Consider the findings of a McKinsey study that asked executives how their firms
responded either to a significant price change by a competitor or to a significant
innovation by a competitor:
A majority of executives in both groups [across regions and industries] say their companies found out about the [significant] competitive move too late to respond before it hit
the market (McKinsey 2008).
Let us look at it from a more positive angle. CI does provide value, even though virtually all evidence of the value and impact of CI is, to date anecdotal or deal with indirect assessments. Here are a few of the key ones that should help you feel better:
• In the early 1990s, a study of the packaged food, telecommunications and pharmaceutical industries reported that organizations that engaged in high levels of CI activity show 37% higher levels of product quality, which is, in turn associated with a 68% increase in business performance (Jaworski and Wee 1993).
• In the mid 1990s, NutraSweet’s CEO valued its CI at $50 million (about $72 million in 2010 dollars). That figure was based on a combination of revenues gained and revenues which were ‘‘not lost’’ to competitive activity (Flynn 1994).
• A more recent PricewaterhouseCoopers’ study of ‘‘fast growth’’ CEOs reported
that ‘‘virtually all fast growth CEOs surveyed (84%) view competitor information as important to profit growth of their company’’ (PricewaterhouseCoopers 2002).