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How much can I really trust information in China? The honest and most helpful response we can give to this question is ‘not as much as you would like’. We must all get on with working with what we are given. Nothing short of a miracle will make China any less than one of the most challenging environments for information managers and researchers any time soon. We won’t go into the many reasons for this here but will try and help you find ways around the most serious of challenges. You must ensure you have strong interpretation of ALL information you see on China, from national GDP figures to your sales teams’ interpretations of a new competitor’s product offering. There is often more to any one simple fact then meets the eye. Once you get used to working in this slower but more thorough way, things become more manageable. There is little point bemoaning the lack of reliable information when you could be spending your time validating, triangulating and learning. How can I get my staff to report important news on markets and competitors to me? What’s an ‘insight’? Is your insight better or worse than someone else’s? What seems like a key ‘take away’ from a meeting with a new prospect in China may not strike your colleagues in the same way. We believe that culture has much to do with interpretation of information and intelligence in business and for multinationals operating in China and competing with Chinese companies, this presents a challenge. If you assume that everyone understands what you think is ‘important’ without spelling it out, you risk misunderstanding. Tried and tested communication methods are needed if you are to ensure that the output is reliable. Is it ethical to ask questions about my competitor’s strategy? Yes. There are numerous ways to increase your knowledge of competitor strategy using legal and ethical methods to obtain information. With a combination of strong internal practices in this area and external support, you can and should be asking and answering questions all the time. It’s a frenetic environment here, where Chinese companies make sea changes in their organizations very fast. These changes in strategy may appear to be less well researched and less sophisticated in some ways than we’re used to but the whims of the Chinese consumer and the B2B market changes demand this pace. How can I find out what private companies in China are doing? Naturally, getting information about listed companies in China is easier than getting information on private companies, as with any market but using a number of proprietary access commercial databases available in Chinese, it’s possible to collate basic information on a very large number of private Chinese companies including small and medium sized businesses. What’s the best way of predicting trends in a market that moves so fast? Constant information and intelligence gathering using both internal and external suppliers of intelligence is the right approach. It is laborious to set up this solid foundation and requires significant training of internal teams as well working on an extended basis with a trusted external consultant but the combination of these two allows you to remain ahead of any large changes with your markets and competitors and to avoid risk as much as possible in an emerging economy. Being able to prepare for pitfalls or changes in the business environment is much better than having to react to those changes and multinationals are often disadvantaged in China on this front anyway since they often have longer decision making processes than their Chinese counterparts. If I outsource market research, how much should I pay? Continuous support in this field is recommended and those projects are normally quoted on a retainer basis. For a project to assess your competition’s strengths and weaknesses or to understand end user preferences and your brand reputation, expect to pay between US$10-40,000 with a mid range provider and US$20,000-150,000 with a high end provider (depending on scope of the work). What should I watch out for when working with external partners? Your competitive intelligence or market research partner should be a local, China based company with strong experience in the market and a bi-cultural team involved at all stages of the project. If there is little evidence either of international or Chinese staff on the team, we believe the delivery will be weakened. Young staff in China are not necessarily a problem since many young people have senior positions in this market but track record is worth looking at and any research agency worth their salt should be happy to provide you with a reference list and case studies. Anyone can put together an impressive sounding client list but what did they do for those clients? Generally, if it sounds too good to be true, it probably is. If your intelligence provider promises to deliver a full suite of information on competitor pricing, they are either over-promising or are using less than ethical methods to find the information. Beware. Try to manage your own expectations on projects so as not to be disappointed. Intelligence providers are skilled, well trained professionals with a large number of tools and techniques at their disposal – they are not miracle workers! Your supplier should keep you updated throughout the project on progress and should have plenty of questions both at the beginning of the project and throughout about your business. After all, they should be trying to absorb as much information about you as possible before embarking on finding information for you. Do define your deliverables clearly. Do you want the full 50 slide PowerPoint presentation or would you rather have an excel matrix? Sometimes, the Excel competitor matrix is easier for you to get ongoing use out of than a report which gets files and is inaccessible to those in your company who should be using the information and updating it. What exactly is Competitive Intelligence? Competitive intelligence is the creation of insights that help make better business decisions. CI is not spying. It isn't necessary to use illegal or unethical methods in CI. In fact, doing so is a failure of CI, because almost everything decision makers need to know about the competitive environment can be discovered using legal, ethical means. The information that can't be found with research can be deduced with good analysis, which is just one of the ways CI adds value to an organization. Who’s actually using Competitive Intelligence? Competitive intelligence has been institutionalized in most large companies (97% of Fortune 500 as of 2008). Many companies have a CI department comprised of several analysts and collectors. From the first such function at Motorola, in 1982, the function spread to every major corporation in the US and, with a delay of 10 years, to Europe. Many Chinese companies also have competitive intelligence departments and there is significant government support in China for the development of these departments. What does a Competitive Intelligence department do? For many organizations, competitive intelligence (CI) is a relatively small function, funded and supported in varying degrees by other departments throughout the organization. CI can be located in many different parts of the business, but often operates either as a separate competitive intelligence department, or as part of marketing or market research. Most CI units support several types of business activities, use an assortment of competitive intelligence tools and techniques, and supply intelligence to multiple levels of management through a variety of competitive intelligence deliverables. What’s the best search engine to use for information on Chinese markets? Baidu is still by far the most popular search engine in China but Google offers a good alternative depending on what you need. For more information, see our China Research Toolkit What are some of the skills that I should look for when hiring a researcher or information manager position? Curiosity and interest in what makes people and organizations tick. Interpersonal skills are also essential. Where do I start filling the gaps our business has in its knowledge of competitors and customers and markets? This can seem overwhelming especially in an environment that’s changing as fast as China is. For a start, some people’s teams change more quickly than the competition does. Making sure that you have continuity of flow of the strategic information for the business is important and yet very hard to achieve. The first thing you need is a Research Plan. Most companies look at things in this order: Planning, Collection, Processing, Analysis, Dissemination. Where do I start filling the gaps our business has in its knowledge of competitors and customers and markets? How do I write a good research plan? Focusing on what decisions will come out of the research or need to be informed by it is a good start. Then, work backwards. If you’re not excited about the prospect of finding out the answers to the main questions, they probably aren’t the right questions. What are my outsourcing options and when should I use them? For getting started with a comprehensive base for strategic intelligence, using a 3rd party supplier is a good option since this initial gathering and ordering of intelligence is a big job and much of it is best done by those who can collate things quickly with a good eye for what’s important while your team get on with what they are good at. How do I measure ROI for this type of investment in information? Aha! The sixty thousand dollar question! Frankly, each company’s experience is different but the information you have at your finger tips should allow you to make decisions quickly and confidently without feeling as though there are too many unknowns and in China, that’s a challenge because we are dealing with an undeveloped information infrastructure and problems with information transparency. Management teams are strengthened by having improved evidence based decision making, quick and lasting competitive advantage, new angles on existing competitive situations and early warning of threats. Sales and Marketing teams are strengthened by being empowered with up to the minute information on competitor strengths and plans, being able to differentiate your product or service, strengthened client relationships, a targeted marketing strategy, tactical sales planning and more streamlined prospecting. If you do not see improvements in these areas, your information infrastructure needs improving. How would you ever go about getting information on Chinese companies when none of their reports are public and when they all have three different sets of accounts? One of the questions we really do get asked very frequently! Chinese companies do not behave in the same way as multinational companies. Many of the questions you would like to be answered are, firstly, unavailable and secondly, not the questions you should be asking anyway. Clients often ask us about the financial stability of key competitors, current product range and strategic three to five year plan. Actually, we are often more interested in telling them about the current supplier and customer relationships that the competitor has, the reputation of the competitor in the market and specific new investments proposed in the coming one year. This set of questions is just better suited to this market, as we have discovered from experience. How should we start collecting strategic intelligence? Internal employees are the most important primary sources of information. They have regular access to your customers and your potential customers and are regularly bidding for business alongside your key competitors. The first key is to ensure that you can rely on these internal teams to report back insights to management. Some of the ways we have found of doing this are:
The next thing is to employ the services, over an extended period, of an external information provider or competitive intelligence consultancy so that you can enhance and validate your internal information. This doesn’t have to cost a lot but it’s important to work with a supplier who understands your industry and who is prepared to spend time understanding your business in China. Remember, there is a delayed reaction in some industries. We do a great deal of bringing historical perspective to work in China. With a generation shift ever 3-4 years, some of your younger team members are not old enough to do this without an outside reminder. When people talk about analysis of information, what do they mean and how does it help me in my business? Competitor Analysis and SWOT are the most frequently used analysis methods. They give a framework to your information and help lead to decisions and action rather than information remaining as ‘nice to know’. In China, there is a particular benefit since it can help focus the attention of those younger team members who are often less used to dealing with strategic information. Which news aggregators provide Chinese language functions? You can read more about this in our Research Toolkit Where can I find industry experts in China? You can read more about this in our Research Toolkit |