Author M.

V Rakimane
Information Management
Topic: Apply the CI cycle in developing a CI strategy for an existing South African
company.
16 August 2009
Introduction

Competitive intelligence is rapidly becoming a management priority for operators in

deregulated markets and is also an essential ingredient of successful planning tool
integrating company’s strategy. Successful CI program do more than simply allowing
company’s to react to market development but allowing those businesses to anticipate the
market. The use of CI cycle [needs, planning and direction and information storage and
processing, collection and reporting and analysis and production as well as dissemination] in
developing a CI strategy will be explored in-depth to show how the CI program will be
applied.

In South Africa at the moment the concept of CI is still new and developing a competitive
intelligence programme for joint venture in alcohol distributing environment will not be easy.
The essay will focus on the following company Brandhouse of which it went to bed with the
three giant companies; thus Diageo, Heineken and Namibia brewery. Brandhouse was
established in 2004 and it is a growing young organisation, vibrant and its core objectives
are to distribute premium quality product to the middle class segment of the greater South
African population. Through its three parent companies, brandhouse has a workforce of
about 580 and has 20 offices around the country and has a diverse portfolio of premium
alcohol brands in the white spirits, brown spirits, ready-to-drink and beer category.

The company’s vision is to be the most celebrated company in South Africa “celebrating life
every day, everywhere”. The duties of CI team in a company are to achieve competitive
advantage through a well organized CI program and strategy without intelligence is not
strategy- it’s guessing.
Needs, Planning and Direction

Information is power, truly enough but the trick part of it is synthesizing information into
critical competitive insights that drive corporate strategy is the real art of the competitive
intelligence. Indeed, as a highly effective CI leader at Brandhouse the management has
raised a need for crucial information on SABMiller, Distell Group Limited and Pernod Ricard
as they are the most threatening organisations in the market. A useful starting point for
defining intelligence needs is to think in terms of six basic questions;

• Who? What?
• Where? When?
• Why? How?

Consider for a moment the intelligence requirements of a distributing alcohol company like
Brandhouse and the intelligence needs of the management is to know who their competitors
in the market are and they are as follows SABMiller, Distell Group Limited and Pernod
Ricard and therefore, the need to know what is their cost and prices, strategy, marketing,
capacity and technology and market share. (Bernhardt, 2003:49-50). The market share of
Distell [33, 4 %] and Pernod [30, 5 %] SABMiller [98 %], where is their most generated
revenues come from; meaning their most likely distributed products such Grolsch and Peroni
Nastro Azzurro (SABMiller), Chives and Jameson (Pernod) and Amarula and Three Ships
(Distell). The next step as CI specialist is to know when and where [which customer] they
plan to introduce their new product. Why have they chosen the new apparently more
expensive and market competitive product? How have our competitors been able to tripe
their production and distribution from 2005 to 2008? (Datamonitor, 2009).

Strategic intelligence is designed to provide senior decision-makers with the big picture and
long-range forecast they need in order to plan for the future, so at Brandhouse the aim is to
combine the Marketing, Sales and Finance department to build a strong CI program, why the
reason been to avoid the notion of the CI unit reporting only to the CEO but it should be a
multifaceted and collaborative function of a CI because other organisations report to
marketing and sales. This will enable the CI group to have a company-wide network and
ultimately gain exposure in front of senior management where the CI leaders are able to
communicate strategic implications. As the CI leader it will be manageable to send CI
personnel at sales and marketing staff meetings to provide updates and exchange
information. The direction of the company is to send also CI gatherers to conventions to
collect specific information based on product team needs and to separate commercial and
R&D CI functions to align personnel to appropriate roles (Stinson and William, 1990).
Information Storage and Processing

At Brandhouse there is no intranet as the organisation is growing at a slow pace in terms of

recruiting more staff and the duty of a CI is to develop a system that will be user friendly in
terms of retrieving, archiving and searching applications. In most cases these are electronic
in nature and typically reside within company intranets or in groupwave applications. For
Brandhouse to be up-to-date with brand trends CI knowledgeHouse have to be set up to be
able to synthesize information that is knowable and intelligence as well as relevant to the
organisations culture. The CI program must have level set components (users should be
able to obtain a working knowledge of CI in order to make orientation of new CI recruit more
easier to understand the culture), research components (secondary and published
information, including competitor profile) and knowledge management components (users
should have a platform to share their information regarding sales, product, acquisitions and
so forth) (Bernhardt, 2003:51).

This section will include “yellow pages” or directory containing a list of Brandhouse
framework for integrating CI applied for the company. The key to Brandhouse CI function is
the implementation of a thorough CI program that will maintain and disseminate information
to its management through the CI unit and also getting every individual worker to access to
intranet site CI knowledgeHouse. The key features of this system are its information
reusability and self-access. The CI programme maximises efficiency by automating much of
the information collected during ad hoc request and researching the weekly report CI news-
to-go or to post on intranet. As a CI practitioner with the assurance that access will be
provided is obtained through justification of need (Blenkhorn and Fleisher, 2005:62).

Processing refers to the conversion of raw data to forms usable by intelligence analysts and
others. Since intelligence deliverables are tailored to meet the specific needs of
predetermined users, raw ‘intelligence’ derived from sources such as industry and market
studies, news articles and rumours are usually unsuitable for decision-makers’ consumption.
Information storage and processing involve activities such as the translation or interpretation
of press releases and technical reports, the drafting of commentary from interviews-
especially elicitation transcripts and collation of information. Collation will include arranging
and annotating related information; drawing tentative conclusions about the relationship of
facts to each other and their significance.

Proper collection and Reporting

This portion of the cycle requires that the as the practitioner be able to obtain knowledge
through primary and secondary sources. There are numerous methods to access internal,
external, primary and secondary sources. The CI team at Brandhouse have to implement
ethical research skills and assumptions as well as hypothesis about Pernod Ricard that it
signed an agreement to sell its cognac brand bisquit and associated inventories to Distell for
$45.4 million. The transaction also includes a distribution agreement with the group covering
France, Belgium, Switzerland and Luxembourg. However, CI practitioners must understand
the meanings of ethical research and primary research requires interpersonal
communication skills and the ability to conduct interviews. Secondary research skills include
Internet and intranet searching, database searching and data mining and querying (Stinson
and William, 1990).

These types of research require determination because of high volumes of data,

management of primary and secondary sources is necessary. Exploiting a network of
internal and external human sources of intelligence can infuse an intelligence system with
unique, new and competitively relevant information that can provide management with
insights and decision options that secondary information alone cannot match. Knowing and
defining customers helps in developing new product and brand commercial advertisement
such a Brandhouse number one Taxi Driver Campaign, this initiative is to better understand
the behaviour of South African drivers. Information sources for CI specialist are as follows
suggested by (Blenkhorn and Fleisher: 2005), government agencies, online databases,
Internet, intranet, other companies, the investment community, surveys, interviews, trade
shows, conferences and drive-by or on-site observations.

Of course, strict legal and ethical guidelines must be in place to dictate how and under what
circumstances human-sourced intelligence is collected and utilized. Intelligence reporting at
Brandhouse will be channel smoothly because of the combined departments [Marketing,
Sales, Finance] will produce optimized market intelligence that leads to best-informed
executive decision-making regarding company growth and by doing this it gain valuable
opportunities to grow the business and best connect with customers, so the point really is
the CI unit must provide a simply and easy to read report to the management so that every
worker at Brandhouse can understand the position of the company in the market place.
Information gathering on demographics and economic indicators, industry [company
financial comparisons, journals and news articles search, emerging market overview,
investment analyst reports, international business research, public entity filing and
comparative information] and company [strategy, sales and proposals, HR and recruiting,
marketing communications and new product development] (Datamonitor, 2005).

Analysis and Production

Analysis is sometimes referred to as the ‘black box’ why because it includes evaluating and
transforming raw data into descriptions, explanations and conclusions for intelligence
consumers. It is in fact the key driver of intelligence collection operators and the aim of
competitive analysis is to help analyst, strategists, managers and decision-makers to make
sense of the environment and of their organisations evolving and dynamic position within it.
Intelligence analysis serves its users best when the focus is on one or more of the following
values:

• Opportunities and threats, especially unexpected developments that may require

management action or reaction like for example Pernod Ricard is said to build
another a production plant in Pretoria to easy its Cape Town production site this kind
of development send a threatening messages to its competitors.
• Motives, plans intentions, strengths and vulnerabilities of rivals and other key players;
like for example weaknesses of Pernod Ricard is poor credit rating and their threats
is increasing labour cost and strong on market presence in global wine and spirits
market.
• Tactical alternatives or options available for advancing the organisations goals;
meaning drawing SWOT analysis about competitors will bring enough alternatives to
reach organisations goals and objectives (Datamonitor, 2009).

The production of intelligence is through the following steps support the policymaking
process without engaging in policymaking, long-shot threats and opportunities (interest in
low probability, high-impact dangers and objectives), pointing is not choosing (intelligence
analysts must identify and clarify the vulnerabilities of adversaries), timeliness challenge
(avoiding managers to take whatever information available but delivering the best on time,
and is better than disseminating a perfect product too late as well). Intelligence analysis and
production is not a separate, stand alone activity but rather an integral component of
organisations overall effort to protect against and reduce vulnerabilities to competitive
threats (Herring, 2005).

Analysis and production of CI is routed on these three analysis techniques thus, strategic
analysis of rivals [knowledge of current and future capabilities and gaining competitive
advantage over rivals], vulnerability assessments [allowing CI practitioners to assess the
consequences of possible competitors] and tactical threat analysis [it is important in helping
to disrupt, sometimes prevent or minimize the impact of near-term competitor actions that
may jeopardize company operations] (Bernhardt, 2003:52).

Dissemination

Dissemination is also the weakest link in the intelligence cycle involving the distribution of
finished, evaluated, accurate and reliable information to users, the very same decision-
makers whose needs drive the intelligence requirements from the beginning. Finished
intelligence should at all times be delivered in the format preferred by the recipient, tailored
to conform to the management preferences. Brandhouse managers mostly some of them
digest information best in bullet-point presentations; others prefer comprehensive, detailed
reports with all supporting evidence. It is up to the CI unit staff members to know their
customers and their individual decision-making styles. Like for example at Brandhouse the
management prefer integrative rather than decisive, flexible and hierarchical.

Distributing the meanings and useful content to the users to take action and intelligence
workers as well as Sales, Marketing and Finance staff to re-learn and improve their inner
knowledge about rivals of their organisation is ideally should be in terms of the extent of
damage the firm is likely to suffer if the information were to become public or end up in the
hands of their rivals. This means that only personnel cleared for a particular level of
classification should be permitted to access intelligence product. According to (Bernhardt,
2003:54) there are four effective methods on intelligence dissemination and there are as
follows; Oral delivery, inclusion of intelligence reports from the field, laying out the evidence
and inclusion of optional actions and implications.

By Oral delivery it means intelligence analysts should be most certain of bringing to light
what the users really needs to know. The results for the dialogue and feedback that takes
place between intelligence staff and their customers when meeting face-to-face and
inclusion of intelligence reports from the field is assessing intelligence issues or problems
adding considerably credibility to analysis completed by a central intelligence department
and it helps in answering questions of ‘How do you know?’. Decision-makers value seeing
evidence that supports analysts and conclusions meaning laying out the evidence is always
wise to do so and the inclusion of optional actions and implications; meaning what actions
might decision-makers wish to consider taking and what are the implications? Unluckily the
smooth functioning of the intelligence process, from identifying intelligence needs through to
dissemination is rarely a straightforward matter and there are not the only ways of how to
disseminate the finished intelligence to the management of the company but only to know
the culture and needs of the organisation (Bernhardt, 2003:55).

Conclusions

Considering the development of a CI strategy is always advisable to combine department in

order to allow interaction and information sharing to ultimately reach the company’s visions
and goals. This effort produces optimized market intelligence that leads to best informed
executive decision-making regarding company growth. Therefore, CI program is to develop
an intelligence needs that will be used to guide collection activities and ultimately, the
production of appropriate and timely intelligence product. After all a good CI strategy is
routed in the planning phase where intelligence staff and users establish and agree to the
users core concerns and associated information requirements. The success of each and
every company is ‘customer focus’ knowing what your customers want and fulfilling their
expectation with innovative products and quality services and to accomplish this Brandhouse
is focusing on providing premium products and to be the most celebrated company in South
Africa “celebrating life every day, everywhere”.

The use of CI cycle [needs, planning and direction and information storage and processing,
collection and reporting and analysis and production as well as dissemination] in developing
a CI strategy showed how valuable CI is to any institutional development and prosperity its
either in new product development, sales, marketing, finance and services it will be effective
if applied in the right way.

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