I stumbled upon a fantastic excerpt from Ruth Stanat’s article "Global CI Blue Print" which was originally published in the Competitive Intelligence Magazine by the Society of Competitive Intelligence Professionals (SCIP). (Which reminds me I really need to update my membership. The CI magazine is very focused and always contains one or two gems that you can immediately explore in your own role).
Ruth has listed a series of pitfalls that researchers fall into in emerging markets, as well as their root causes. IT’s a great list and so I’m going to put my Asia CI hat on and add a few more examples of my own. What I found important to take away is that CI information sources should be viewed and assessed in the context of the market as a whole. Gauging biases, latency and accuracy is crucial in building up a cleaner, better market and competitor assessment.
|Pitfall||Root Cause||Some examples I’ve seen|
|Considering country homogeneous e.g. ignoring religious diversity||Religious diversity aside, age composition between Asian nations differs wildly – even in the developing markets.|
|Useless Fact-Finding Trips||Ineffective trips with little endings e.g. meetings in hotel, no exploration||Gee.. I’m going to look a bit bashful here. While no trip starts out with the intention of being useless – there is ample opportunity for this to occur. Definitely food for thought for an upcoming post!|
|Information at Face-Value||Differing data on competitor e.g. company has 3 sets of financial data||Always, always check the sources of your financial or market data. This is even more critical when you consider the bias that might be involved. For example country statistics gathered by Governments. Not all government organizations or institutions are driven by accuracy.
Accounting practices differ wildly between Asian nations. Be very aware of taxation, capital gains and the way profits are managed.
|Market Overestimation||Overly optimistic projections e.g. product’s adoption rate||This is a hobby horse of mine. Over and underestimation aside, look at who is gathering the data, how they gather it and how many people they have gathering this information. In the Technology sector the number of Analysts that various research firms have in-country differs wildly.|
|Dated Research||Market intelligence at one time e.g. ignoring new economic factors||Getting out to users within Asia can be difficult. Phone interviews often wont be effective (lots of people on mobiles, rather than land lines) and face-to-face is time consuming. For this reason studies can often be a static point in time once a year, or once every two years. In your market, how quickly does the landscape change?|
|Myopic CI Focus||Focusing only on competition e.g. neglecting political environment||I’m guilty of this one in particular. The coup in Thailand in 2006 shut down government spending (and consumer confidence) for a couple of quarters. This effected all Tech companies, not just the one that I worked for at the time.|
|And now a couple of my own..|
|Pitfall||Root Cause||Some examples I’ve seen|
|Differing Maturity Rates||Thinking that each emerging market will grow or behave like one another||A slight spin on Ruth’s pitfall on demographics but a little more skewed for technology companies. Asian nations develop at differing paces and because of differing reasons. Indonesia’s wild growth is as much to do with consumer spending and stable government as it is to do with under penetration. But Indonesia’s growth is much different in scope and pace to the way Thailand or Vietnam is emerging.|
|Who is the real decision maker?||Thinking that the end-user or the “usual suspect” is the key decision maker.||Particularly in larger enterprise technology deals, Partners play a huge part in who is successful in a bid. In addition, cronyism is rife in several nations making a purchasing decision a very complex roadmap. Often the best product or solution is not the one picked. Don’t just rely on the strength of your products and services.|
|Public Holidays||Thinking that you will have a lot of time to do things or that business will operate to the same schedule as Europe or North America.||At Chinese New Year, China, Taiwan, Hong Kong and Singapore shut down for anywhere from three days to a week. Muslim majority countries have Ramadan festivities and so on. The number of times I’ve talked to people in non-Asian countries that they wont get any work done out of China for two whole weeks of the year (Golden Week) amazes me.|
|Questionable Ethics||Believing that research and CI providers are operating to worldwide norms.||Be vary aware that the same ethical laws and obligations do not bind smaller operators here. You expose yourself and your company to ethical or public relations disasters so be careful and diligent how you select and manage local research providers.|
|Focusing only on known competitors||Taking the belief that your competitors will be the same ones you go up against in your traditional market.||Smaller companies that offer unique language, process or price points can often steal market share and revenue away while you’re focusing on your traditional competitors.|