Can you think of any successful business sector where there is no competition, no need to understand the external environment, and worry-free profitability guaranteed for years to come?
Sadly, like unicorns, they simply don’t exist. In the most brutal ‘quick to market’ industries, like technology, you might be lucky to get a couple of months. In our industry, one can expect to hold a competitive advantage for a year or two at the most.
The fundamental truth is that one cannot set a strategy without considering the competition. Companies that remember this have a higher likelihood of achieving success than those that fail to consider the competition, or those that examine the competition but fail to generate the best insights for achieving success in the marketplace.
Competitive insights
We can illustrate the need for competitive ‘insights’ with a discussion of two major players in the immuno-oncology space. Merck Sharp & Dohme (MSD), the company that markets Keytruda, and Bristol-Myers Squibb (BMS), the company that markets Opdivo, approached development of their respective products in this area with starkly contrasting strategies.
Both medicines have revolutionised how we treat certain cancers, and both are a huge success. However, MSD went down a narrower clinical development path with detailed biomarker requirements that created hurdles for patient identification. BMS took a broader approach to patient identification that lowered hurdles for prescribers.
In the first few years after each product’s launch, it appeared that the BMS approach may lead to greater commercial success. However, MSD’s narrow patient screening approach eventually proved to be crucial in extending overall first-line survival in non-small-cell lung cancer patients.
This approach was developed in the context of having good competitor insights about the BMS strategy, and MSD found a greater degree of success as a result. The key here was not the correct identification of each competitor’s strategies, because each company knew what the other was doing to develop each respective therapeutic.
Rather it was the interpretation of each strategy and assessment of what impact each could have on successful development for new indications. A vital lesson learned from this example is that mere competitor information may be insufficient for developing a winning strategy. The right competitive ‘insights’ can be the most crucial element that companies need in order to achieve success.
Competitive intelligence professionals
Companies usually use one of two methods to assess and predict future actions of competitors. The first method is to employ an internal team of ‘competitive intelligence (CI) professionals’. The team can scour the secondary research space and perform limited primary intelligence gathering at medical conferences where open exchange of ideas and information is expected.
The second method is to employ a ‘CI agency’ that can either (a) perform a shorter-term deep dive analysis on the competition or (b) perform sustained longer-term monitoring – typically after the initial deep dive is completed. Both methods, when executed properly, can lead to successful analysis and prediction of one’s competitors in an industry.
However, a crucial question that each company needs to ask and answer itself is: “Which approach should my company employ, and how can we get the greatest value from our approach?” The key to success with the internal CI professional model seems to relate to staffing level, as well as corollary abilities to gain a seat at the table.
It is a reasonable expectation that subject matter experts (SMEs) with substantial industry experience will be more generally accepted by stakeholders as trustworthy in terms of their abilities to generate competitive intelligence insights. This in turn will allow such a team to influence its client’s thinking about relative competitive positioning.
Equally, companies staffing a CI function with less experienced employees may view the CI team more as information providers with a lower acceptance of their insights. In such a case, the stakeholders themselves are tasked with generating the insights, while the CI team is generally utilised for searching and reporting.
An issue that might arise in this scenario is the possibility that return on investment calculations do not fully justify the existence of such a team. Logic dictates that CI teams capable of generating the most powerful insights are perceived internally as having a better ROI, and therefore will be rewarded with a more stable environment and valued status, making the continuity of their work that much easier.
Competitive intelligence agencies
A second major component of competitor assessment is the utilisation of an external CI agency to assist with both secondary and primary CI gathering and analysis. Agency utilisation can vary from ad hoc project work to full-year monitoring that can be employed by essentially any and all companies, regardless of internal staffing expertise.
Agencies are generally the best approach for the generation of primary CI. More often than not, primary CI is collected by conducting interviews to discuss the general area of concern of each sponsoring client company.
A key difference between CI agencies and those engaged in market research (MR) includes (a) the absence of a scripted interview, (b) the lack of direct questioning to generate answers to key intelligence questions (KIQs) and (c) the lack of remuneration to participating interviewees.
It is not the intent of any company to pry into confidential areas around the competition, but at the same time, it is impossible to know up front which KIQs are trade secrets and which are within the public domain. The aim of such research is to cover the priorly determined KIQs as thoroughly as possible without inducing the interviewees to reveal any confidential information.
This can be achieved by discussing the general topic area as part of an interests-based conversation, directing the answers in a way that covers the KIQs without directly revealing what specific piece of information is sought after. Likewise, remuneration of an interviewee could be seen as an inducement and not allowed.
In addition to the ability of agencies to generate primary intelligence, they also are adept at secondary desk research, which can be useful to industry clients with insufficient bandwidth to cover an area of interest.
Combining the work of internal teams to cover some or all of the secondary research with agencies that can supplement secondary research with additional primary can be a powerful tool to holistically and comprehensively assess the competitive landscape.
There are a couple of additional factors that need to be considered when employing either or both approaches. Companies can employ the ‘need to know’ approach and the ‘trusted advisor’ approach.
Trusted advisors in general are SMEs that can perform internal research and/or work with agencies that can help maximise the available evidence and use the full spectrum of competitive information to generate insights, which is true CI. The ‘need to know’ approach generally refers to agencies and a more straightforward ‘give us the information’ approach.
Strategic decisions and insights
In the perfect model, a CI team of seasoned veteran SMEs is used internally. This team works hand-in- hand with agencies to maximise the generation of CI from a combination of primary and secondary research. The perfect CI team has a seat at the table where strategic decisions are made, and its insights about the competitors are valued in the context of internal strategies and the likelihood of success.
Perfect CI teams are trusted by their internal stakeholders more for their ability to interpret the situation and less for their ability to dig up information. The perfect CI team is a fully independent operation, with no ‘skin in the game’, in order to reduce bias to a minimum.
The influence of the perfect CI team rises to the highest levels within each organisation in order to ensure that its messages remain untainted in translation to decision-makers, including those in the C-suite. The author thanks Rachel Reichmann and Caroline Schaufelberger (Lifescience Dynamics) for assistance in drafting this article.