These industries are interested to know where the disposable income resides by geography, occupation, age, income group and so on, so that they are better able to target their products, sales efforts and marketing campaigns.

Long term trends in demographics, income distribution, sector growth rates, regional growth rates, etc. are therefore of interest to them.

Going a step further, it is also interesting for them to know if there are temporary spikes (or drops) in disposable income. For instance, in India, the Sixth Pay Commission is a much discussed event, as it will lead to an increase in disposable income in the hands of the beneficiaries, the central government employees. Their pay scales have been revised with effect from 2006, and they expect receive the arrears in installments.  They are attractive prospects for the above industries.

Other events that have a similar impact on spending power are land acquisitions, either by the government for building roads, bridges, industry parks, etc. or by builders for developing large townships. The recipients in these cases are generally farmers.

Certain industries also get windfall gains once in a while, as a result of changes in exchange rates, commodity prices, government regulations, etc.

In agriculture, there are smaller spikes on a regular basis. The variability in agricultural incomes arises from variation in area under cultivations due to weather, prices, availability of inputs, etc.; or variations in yield due to irregular monsoon, outbreak of diseases, floods, etc.  Macro level performance of agriculture is often widely reported, but even in a “bad” year, there are small pockets of abundance. And these could be of interest to companies as they can target their sales efforts in the “right” areas rather than spreading them thin across the country.

Of course, not all of the above may be worth tracking. Organisations need to balance the impact of the event for its business, and the effort required for monitoring the event.  For instance, the weak rupee has delivered windfall gains to many, but it is perhaps not worthwhile trying to identify them as they are scattered, and hence hard to target.  Monitoring of regional patterns in agricultural incomes is possible, but could be a little bit painstaking as the information is dispersed.  Land acquisitions, on the other hand are limited in number,  impact concentrated groups of people, and are relatively easy to monitor.

What are other sources of spikes in disposable incomes you have noticed?

All new trends/ patterns/ macro changes in  technologies, society, economy, etc. start with small shifts in opinions or behaviors . Weak signals are these faint indications of macro changes that are poised to take place in future.

Weak signals are of tremendous value to competitive intelligence analysts, as they allow the analysts to anticipate what the future will be and hence caution the organization to proactively prepare for it. The company that recognizes the trend first, stands to gain advantage over its competitors.

Of course, it is hard to know whether a particular shift in behavior is a true signal of the future or just an random anomaly. Either way, a CI analyst cannot ignore a weak signal and may want to follow it till she can ascertain whether the change will die out or persist. If she does catch a major trend before everyone else, it could turn the fortunes of her organization. On the other hand, missing a trend could mean huge losses for the organization. Remember what Nirma did to HLL? And recently, what happened to Nokia?

So how can a CI analyst work to increase the chances of hitting this jackpot?

To start with, she must acknowledge the fact that it is possible to anticipate the future by looking for signals of change.  A successful trend-watcher must have a passion for it.  She needs to have her antennae up and eyes and ears open at all times, to minimize the chances of missing patterns and trends.

Additionally, she needs to monitor all the relevant places for picking up signals – such as blogs, news, magazines, publications, and other social media. It doesn’t hurt if she is open to surfing a few not-directly-relevant places too, as one sometimes finds clues in the most unexpected places. For long term trends, she will need to monitor demographic information, economy, political landscape and new technologies.

It is very important that she constantly communicate with people within and outside the industry – talk to industry experts, hang out with smart people, attend events and share information and insights with them. Particularly in India, with low internet penetration and low quantum of published data & information, there is absolutely no substitute for networking and socializing to pick up clues and views.

Finally and importantly, the analyst needs to have and open mind and be fearless in looking at all possibilities. Many  times organizations tend to ignore signals that threaten the current status quo or are uncomfortable for the organization!

“The future is already here, it’s just unequally distributed” – William Gibson

World  economies are so intricately interconnected today, that it is not possible to talk about the business climate in India in isolation. And most of the rest-of-the-world is not expected to do too well next year. A possible collapse of the Euro zone is a scary prospect, but it cannot be dismissed. The US is doing a little better, but not enough to bring cheer.  Even the emerging economies such as India and China are faltering, though less so, than the developed countries.  Uncertainties in one part of the world are propagated globally in form of market sentiment and this in turn affects the “real” economy.

In India, in addition to the economic slowdown and inflationary pressures, the political situation is contributing to the lowering of business sentiment. The policy inertia of the government and its inability to “manage” politics to push ahead with the reforms agenda is the single largest cause for low business and investor sentiment.  Politics has become more critical for Indian businesses than it has been in the last few years.

What does this mean for companies in India? First, they will have many more developments and areas to keep track of. Early warning competitive intelligence will therefore become increasingly important.

Second, they will have to work harder to maintain their top lines and bottom lines. And what does working harder mean? It means coming up with smarter and better (than the competitors) strategies for raising funds, selling their services, delivering at a lower cost, and so on.  Superior competitive intelligence is certainly one of the ingredients required for this.

Ensuring that there are enough resources for the increased level of CI that will be required, will be tricky, as companies are likely to go into a cost-cutting mode. Further, it is always harder to establish the ROI for early warning CI than for strategic CI.

CI practitioners will therefore have learn to do more with less. While items such as travel and conferences may find less place on their agendas than before given their budget constraints, they cannot afford to cut down on hardcore CI. They will need to work smarter, faster and produce better analysis than before. Since CI is a new discipline in India, they will need to move up the learning curve very fast. Luckily, the SCIP India Chapter has been formed in time to facilitate interaction and learning.

What do YOU think 2012 will bring for CI in India?

Strategy formulation (and planning) is undertaken at least once a year in most organizations; and more often than that in some organizations.  Strategies are devised for navigating obstacles and challenges to reach the desired business objectives/ goals. However, if the key obstacles and challenges are wrongly identified, how can the strategy hope to succeed?

Typically, organizations have a myriad of challenges… Competitors are coming up with new offerings in a market segment and we don’t have a competing product there. Certain geographies are growing faster than others. New technologies are emerging. The government is planning to tighten the regulations in the industry. Consumers preferences are changing. Production costs are rising. Labour problems are brewing. Two key executives in the marketing team have left. There could be many more…

But which of these are the critical ones that we need to focus on – to ensure that we meet our goals in the coming year? While all “weak” areas of business need to be addressed, business strategy needs to focus on the critical ones that will ensure success. Strategies that try to address all the areas are rarely successful as both, the focus and efforts are diffused. Management needs to pick the areas that will contribute the most to achieving company objectives.

If the diagnosis of critical areas is wrong, the organization will fail in achieving its objectives, irrespective of the strategy adopted.

This has significant implications for competitive intelligence (CI). Since the success of competitive intelligence is measured by the success of the strategies that are derived from the CI, ensuring that the diagnosis is accurate also becomes the responsibility of CI practitioners.  For example, the business expresses a “need” for benchmarking its pricing strategy vis-à-vis its competitors, as it is losing market share.  If the loss of market share is actually on account of better product design of the competing products, no amount of price adjustment will help sales.

CI practitioners then, cannot take the “problem statement” as given. They are duty bound  and it is in their own interest to ensure that the problem statement itself is relevant to the organization’s objectives. They need to be  involved in formulating the CI need.

What are your views on the boundaries of the competitive intelligence function?

Competitive intelligence is all about gaining competitive advantage (for your organization). For doing this, you have to be doing something different from what your competitors are doing.

You need to look for more and better intelligence than what is available to everyone else. What you can find on the internet and other secondary sources is also available to every other analyst in your  industry. Talking to (the right) people is the only way to get more than what everyone else has…

Besides, not all the inputs you need for decision-making  are found from secondary sources. This is true in under-documented sectors or unorganized industry segments, particularly in emerging markets like India. There is simply no data being collected on large areas of economic activity in India.

Deep insights on industry and customer dynamics are almost never found documented neatly on easily accessible web pages. When they are, they are generally outdated. Further, hearing it from the horse’s mouth has much more value than reading it in a report. Here is one example… You may read a report on a financial services company that tells you that its customer service is poor. On the other hand, a customer may tell you that “The people at the company’s office are very arrogant. They act like they are doing you a favour by giving you a loan.” The customer may go on and in the same breath tell you contrasting experiences with couple of the company’s competitors.  The latter certainly gives you more insight into what the customers experience on the ground.

Yet, I have seen that most competitive intelligence analysts shy away from reaching out and talking to people they don’t know. There are several reasons for this.  You feel diffident if you are approaching the wrong person for the information you need. Why will my competitor tell me anything about himself? He wont. But you can ask someone else, who knows the competitor intimately.

Another common reason is the fear of talking to strangers – what if they reject your approach? Making a stranger comfortable talking to you, is not easy for everyone. Some people naturally put others at ease and are able to chat with almost anyone. Others are not able to do this. But talking to strangers to collect competitive intelligence is not all art. You can learn how to do this, by systematically planning who to approach, and how to approach them.

So don’t miss the most valuable source of competitive intelligence… talking to strangers.