. Once appointed, it must be made clear to everyone in the company that everything learned about a competitor must be passed to him, even though it may seem insignificant - so very often two separate insignificant facts become significant when added together. The actual organization and management of an intelligence function is well documented and consequently need not detain us here. References are offered for follow-up reading on this subject at the end of this article.

The information can come from almost anyone in the organization, ranging from a member of the purchasing department who is urged by a supplier to buy a piece of new equipment because a competitor has just done so, to a report from a technician that the competitor is advertising for a number of technical staff. Even a lorry driver might hear in a transport caf´┐Ż that the competitor is opening a new depot. The systematic collection of such information does not take up a lot of time and can obviously be of immense value in providing early warnings. Such information is picked up very much on an ad hoc basis, however, and there is much more that can be learned by careful and planned analysis.

Perhaps the most valuable source of information is your competitor's annual report, particularly if it is a sizeable public company that uses the report as a public relations tool. The annual report will also indicate related companies, either parent, subsidiary or associated, and will list the shareholdings of the directors. Within the file at Companies House, but not in the report, can be found a full list of shareholders, and what you find there can be of obvious significance. For example, you may find that the majority of the shares are owned by one family, or most of them might be held by one man who you know to be very old. If this is so, there is a strong possibility that he aught be tempted to sell, or that when he dies his successors might be tempted. On the other hand, if the share-owning family still has members involved in running. the company and drawing a salary from it, a takeover is likely to be that much more difficult. Useful information and interpretation can also often be had from reports in publications like The Financial Times and The Investor's Chronicle.

This leads on to the point that in these days there are many excellent business and management publications which devote considerable space to company profiles and industry surveys. It is possible to pick up a lot of information about some companies at the cost of a phone call to the editorial offices of some of the magazines. You will find that most of them keep indexes that enable them quickly to refer you to the issues in which relevant articles appear. Another invaluable source of information is the trade association of the company in which you are interested. Such an organization is usually quite ready to supply information as part of its public relations effort and if you are yourself a member it will probably supply a useful range of statistics about the industry and its members.

Another source of information

Another source of information that it is easy to overlook is the competitor's local newspaper. You may find information in this that you cannot find anywhere else. For example, if your competitor has a strike it is likely that a report will appear there, but not in the national press. And if your competitor does have a strike this is a splendid opportunity for you to cash in (a discussion on the morality of this is outside the scope of this article). Again, the local paper may report items such as an application for planning permission for a new factory building, and later on may report its official opening by some civic dignity. The same paper will also carry job ads which can give a due to planned expansion. So place an order for that local paper and see that someone skims through it every way.

A further important way of finding out about your competitor's activities is to go and have a look at his premises, from the outside. There is nothing whatever unethical about this if you accept the criterion that it is perfectly legitimate to take advantage of any information that is available to the public at large. This may sound an absurd thing to do, yet simply by standing outside a factory the following information can be gathered:

Locations of buildings which can, when related to a large-scale Ordnance Survey map, provide a very accurate guide to the dimensions of the site and of individual buildings. It will also show whether there is room for expansion on the site, and in some cases you will see evidence that new building is starting.

The age and condition of the buildings can be estimated, and the use to which they are put can often be detected from their nature, e.g. the presence or absence of chimneys or distillation columns of an appropriate kind.

With the above information on the size of the site and the quality of the buildings, it is possible to obtain from a local valuer an estimate of the sale value of the premises.

You may see products coming out of the factory you did not know your competitor made, and you may be able to see the extent of his stocks if they are of the kind that are stored outside.

The transport going in and out of his premises may tell you who his suppliers are, who his customers are and whether or not he runs his own transport. The amount of material being shipped out of the factory may also give some clues to production or sales volumes.

It may be possible to learn something about working methods, e.g. it will be easy to see whether or not the factory is run on a three-shift basis.

Lastly, having got all this information, it is necessary to make full use of it. This requires the involvement of top management and there is an obvious case for having "competitor activities" as a standing item on the agenda of every executive and board meeting.

By continuous monitoring of the activities of a competitor, it will be possible to build up, not just a factual documentary, but also a knowledge of the way he is likely to act in a given situation. It is possible, so to speak, to build up a knowledge of his personality and this can be of immense value in predicting his reactions to, for example, the launch of a new product by you or a price cut. Why not try it? You will be amazed how much you can find out at very little cost, and why not give the job to someone you are anxious to develop? Learning about the competition and analysing their businesses is an admirable training project.


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