Global Customer Management

Saku is a seasoned expert in market intelligence field, having provided clients with analysis and best practice consulting for 15 years. Saku previously worked as a management consultant at McKinsey & Company.

How CEOs Use Market Intelligence for Competitive Advantage in Global Markets

Business decisions cannot be made on a silo basis. CEOs and boards need 360-degree views of their market environment, but centralized market intelligence teams face many challenges in covering global markets from the corporate headquarters. What can CEOs do to ensure that the market intelligence they ultimately receive will cover the right strategic issues for their global markets and help them achieve greater competitive advantage?

From our work at GIA in advising clients on their market intelligence activities and networks, we have observed that many suffer from an “ivory tower” syndrome, being far removed from the action, so to speak. Most intelligence teams at head office lack close contacts and interaction with local decision makers, and often are unaware of the implicit, not just the explicit, consequences of their work due to local business politics. They may be ill equipped to take the local business context into account during analysis, and will typically lack access and understanding of local data sources available. It’s the perpetual “head office versus local office” problem.

This can be problematic for CEOs who need to equip themselves with an intelligence program that provides a variety of professional intelligence deliverables that show past, present and future market developments on all their markets effectively.

It is impossible for CEOs to be on top of all important issues in the marketplace and it is also not advisable to solely rely on the input that may be filtered and adjusted from business unit directors, regional or functional vice presidents etc. That information might be biased and not reflective of marketplace reality.

Personal tips for CEOs

CEOs are constantly bombarded with an avalanche of issues or requests for more resources from their vice presidents and country managers. It can be really difficult to immediately understand how to spend a company’s budget wisely. This is particularly true for newly appointed CEOs. 

What better support can a CEO get than unbiased market intelligence reports on key markets, key technologies, key opportunities and threats? In order to make effective decisions, CEOs need to make market intelligence a priority in their calendars.

Here is a typical scenario from a CEO we know, who runs a $15 billion professional services business.

At 5:45am every morning, the CEO receives an “Intelligence Briefing Report” on his smartphone, which covers selected global market highlights from the last 24 hours. When he gets to the office, he steps in to the office of the market intelligence director who sits next door to him, to see if there are some important issues to be discussed.

He is also constantly connected to the intelligence portal, which delivers tailor-made intelligence alerts to his tablet and smartphone, based on his current areas of interest. Alternatively, he can select from a wide variety of dashboards on the portal, to get updates on market share developments, competitors, customers, macro economic issues, technology development, etc.

At 3:00pm every Wednesday, the CEO receives a list of the latest field signals recorded on the intelligence portal by the company’s sales force, service people, account managers and others who interact directly or indirectly with customers, competitors and partners. He sees it as important that he gets these signals in a raw format from the field before they have been aggregated and summarized, in order to get the real picture – and before they make the press or become general knowledge in the industry. 

Between 9:00am to 10:00am every Friday, the CEO receives a CEO Intelligence Brief listing threats and opportunities for the company as a whole. This Brief is also presented in exactly the same format to country directors.

At monthly executive team meetings, the CEO, together with other international executives, start their discussions with an intelligence update of new trends, competitor movements, customer changes and other aspects related to the external business environment.

This CEO also participates in corporate war games on a regular basis, in order to evaluate potential moves by the competitors and then act as “the market” to provide feedback to the scenarios presented by various teams. Once a year, the company also conducts a megatrends and scenario analysis exercise in order to review the long term future outlook of the industry.

I think this looks rather comprehensive. So if you’re a CEO, would you not demand this level of support for yourself? It would surely improve your market awareness and make you a better decision maker.

How to view market intelligence for global markets

Market intelligence for global markets must be well coordinated and encompass the right strategic elements. They must be able to capture the local implications for global strategies.

CEOs need to ensure that their teams develop market intelligence programs that are well coordinated on a global as well as a local level; on a strategic as well as an operational level. They must demand that all strategic plans, product development projects and sales activities proposed to them be based on a solid foundation of facts that are well coordinated in their collation and analysis. This way, CEOs and boards will be able to make decisions that best reflect marketplace reality.

How this looks like in reality differs immensely from company to company. One company may choose to run their market intelligence program as one that is entirely outsourced by one inhouse coordinator, while others like IBM may have around 500 business analysts and intelligence professionals within the company.

CEOs also need a 360 degree understanding of their business environment. Market monitoring and analysis should not be conducted in isolated silos, where market research is reported independently of competitor intelligence or market development figures, for example. Analysis and recommendations must be presented in a structured way.

At Philips Healthcare, the company is structured such that the same unit is responsible for the market size and market share reporting, competitor analysis, general market intelligence and data mining or business intelligence. That way, they are able to integrate the analysis for decision-making. This is one, out of many other elements, that have enabled them to become the market leaders in 14 out of the 16 markets in which they are present.

The other important factor is taking into account local market environments. Even after conducting the necessary due diligence, we have seen how global companies can fail to penetrate emerging markets at the same time as their joint ventures with local partners fall apart. While many factors contribute to such failures, international companies are also often blindsided by the lack of in-depth local market intelligence.

A U.S. based client recently commented that they have learnt from past mistakes that companies cannot conduct market intelligence on Asian markets just sitting in their offices in Chicago or New York. American companies need to have the capability to collect local information directly from the marketplace.

One final recommendation is to ensure that the future oriented thinking is not limited to a homogenous group of people. One CEO from the energy and resources industry told us that they realized that their planning meetings had comprised of “white middle aged men who have each spent over 15 years at the company sitting together again and telling each other the same old stories over and over”. They thus set out to establish a “shadow cabinet” of younger up-and-coming male and female managers from all over the world, whose jobs were to do some “bold future thinking” and to identify new markets and new products where the company would make its profits in the next five, 10 or 20 years. They called the program “Pathfinder” as it was meant to help them find and create the path to the future.

Contact Saku Oikarinen via email info(at)globalintelligence.com or +358 10 613 2000.