INDUSTRY INSIDER: Toward Competitive Intelligence

Sep 01, 2002

Paul Meade, vice-president, Best Practices
Pharma companies may need to take a closer look at the way brand teams and corporations as a whole use competitive intelligence (CI)-across multiple functions-or they risk missing lucrative opportunities.

Paul Meade, vice-president of the consulting company Best Practices and a 23-year pharma industry veteran, discusses a study of CI practices at 19 companies, 15 of which are pharma. He says companies can empower CI personnel to help them more effectively manage the competitive environment.

PE: What misconceptions surround CI?

Meade: Most of what is termed CI in the pharma industry is really market research-primary or secondary data that is often already published. Real CI is a sophisticated technique that uses various tools-such as competitive landscapes, scenario development, war games, competitor lifecycle profiles, science mapping, comparative matrix development, and franchise portfolio analysis-to understand what competitors are doing strategically and tactically.

PE: What is pharma's report card for CI?

Meade: The pharma industry has a long way to go to catch up to, say, the packaged goods and software industries. But our study shows that getting competitive information is not what's difficult. We interviewed a senior pharma executive who said that 70-80 percent of competitive intelligence can be found within one's own organization-from in-house employees to the sales force. But communicating it effectively and using it cross functionally, often pose the greatest challenge.

PE: How can companies improve that?

Meade: When CI is centralized, intelligence managers have senior management's support and are recognized as important within the company. They enjoy a top-down directive for their recommendations but are less informed about brands because they don't serve on brand teams. When it's decentralized, CI is attached to specific brands and tactical competitive issues. However, data gatherers sometimes feel that the information they provide falls on deaf ears because brand and product managers are too busy to incorporate it into their plans. So even though the decentralized structure places CI closer to the brand, it lacks teeth. A centralized structure that has management support and close links to brands would overcome that barrier.

Most companies tend to assign a CI person to a therapeutic area, which may include several brands, or to one large brand exclusively. But that person often has a relatively passive role, in which he or she only provides information to the brand team.

Information users tell us that CI personnel don't have the skills or industry knowledge to make recommendations or implement them, which is what both sides want. The industry needs to hire experienced people out of pharma marketing, pharma sales, and people familiar with pharma brands. The best competitive intelligence people hold serious titles such as manager, or even director, and sit on brand teams. Once they are properly trained, marketing managers should involve them in formulating recommendations for tactics and strategies and get them involved in implementation.

PE: Is it worth the effort?

Meade: Tremendous value and revenue gains can be made by understanding what competitors plan to do and when they plan to do it. In one case study, a CI team discovered that a competitor had a serious manufacturing problem resulting in the product being withdrawn temporarily from the market for longer than everyone expected. They reported it to the brand marketing team, which developed a strategy to go to the competitor's customers and fill that gap. The company earned millions of dollars in incremental revenue just from knowing that the competitor was going to be off the market longer than it said it would. In another scenario, a company tracked down a competitor's clinical studies and developed a plan that included a competitively advantageous indication. That medication was approved and hit the market around the same time as the competitor.

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