Though Their Missions And activities may seem almost identical on the surface, competitive- intelligence and market-research teams serve distinct purposes. Market-research teams typically focus on supporting a specific franchise or therapeutic area by identifying market gaps for their products to fill. Competitive-intelligence teams, on the other hand, use similar data—along with countless other resources—to predict market changes, preempt competitor activities, and develop strategic contingency plans.
"Obviously, the focus on competitors is a unique purview of competitive intelligence," says one director of competitive intelligence. "Competitive intelligence has the greatest potential to see where competitors are going."
Market Research and CI Evolve
Fifty years ago, market-research groups enjoyed vast resources—large budgets and staffs to support almost any research need—as the industry began to adapt to more consumer-driven markets. Slowly, though, companies pulled back their market-research dollars and eventually shrank internal market-research groups to one or two team members.
The pharma industry witnessed some of the most drastic cuts in market-research resources. In the mid-1980s, pharmaceutical market-research teams were almost non-existent, even in the most-respected firms. Outsourcing became a quiet solution to data collection and cost savings. Most pharma companies outsourced all their market-research work during the 1980s.
The 1990s, however, saw a shift back to building internal market-research teams, which has lasted to the present. Those teams were built to support the blockbuster generation: Find a market gap, use the data to develop a first-to-market product, and brace yourself for the sales upswing. As scores of blockbuster products approach patent expiration and companies begin looking to lifecycle management teams to expand their franchises, market-research resources are settling to a more comfortable size.
Today's internal market-research teams consist of only eight to 10 employees, nowhere near the comparatively huge teams of decades past. And 86 percent of pharmaceutical companies still outsource much of their market research.
At around the same time that market research experienced its strategic boom, competitive intelligence grew as a core competency in a number of key industries—from aerospace and consumer goods to pharmaceuticals and healthcare. Companies gave their competitive-intelligence groups the same kind of treatment they'd given market-research teams, turning them into separately funded strategic-support functions. Dedicated competitive-intelligence functions sprang up, backed by tens of millions of dollars in budgets for a modest five-to-10-person staff.
Within pharmaceuticals, almost every major company enhanced its competitive-intelligence function between 1998 and 2001 by allocating more resources. And competitive-intelligence departments received praise for making major strategic impact. Pfizer, for example, relied heavily on its competitive-intelligence team's data on Warner-Lambert's potential suitors. Based on that information, Pfizer managed to swoop in and take the Warner-Lambert deal away from a major competitor, giving Pfizer exclusive rights to the blockbuster cholesterol treatment Lipitor (atorvastatin).