NEW YORK, March 27, 2002 — In our rough-and-tumble economy, one-third of fast growth CEOs sees competitor information as more important than a year ago. And with good reason: those placing a premium on competitor information are outperforming their peers on sustained revenue growth, gross margins, and a number of other key performance measures. What’s most important to know about competitors? Changes in pricing, new product initiatives, and changes in corporate strategy top the list. These are highlights from PricewaterhouseCoopers’ latest “Trendsetter Barometer,” released today.
Thirty-one percent of fast-growth CEOs report that business information about major competitors is more important today than it was a year ago. Another 65 percent rate it as having equal importance, and only four percent say it is somewhat less important.
Moreover, virtually all fast-growth CEOs surveyed (84 percent) view competitor information as important to profit growth of their company, including 42 percent who see it as “very” or “critically” important, and another 42 percent for whom it is “somewhat” important.
“Our volatile economy has left businesses scrambling to neutralize or undermine whatever perceived advantages their competitors may have developed,” said Steve Hamm, managing partner of PricewaterhouseCoopers’ middle market advisory services. “Little wonder competitor intelligence is valued more highly today—and why so many are focusing on ferreting out information about new competitor initiatives.”
Tuning in on major competitors can make a big difference in business performance. Over the past 12 months, “Trendsetter” CEOs rating competitor information as very or critically important grew revenues by 14.2 percent, versus 11.8 percent for all others--a 20 percent faster rate. And, over the next 12 months, an even better outcome is expected. These same advocates of competitor information expect revenue growth of 16.9 percent, versus 13.3 percent for all others--a 27 percent faster rate.
“But companies that place high value on competitor information are doing more than just outgrowing their peers,” added Mr. Hamm. “Viewed separately, those rating competitor information as ‘very’ or ‘critically’ important are more dynamic than the other fast growth companies in several ways.” These include:
Gross margins: 42 percent have increased their margins over the past year, while 25 percent decreased them--for a net of 17 percent increasing. For all other businesses, 34 percent increased their margins; 26 percent decreased them--for a net of only eight percent increasing.
New hiring: 68 percent will be adding employees over the next 12 months, with only eight percent reducing their workforce--for a net of 60 percent increasing. They will be adding an average of 9.3 percent new employees, versus 6.7 percent for all other businesses--or 39 percent more net additions.
Capital spending: 44 percent expect to make major new investments of capital over the coming year, versus 37 percent of all other businesses--or seven points higher. Planned spending as a percent of revenue is, on average, six percent higher.
Strategic spending: Over the next 12 months, more increased investments are planned in three key areas: new product development, planned by 48 percent, 11 points higher than all other businesses; information technology, 45 percent, six points higher; and research & development, 30 percent, ten points higher.
“Companies that prize competitor information play a smothering defense,” said Mr. Hamm. “They are out to neutralize and outmaneuver their competition.”
Most Valuable Data
Three kinds of competitor information stand out as most valuable, cited by at least three-fifths of all “Trendsetter” CEOs. They include: changes in pricing (mentioned by 67 percent); new product initiatives (64 percent); and changes in corporate strategy (60 percent). Operating information is also of high importance for those rating competitor information “very” or “critically” important (65 percent).
|
|
| Importance
|
|
|
| Total
| Critical / Very
| Somewhat
| Not
Important
|
 | Changes in pricing,
both permanent and temporary
| 67%
| 79%
| 64%
| 46%
|
| New product initiatives
| 64%
| 72%
| 63%
| 48%
|
| Changes in corporate strategy
| 60%
| 73%
| 56%
| 33%
|
| Operating information
| 53%
| 65%
| 49%
| 35%
|
| Corporate financial information
| 32%
| 38%
| 32%
| 14%
|
| Changes in management or staffing
| 32%
| 39%
| 29%
| 19%
|
“The three most valuable types of competitor information are time sensitive,” noted Mr. Hamm. “With some advance notice, they can be used to shape a deflection or a counter approach.”
Sources of Information
Most “Trendsetter” companies (82 percent) rely on their field sales force for at least some of the competitor information they currently use. Searches of published sources and involvement in trade associations also rank high, cited by 76 percent and 75 percent, respectively. Information from former key employees of competitors (51 percent) and industry analysts (49 percent) are used by half these companies-- as is market research among customers of competitors (49 percent). Few seek information from public officials (only 11 percent).
|
|
| Importance
|
|
|
| Total
| Critical / Very
| Somewhat
| Not
Important
|
| Own field sales force
| 82%
| 87%
| 83%
| 68%
|
| Searches of published sources
| 76%
| 86%
| 75%
| 52%
|
| Trade associations and members
| 75%
| 79%
| 74%
| 67%
|
| Former employees of competitors
| 51%
| 54%
| 52%
| 38%
|
| Industry analysts
| 49%
| 57%
| 47%
| 32%
|
| Market research with
customers of competitors
| 49%
| 57%
| 45%
| 37%
|
| Public officials
| 11%
| 19%
| 6%
| 3%
|
“Collecting public competitor information should be the job of every employee, from the sales person in the field to the administrative staff, to management,” said Mr. Hamm. “CEOs need to understand their competitors nearly as well as their own operations.”
Use of Outside Contractors
A small number of fast growth CEOs (15 percent) employs one or more outside contractors or consultants to help collect competitive information. Even among those rating competitive business information highly, only 20 percent seek the help of outside contractors.
Where used, these outside resources typically provide about one-third (33.7 percent) of key information gathered… indicating that they play an important but complementary role.
“For those who cannot afford to leave anything to chance, an outside information consultant can add significant value,” noted Mr. Hamm.
PricewaterhouseCoopers' Trendsetter Barometer is developed and compiled with assistance from the opinion and economic research firm of
BSI Global Research, Inc.
PricewaterhouseCoopers (
www.pwcglobal.com) is the world's largest professional services organization. Drawing on the knowledge and skills of more than 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world.
If you have a question about this "Trendsetter Barometer" survey, please contact Pete Collins, survey director, at 646-394-4496, or e-mail to
pete.collins@us.pwcglobal.com
For more information about Barometer surveys, including recent economic trend data and topical issues, please visit our web site:
www.barometersurveys.com
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