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72 PART 2 • STRATEGY FORMULATION

TABLE 3-9 Key Questions About Competitors
1. What are the major competitors’ strengths?
2. What are the major competitors’ weaknesses?
3. What are the major competitors’ objectives and strategies?
4. How will the major competitors most likely respond to current economic, social, cultural, demographic,
environmental, political, governmental, legal, technological, and competitive trends affecting our industry?
5. How vulnerable are the major competitors to our alternative company strategies?
6. How vulnerable are our alternative strategies to successful counterattack by our major competitors?
7. How are our products or services positioned relative to major competitors?
8. To what extent are new firms entering and old firms leaving this industry?
9. What key factors have resulted in our present competitive position in this industry?
10. How have the sales and profit rankings of major competitors in the industry changed over recent years?
Why have these rankings changed that way?
11. What is the nature of supplier and distributor relationships in this industry?
12. To what extent could substitute products or services be a threat to competitors in this industry?

3. Whether it’s broke or not, fix it—make it better; not just products, but the whole
company, if necessary.
4. Innovate or evaporate; particularly in technology-driven businesses, nothing quite
recedes like success.
5. Acquisition is essential to growth; the most successful purchases are in niches that
add a technology or a related market.
6. People make a difference; tired of hearing it? Too bad.
7. There is no substitute for quality and no greater threat than failing to be cost-
competitive on a global basis. 6

Competitive Intelligence Programs

What is competitive intelligence? Competitive intelligence (CI), as formally defined by the
Society of Competitive Intelligence Professionals (SCIP), is a systematic and ethical
process for gathering and analyzing information about the competition’s activities and
general business trends to further a business’s own goals (SCIP Web site).
Good competitive intelligence in business, as in the military, is one of the keys to
success. The more information and knowledge a firm can obtain about its competitors, the
more likely it is that it can formulate and implement effective strategies. Major competi-
tors’ weaknesses can represent external opportunities; major competitors’ strengths may
represent key threats.
In April 2009, Starwood Hotels & Resorts Worldwide sued Hilton Hotels Corp. for
allegedly stealing more than 100,000 confidential electronic and paper documents
containing “Starwood’s most competitively sensitive information.” The complaint
alleges that two Starwood executives, Ross Klein and Amar Lalvani, resigned from
Starwood to join Hilton and took this information with them. The legal complaint says,
“This is the clearest imaginable case of corporate espionage, theft of trade secrets, unfair
competition and computer fraud.” In addition to monetary awards, Starwood is seeking
to force Hilton to cancel the rollout of the Denizen hotel chain. Hilton is owned by
Blackstone Group.
Hiring top executives from rival firms is also a way companies obtain competitive
intelligence. Just two days after Facebook’s COO, Owen Van Natta, left the company in
2009, he accepted the CEO job at MySpace, replacing then CEO and cofounder Chris
DeWolfe. Van Natta had previously also been Facebook’s COO, chief revenue officer, and
vice president of operations. The MySpace appointment now pits CEO Van Natta against
his old boss at Facebook, CEO Mark Zuckerberg. Facebook passed MySpace in visitors
worldwide in 2008 and is closing in on leadership in the United States. Both firms are
fierce rivals in the Internet social-networking business. 7