Opinion Section
91
Available for free online at https://ojs.hh.se/
Journal of Intelligence Studies in Business Vol 4, No 2 (2014) 91-111
Competitive Intelligence in the Defense Industry: A Perspective from Israel – A Case study analysis Avner Barnea1 1
Ono Academic College, Israel
[email protected]
Received November 28, accepted December 26 2014
ABSTRACT: Purpose - The defense industry is one of the leading business sectors in Israel and also worldwide. Competitive Intelligence (hereafter CI) is embedded into this sector and supports its decision making process. In recent years more information about this industry and about the CI activity is available while characterized by fierce competition and quick changes in the competitive environment. It is evident that CI is used widely by the leading firms in this sector while it has become an integral part of the business activity, and its added value seems to be significant. It is possible to define a framework of CI activity in this industry and to reflect on its advantages and limitations. It is my hope that this paper will encourage further research on this topic. Methodology/approach – Gathering information that has been published in Israel and abroad that was analyzed and thus offers insight into this issue. Findings – The defense industry in general and especially in Israel is using CI intensively in the highly competitive environment of defense products to support the decision making process. Research limitations – For many years, the information on this sector was not
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available. It is in now in a process of change and this enables us to build up a comprehensive picture. Practical implications – This study can make a contribution to global corporations competing in highly dynamic sectors, especially those that are operating in the governmental sectors. Originality/ value – This is the first work in Israel on the use of CI in the defense sector. Paper type: A case study analysis.
KEYWORDS: Competitive intelligence, Marketing intelligence, defense industry, Israel
Introduction
slight increase compared to 2008, which
The defense industry was one of the fastest
amounted to defense exports at $ 6.3
growing business fields in Israel (2010). In
billion, an increase of 7%. The Israeli
recent years and especially since the mid
defense exports 2010 results are indicating
1990's, defense export became one of
that they have reached to $7.2 billion in
Israel's leading export sectors, with high
2010
profitability and stable growth. Israel was
(http://www.globes.co.il/news/article.aspx?di
considered world wide as one of the
d=1000654713). It should be noted that
leading countries in the field of defense
defense exports is one of the few areas that
exports. According to national data on
have been hurt less during the global
arms exporters in 2007, Israel was in
economic slowdown that began at 2008
fourth place, with sales of $4.4 billion
(http://www.israelwtc.co.il, http://www.pr-
after
inside.com/research-and-markets-israel-
USA;
Russia
and
France
(http://www.sipri.org/yearbook/2009/07/ 07B). According to recent estimations
defence-and-r2131715.htm). The
heart
of
the
Israeli
defense
Israel's global share on the arms exports in
companies was its advanced technology.
2009
Its
has
reached
to
14%
comparative
advantage
was
(http://jdw.janes.com/public/jdw/index.s
technological excellence. Israeli solutions
html). In 2010 the overall spending of
were often considered to be highly
worldwide governments on defense has
innovative and better than other solutions
reached to $1.7 trillion while the US is
by
responsible to 45% of it. Israel's defense
hundreds of millions of dollars a year in
exports in 2009 amounted was $ 6.75
research and development intended to
billion, which is 16% of total Israeli
maintain
exports
2009
Israeli defense products and technologies
is
were considered to be most advanced,
in
(http://www.israelwtc.co.il).
This
a
the
competitors.
this
Investment
of
advantage.
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93
multi-disciplinary and often long ahead of
especially in Israel and to see how
the technology used in the civil market.
beneficial it was for the process of
The primary source of Israel's relative
decision-making in this field. Referring to
advantage in this industry was the needs
this issue was possible through studying
for the most advanced products set by the
the performance of Israel's defense firms
Israeli military systems, especially by the
in foreign markets, mainly in recent years.
IDF (Israel Defense Forces). On the other hand, one of the most important goals of
Characteristics of the sector of
Israel's economy is to increase its exports
defense industries
as its economy relied heavily on export of most advanced technological products. A distinct advantage of Israeli defense
Here are the characteristics of the defense industries' markets;
products is the fact that they usually have gained a variety of combat experiences by the
IDF,
which
increased
their
attractiveness in the eyes of its customers (http://www.businessmonitor.com/defence /israel.html). Although there were security limitations on defense exports to avoid leakage of secrets that could damage the state security, Israel authorized a wide range of defense products for be exported. (Dvir & Tishler, 1998). As Competitive Intelligence (hereafter, CI) became recognized, and its value was more acknowledged in recent years, its direction went towards gaining strategic intelligence (Montgomery and Weinberg, 1979). Fulfilling CI became part of the many firms' capabilities (Porter, 1980). Qualified CI functions have been playing growing role by Israeli firms in this sector to become more competitive. The purpose of this paper is to assess the value of CI to the defense industry,
1. Defense equipment purchasing is determinated by states based on their assessments of military threats and on the allocations to defense budgets, usually affected by economic parameters. 2. This market was characterized by intense competition, while the leading companies were based mainly in the US, UK, France and Germany. Although 2010 has seen changes in these markets while US shifted its priorities, China's global rise while threats in Europe have been much reduced, the competition was still fierce. 3. The targets of the sales were usually government organizations, mainly the military and the defense establishments which have high quality demands and
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were anticipating for highly
customers
and
potential
sophisticated solutions.
customers, usually state military
4. Usually, the sales were resulted of
and security organizations and
winning tenders. These wins have
also for competitors, which often
far been reaching financial and
were the ones you have shared
strategic significance, as often it
with them in the past and possible
would be leading to extended
candidates for cooperation again
business relations, including later
in the future. Hence, defense
upgrading of the systems and
industries are also characterized
expanding sales of existing
by intense competition and also by
systems.
cooperation between the rival
5. Defense export process was
companies
characterized by high entry
opetition).
(known
as
co-
barriers to be able to develop advanced products that have
The turning point in the Israeli defense
undergone a long process of field
exports' industry was in 1993 after major
experience in complex situations
political developments in the Middle East:
and have been proved their
the agreement between Israel and the
effectiveness.
Palestinian
Authority and
agreement
signed
6. Defense export procedures were
with
the
peace
Jordan
that
generally long-term processes,
changed the strategic position of Israel and
from raising the initial demand,
enhanced Israel's rapid economic growth
responsiveness, getting security
while the export was its leading strength.
clearance, selecting the winner,
As
the start of procurement,
transformation in the external forces
implementation and execution of
influenced intensively on this industry
systems and acquisition returns.
while the demand to fulfill CI needs was
7. Defense
exports
were
characterized by the participation of huge corporations with high complexity of demands that often required ad hock cooperation with other companies to increase the chances of winning tenders. That implied that these companies also required a double vision - both for
we
can
see
evidently growing.
in
Table
1,
the
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95
Table 1: Impact of external forces No. 1
External forces Technological
Before 1993
After 1993
Moving towards more
Developed new
advanced technologies
capabilities and
in response primarily
advanced
to the local needs
technological products to answer global needs and compete successfully with leading world corporations
2
Political
Mainly influenced by
Enhanced an
internal politics
international strategy
among government
by aiming towards
and military
identifying the needs of foreign customers.
3
Economic
Supplied mainly local
Moved towards global
military needs
markets with distinctive pricing structure
4
Industry competition
Low exposure to
Intense competition in
global competition.
global markets
Low competition in the local market 4
Key CI needs
Monitoring local
Monitoring capturing
needs of the military
of global needs of
establishment
numerous military establishments
Characteristics
of
Competitive
Intelligence in the defense industries
firms in aerospace and defense found that, by using CI, three companies obtained outstanding results. The study showed that
A survey conducted in the USA (Prior,
the industry average:
2009) compared 152 companies actively involved in CI with 1,396 in the same 19
1. Bid success rate was 18 per cent,
industries. A benchmarking study of 24
but the top three won 87 per cent,
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96
75 per cent, and 57 per cent
and Schoemaker 2006). They actually
respectively;
acted by applying 'informed anticipation'
2. Return for every dollar spent on
approach (see Day 1997) to systematically
proposals was US$78, but the top
identify in advance changes in the needs
three averaged US$225.
and in the markets and to respond by build comprehensive
understanding
of
the
The evolution of CI in Israel was behind
technological trends that shape the future
the progress achieved in the US and other
and make their assessment available to
western countries (Prescott, 1999). One of
their management.
the main reasons for this inferiority was the over- confidence of Israeli executives
Here are some distinctive features of CI in the Israeli defense industry:
claimed to have captured the essence of intelligence while in their military service
1. CI activity was perceived as it can
and implemented it within the business
significantly increase the chances
field with no need to develop dedicated CI
of winning tenders and producing
capabilities. This has been changed in the
competitive
last ten years (Barnea 2004).
Kahaner 1996). One of the results
advantage
(see
By its nature, CI in defense industries
was wide CI awareness among
was more strategically oriented, then
executives and members of staff in
tactical. The issues CI often covered were
this sector.
more long term defense trends and indepth
competitors
and
customers
assessments. Its customers were the top
2. Defense export companies tend to allocate significant resources to develop in- house CI capabilities.
management, (but also sales teams and
3. CI activities in this area were
technological teams) and its analysis
characterized by the need to
methods were advanced to meet the
monitor comprehensive range of
expectations of senior executives.
many frequent changes in the
The fierce competition described above
competition
map
with
large
brings the companies engaged in defense
quantities of information. It was
exports to develop strong CI units that
considered more as a strategic tool
make the best use of CI discipline for
rather as a tactical tool by
competitive benchmarking. (McGonagle
providing
& Vella, 1996). Companies engage in this
(general discussion on the value of
sector,
CI see in Prescott and Gibbons,
unlike
many
other
sectors
(Attaway, 1998), recognize the need for professional peripheral vision (see Day
1993).
important
insights
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97
4. The key intelligence topics (KIT's)
entering into new business sectors
of CI units in this industry were
close to their core business, as
mainly
homeland security.
the
requirements,
intentions and plans of countries
8. Durable relying on the gathering
and defense establishments to
capabilities
improve their military capabilities
information by the sales force
by purchase defense products and
teams (contrary to what we know
competitors' activity aiming to
in other industries, Lambert, 1990)
beat the others. Special attention
that were also benefited from the
was
CI analysis capabilities. Sale force
given
to
technological
and
become
sharing
an
of
innovations. The price issue was a
has
important
significant factor in decisions
gathering tool and efforts are
regarding winning tenders.
conducted to improve their CI
5. Strong macroeconomic analysis
capabilities (the conceptual issue
capabilities were implemented to
is discussed in Moncrief and
understand long-term trends and
Marshal, 2005).
to be able to assist in solutions to
9. CI functions usually were holding
strategic planning needs.
highly the interrelations between
6. The development of early warning capabilities identification
that
help of
them and the various business
early
units and expected to provide
business
added
opportunities and threats from
value
to
the
decision
making process.
existing and new players. These allowed better monitoring and
It is likely to infer as shown in Table 2,
enhance for understanding (for
that
further discussion see Gilad 2004).
conformed to the changes in the activity of
7. Assistance by external research companies to get updates through initial
definition
intelligence
needs
of
key
and
also
initiating specific research needs like assessing firms that were potential targets for acquisition or for partnership or considering
this
the
progress
sector
intelligence:
of
supplied
CI
practices
added
value
Opinion Section
98
Table 2: Changes in Israeli CI activities No. 1
CI activities CI model
Before 1993
After 1993
Process of slow
CI dedicated
developing formal CI
capabilities became
and infrequently use
formal
CI task forces 2
CI unit location
Mainly in HQ slightly
In HQ (corporate
spread in business
level) and also in
units
business units
3
CI area focus
Domestic
Global
4
CI topics
Narrow: to cover
Broad: to cover world
mainly local
competition covers
competition, usually
tactical and strategic
tactical information
issues
Little
Moderately becoming
5
Support by IT dedicated tools
intensive 6
Extent of analysis
Limited
Moderate
7
Extent of use of out sourcing
Limited
Broad, mainly for gathering through Open Source Intelligence (OSINT)
8
CI support to the selling process
Not considerable
Critical as the buying processes and the marketplace became more complex.
Practical implementation of
including the use of advanced information
Competitive Intelligence
technological systems (see discussion of the use of these tools in Israel in Barnea,
Usually the professional level of CI units
2009). This was the outcome as of the
among defense export companies was
need to cover a wide range of information
considered to be high ranked at the top,
sources, regular updates of the decision-
comparing to similar units in other sectors
makers and being involved in countless
by the total resources invested in them
activities, including assessments of the state of competition. These units often
Opinion Section
99
make use of forecasting tools of the
primary sources and translated it all into
business environment being characterized
formulating an answer would have an
by
planning
advantage and increase the chance to win
processes (for further discussion on the
defense tenders. We could assume that a
challenges of business forecasting see
British company in the defense industry
Laseter,
will monitor the difficulties of British
monitoring
long-term
Lichtendahl
and
Grushka-
Cockayne, 2010 and Courtney, 2001).
soldiers fighting in Afghanistan, for
An important part in responsibilities of
example, in the early detection of enemy
CI units was early identification of
snipers and will initiate the British
business opportunities. The purpose was to
Defense Ministry to propose a solution,
find opportunities while still in the initial
even if the bureaucratic procedure of
stage at the prospect, preferably in the
issuing a tender yet not started or
stage of shaping the requirements, to be
completed. This information may come
able to prepare a response ahead of the
from a variety of sources, including social
competitors.
networks, publications of the Department
Although CI in defense
industries
of Defense, blogs of soldiers participating
enjoyed high awareness to the importance
in the war, interviews with soldiers who
of CI by many executives in the firm, still
have returned from the battlefield in local
the implementation of the discipline of
newspapers, publications of the Islamic
"sharing of information" had to be
organizations active in Afghanistan and
enhanced. The obstacles were not just the
more.
nature of people but also the security aspects which were not to be ignored. Still
Key Intelligence Topics in the
the need to share more competitive
defense industries
information existed. Defense industries are not alone. Lovello and Sibony (2010) were referring to the problematic culture of many organizations that withhold to share information
and
practically
were
strengthening the "silo thinking" while CI was often aiming towards avoiding these behaviors.
translate
the
competitive
information received from Open Source Intelligence
Monitoring and assessing of military threats encountered by clients or potential clients such as defense organizations and defense forces
are critical to early
identification of business opportunities. For example, the threats that were faced
Accepted estimate was that anyone who could
1. Military threats
(OSINT)
combined
with
by Indian troops on the border with Pakistan were different than the threats faced by the Spanish intelligence and
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security organizations fighting against the
intelligence on customer needs and rising
Basque resistance ETA. Being aware of
opportunities
military
to
throughout all stages of the competition.
characterizing the operational needs and
An important tool was the company's
the requirements specific tools, which will
employees who were in continuous touch
reduce the threat or cancel it altogether.
with their customers. They should be
Comprehension of the progress of the
briefed also to collect information on
operational needs by the customers or
current and future marketing needs. For
future customers were critical factors
example – prior knowledge of budgetary
expected to be addressed by CI units.
limitations of potential customer, which
threats
often
led
later
and
support
decisions
was familiar to just a few, ended in 2. Technological Intelligence
submission of a competitive proposal that
Technological intelligence continuously
brought this into account.
monitors technological solutions offered by competitors in response to customers' needs as early as possible. The aim was to understand
the
existing
and
future
4. Strategic Intelligence Strategic
intelligence
was
the
intelligence required to assess long-term
products that would compete in the
processes
marketplace in the future. It was required
players and the marketplace. That was,
to implement the discipline of Competitive
which direction facing the operational
Technology Intelligence (CTI). One aspect
requirements of the countries and armies,
of this issue was the need of the CI units to
the extent of investments in R & D by
build strong internal collaborations with
competitors over the coming
technological professionals to estimate
estimates of
precisely the current and future markets.
competitors beyond their core business
One of the challenges was determining the
areas, their intentions to enter into new
right priorities of the technological issues
areas, whether by self-development or
that have to be monitored at any given
through acquisitions, mergers and strategic
time.
partners. For example, it was reasonable to estimate
3. Marketing Intelligence
and
that
intentions
by
various
years,
new directions by the
the
world's
leading
companies in defense were following with
While technological intelligence was
great interest after the business moves of
targeting competitors' capabilities, the
their Israeli competitor Elbit Systems,
focus in marketing intelligence was on the
which in recent years entered into new
customers. Marketing focuses on gathering
areas of activity mostly through mergers
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and acquisitions and not by organic
above in order to maximize their chances
development and would try to assess
to win.
Elbit's strategy in the coming years
CI in this industry was actually in its
(http://www.accessmylibrary.com/coms2/s
strongest
ummary_0286-28619791_ITM).
intelligence, according with the outline
Sometimes these strategic reports (for
that was described in the white paper by
example
Arthur D. Little consultancy (2010).
see
BAE
Systems
position
of
managing
the
http://www.baesystems.com/ProductsServi ces/bae_prod_eis_global_analysis.html)
Working programs
are distributed to clients (policymakers and intelligence officers) to help them to understand opportunities
the in
threats, the
risks
CI functions usually fit into the annual
and
programs of the Israeli defense companies.
international
The main task of the intelligence was to
environment.
respond to the intelligence requirements according with these plans. For example, a
5. Tactical Intelligence
company decided to focus on the defense
Tactical intelligence was considered to
market of the Far East which until recently
be less critical in this sector, but it was still
was ranked low in its priorities list. Its CI
done on day- to- day basis: monitoring
unit was expected to provide information
changes in the markets, customer insights,
about competitors' activities in the above
changes among competitors and new
mentioned region, the customer's needs by
products (see discussion on tactical and
defense establishments and states, to point
strategical CI in Sawka 2010). This
towards new competitions (tenders) and to
intelligence often had an added value for
identify
the strategic intelligence.
between companies that may give a joined
early
strategic
partnerships
response to the customer's needs and so In conclusion of this chapter - some people may think mistakenly that CI in defense
industries
was
about
price
on. It was assumed that it was impossible to develop
a
strategy
of
winning
discovery offered by competing tenders. It
competitions without setting up an orderly
was usually impossible to obtain this
Key
information in advance and companies
executed by the intelligence unit. It was
competing in this area were required to
also likely that the CI functions may build
expand their intelligence scoop as outlined
quickly intelligence capabilities that would
Intelligence Topics (KIT's)
list
meet the needs of the firms and thus
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102
increase their chances of winning. Action
time a single unit at a certain company
plans
cooperated with another company while
were
expected
to
summarize
priorities in collaboration with
their
another business unit within that firm
business units. CI units expected to work
competed against it in another sector. This
closely with the company's executives to
modus operandi allowed skilled benefits of
bring on to their attention the new
the primary sources among the company
opportunities as a result of the intelligence
employees, especially among the skilled
monitoring.
sales force and technological staff that
The uniqueness of CI activities in the
having been working at relationships with
sector of defense was the ability to act
various elements in the market. Primary
simultaneously
several
areas
of
sources were also intensive users of CI
mentioned
above,
in
materials and their professional expertise
markets which were characterized by
was playing a role in obtain important
tough competition and often insignificant
information
differences
by
competitors and opportunities, and shared
competitors. Therefore, it was necessary
it with CI professionals and other users.
for finest understanding of customer
Thus capable internal networks within the
needs, markets and capabilities of
firm, supported by dedicated software
competitors to know how to produce
often enable CI managers effectively to
intelligence
as
in
in
products
offered
competitive advantage that would help
on
customers,
products,
manage it.
in pointing at the competitive price which was often a determining factor in the final decision who wins the competition.
Secondary sources What
characterizes
the
activity of
secondary sources in this industry was the challenge of utilizing enormous amounts of
information
gathered
on
military
Sources of information and
equipment needs, marketing intelligence,
managing the gathering efforts
new technologies etc. The defense market
Primary sources
was characterized by a lot of open source information on one hand and on the other
The defense export market was often
hand, keeping secrets tight. This required
characterized by ad hoc collaborations
high quality information management and
between companies and simultaneously
precise direction of collection efforts,
fierce competition known as co - opetion.
selection and analysis and distribution to
Therefore, it is possible that at the same
the appropriate units. Usually it was hard
Opinion Section
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to expect to handle information without
Complexities
of
strategic
the assistance of dedicated information
technological issues in the exports' defense
systems (see Barnea 2009).
industries
enhanced
the
and
need
for
qualitative analysis, including frequent use
Managing the intelligencer efforts
of
forecasts
and
assessments
methodologies, formulated the overall This competitive market required constant
quality intelligence into the
development of new information sources
making process. For example, analysis of
while keeping the existing sources. This
information about competitor's activity
was a result of the need to cover new
indicated
technological solutions, new geographical
development of an advanced generation of
regions and countries that were not in
technological
focus in the past, new products, etc. At the
previous generation was relatively new.
same time, there were sources that become
Further thorough examination revealed
obsolete as a result of changing priorities
that the existing solution did not meet the
and focus in other lines of businesses.
needs of the state acquired it so that
Therefore, it was necessary to conduct an
competitor needed to present a suitable
advanced system for managing Key
solution soon. This analysis also elevated
Intelligence Topics (KIT's) and the targets
business
of gathering ( firms, armies, military
attractive
establishment, etc.), including answers to
customer, a solution that proved itself but
the needs: who was the firm initiating the
was not purchased in the past by that state
request (asking for the information), who
in respect of the high price.
in the organization could provide the
that
it
moved
solution,
opportunity offer
to
decision
into
although
resulted the
in
fast
the
an
disappointed
This industry was often characterized by
answers, monitoring and access to the
intense
answers received at any given time and
economies, internal politics, international
information collected in response to avoid
relations, social changes, and a good
duplication and ensure optimal use of
understanding of legal and regulation
resources by the firm. By implementing
issues. This was in addition to common
the above, the CI functions were moving
analysis of competitors, customer, supplies
from occasional management of its KIT's
and monitoring of new technologies and
to a systematic direction.
advanced applications.
Production of quality analysis
macro
analysis
of
foreign
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104
(Customer Relations Management) and
Using internal information systems
ERP
(Enterprise
Resource
Planning),
CI units in the field of defense understood
where important information was analyzed
that one of the keys for their added value
in
was on one side to give access to many
information. For example, an army of a
people in the organization to competitive
certain country issued an immediate RFP
information and on the other hand to make
(Request For Proposals). It was required to
many in the
to
know all "our" existing and potential
information obtained, to evaluate the
capabilities to know if and how a reply
significance and bring it to the attention of
could be provided. Further assessments
others
organization.
revealed that the date of the development
Advanced information systems were a
of essential parts of the required system
critical support tool for the success of
was two years therefore it was impossible
competitive intelligence processes but the
to give an answer to that RFP. Its
primary challenge was to develop the
submission date was in six months and
awareness among the employees.
placing the system was within a year.
organization relate
in
the
conjunction
with
competitive
These systems usually divided into two types:
Key success factors (KSF's) for CI function
1. Systems
2.
developed
by
the
companies themselves often via
Defining KSF’s (Key Success Factors) for
their information technology units
a CI unit is important in any industry
Purchased
(Singh, Fuld and Beurschgens, 2008). It
solutions
in
which
adjustments were implemented so
seems that the defense industry has
that they can give the answers
implemented these KSF’s more than other
expected of them.
sectors:
The direction was to acquire and later
1. Organizational culture – It is
adjust systems from the external software
basically the development and the
houses because solutions were often
implementation of broad CI
cheaper and enable internal information
awareness by policy of sharing of
systems units to focus on their core areas.
information, streaming from both
One of the challenges is to require of
sides – from the CI to the internal
systems that interface with other systems
clients and from them to the CI
within the organization, such as CRM
function.
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2. Procedures - Mainly internal
intelligence cycle and by an easy
procedures guaranteeing the two-
access to the intelligence products
sided flow of information from
to those who need it.
external and internal sources and making intelligence available to
The outcome using this methodology
those who need it to accomplish
was that decision making without the
their assignments.
contribution of CI was incomplete. These
3. Support by IT technology –
three essentials were together critical for
Meaning the use of expert tools
the success of CI function in a corporation.
for
They all had to be interrelated as shown in
complex
demands
of
information attention, for the full
Figure 1.
Figure 1: KSF's
Organizational culture
Procedures Expert tools
Conditions to obtain needed information
partners and decision makers. It was getting more complicated to acquire
The following figure (see Figure 2) has
information about R&D planning and
been prepared based on assumptions made
strategic planning while the most difficult
by CI managers in the Israeli defense field.
was to get information which could
It was looking towards two parameters –
directly support to win tenders. The
one- the extent of the difficulties in
difficulties of maximizing the value of the
acquiring valuable information. The other
information were similar to those to obtain
one was the importance of the information
information.
received to significant decisions by the
function strived to cover these topics, it
firm. As we can see from this figure, it
was aspiring to obtain more valuable
was relatively easy to receive information
information
about customers, competitors, suppliers,
Although
(on
new
a
typical
CI
technologies,
Opinion Section
106
strategic planning, and tenders) which was
harder to accomplish.
Figure 2: Challenges of acquiring valuable information
Hard to get Tenders New technologies Strategic information
Customers Partners
Competitors
Suppliers
Decision makers
Easy to get Insignificant information
Valuable information
Summarizing so far shows:
one of the key success factors of CI in this
CI units operated in the heart of the
sector.
business activity in the Israeli defense
The complex challenges for CI were
sector were involved in the decision
imposing on the structure of t CI in this
making process. Although there were
field. The results were often a combined
often significant gaps of the information
CI activity in the corporate level which
required,
give
actually directed the CI efforts while the
assessments that could bridge the lack of
business units have focused CI activity to
focused information. This was done by
answer their specific and often immediate
successful
needs.
CI was
expected
involvement
to
of
many
employees in the organization into the intelligence
process,
beyond
the
immediate scope of the CI unit. There was a good implementation of the discipline of "Sharing of Information" (internally), as
Opinion Section
107
Decision making process by the
country. I.e. – the allocations to air
customer
force against the needs approved to the armored forces.
I have already pointed towards the
3. Hidden operational needs - What
importance of intimate knowledge of the
were additional needs that went
customers (including potential customers),
beyond those that have already
as a key success factor of firms operating
formally
in the defense sector.
additional components embedded
The following Key Intelligence Topics
in the proposal could give a
(KIT's) were guiding the intelligence
competitive edge.
efforts:
defined,
like
what
4. Special conditions and limitations -
Certain
limitations
and
1. Knowing your customer - A close
conditions that were expected to
and an intimate knowledge was a
be part of the over whole deal like
must in order to be able to make
the
insightful decisions regarding the
manufacturing, collaboration with
solutions offered and to be able to
local contractors etc.
need
to
involve
local
reply precisely to the implicit and
5. Knowing the decision makers –
explicit needs of the customer.
Who were taking part in the
Interpreting
decision
it
to
actionable
making
process
intelligence was the challenge of
especially in the final stage of the
CI in defense firms. This was
decision about the winner in the
probably impossible without a
competition.
cross- organization strategy by the
including influencers, approvers,
CI function. Growing number of
users and buyers (see Barnea
firms in this sector admitted that
2006).
there was no win in a competition
ongoing search for information
without valuable contribution of
that could be used to increase our
CI.
chances to win.
Key
Obviously
personalities
there
was
2. Customer's budget limitations -
6. Past experience with the customer
Estimating the over whole budget
- It was highly important to know
allocated for a defense project.
the past of our relations with the
This
customers
was
included
also
in
and
possibly
their
assessing the priorities inside the
relations with our competitors.
defense
Has this customer fulfilled his
establishment
in
that
Opinion Section
108
obligations? How the customer
executives in
this sector considered CI
treated his partners. His suppliers.
functions as follows:
Was that customer paying in time according with the agreements? History
of
artificial
obstacles
1. CI
functions
had
excellent
of
firms
understanding
created for unjustifiable reasons?
intelligence needs (or the specific
Sometimes
this
business units' needs) and were
information, there was a need to
centering their efforts to provide
look at the experience of various
competitive
sections in "our" company as
information.
customers contacts
to
may that
obtain
have are
lots
of
2. CI functions were integrated into
unknown
the up to date priorities and had
internally to others. 7. Relations
advantage
been given resources that enabled
between
Israel
and
them to fulfill their missions.
foreign countries – These relations
3. There was an ongoing effort to
had an immediate impact on the
assure that CI capabilities were
decision of the regulators whether
matched to the scope of their
to approve export of defense
KIT's
products to certain countries in
accordance
extreme
plans.
cases
when
it
was
assessed that it could harm the
and
were
executed
with
the
in
working
4. The value of the CI was assessed
security of Israel. I.e. – Israel was
continuously
exporting to Turkey for many
executives
years as part of the close relations
contribution.
by to
the
senior
maximize
its
between the two states. When
5. The resources allocated to CI had
these relations have been hurt, it
to be measured to make sure that
affected also on the volume of
shortage of resources will not hurt
export defense goods.
its activity.
Observations by senior executives of the
Conclusions
role of competitive intelligence The recent global economic downturn My continuous CI consulting with Israeli
since 2008 had only minor effect on
corporations
this sector.
The number of military
conflicts
is
indicates
that
senior
in
increase
Opinion Section
109
(http://www.globalsecurity.org/militar y/world/war/index.html) moderate
rise
in
global
and
position in the strategic decisions a
defense
making process. Many business defense issues could
expenditures is expected to continue in
not
be
met
effectively
and
the coming years jointly with the
accomplished
increase of the competition on each
implementation. In this sector's activity
governmental customer. Israeli firms
in Israel, CI considered an integral part
in the defense sector enjoy a high
of the organizational structure and its
reputation by their competitors and
business culture. Still there was a
customers for their CI professionalism.
tendency to keep the CI capabilities'
Not very much has been written about
secret, but this was in a swift change as
the role of CI functions inside defense
it became evident that strong CI
companies and their effectiveness in
capabilities were common in this
the fierce competition in this sector
sector worldwide as in many other
(see an example in the Journal of
competitive areas.
without
CI
Competitive Intelligence Management, Vol.2, No. 4 2004), either worldwide
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