Competitive Intelligence Becomes Even More Important

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Competitive Intelligence Becomes Even More Important

American corporations spend billions of dollars on R&D to develop and market new products and services. But protecting the secrecy of their offerings and their business strategies is typically an afterthought, enabling competitors to quickly copy new ideas, or even win the race to reach the market with them first.

According to Gartner, the business intelligence market is an estimated $30 billion, but competitive intelligence is only a small percentage of that figure. Inc. Magazine reports that about 80,000 people use the term "competitive intelligence" in their LinkedIn profiles.1

Competitive intelligence is the practice of gathering and analyzing information about competitors so your company can make better strategic decisions. Keep in mind a key distinction: Competitive intelligence is legal, while industrial espionage is illegal.

To make this distinction clearer, consider the case of industrial espionage committed by Chinese immigrant Walter Liew and Robert Maegerle, a retired DuPont engineer. In 2014, the two men were the first to be convicted on such a charge by a jury since the Economic Espionage Act was passed by Congress in 1996, according and article by the Associated Press.2

Liew set up a California company and hired former DuPont engineers, paying thousands of dollars for secret documents that revealed how to make a patented DuPont pigment called titanium dioxide that makes items such as paper and cars look whiter. In turn, companies controlled by the Chinese government paid $28 million to Liew for the secrets, which would enable them to build a plant by following a stolen DuPont manual stamped "Confidential."

Spying by foreign companies and governments on U.S. companies to steal trade secrets is nothing new, and it is a serious problem.

Our focus in this trend, however, is on competitive intelligence, which is best illustrated by a classic case described in a New York Times Magazine article published in 2000.3 In 1997, a Minnesota food company called Schwan's Sales Enterprises was selling frozen pizzas under the brand name Tony's. It was also working on a "rising-crust" frozen pizza to be marketed under the name Freschetta.

The problem for Schwan's was that Kraft Foods, the industry giant, was already dominating frozen pizza sales with its Tombstone and Jack's product lines. Kraft was also test-marketing its own rising-crust frozen pizza called DiGiorno...

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