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McDonell Corporation: What Is Unethical Competive Research?
Hank Jones, corporate director of marketing, was looking over requests
by the devisions for marketing research on competitors' activities.
Since the divisions overlapped on many competitors' industries,
there was some potential for ethical problems. The customer contracts
that the divisions were bidding on were worth several million dollars,
and Hank worried that the stakes were high enough (not to mention
commissions and bonuses) that the competitors might not be as ethical
as his company policy forced him to be. Some individuals or companies
might use some underhanded and unethical tactics to gain an edge.
Further, if the competitor had no differential advantage in its
procuct offering, it maight try to make it up with insider information.
Hans suspected that some competitors might even resort to eavesdropping
devices, such as tapped phones, monitored e-mail, diverted faxes,
chemicals that allow snoops to read mail right through the envelops,
and electronic bugs in the offfices. These were all things that
had to be checked for, but not tactics that Hank planned to employ.
Hank proceeded to make a list of potential tactics that he might
use to gather competitive research. His plan was to list as many
as he could think of, then go back and elininate those that might
be sonsidered unethical. Hank's list was as follows:
- Check competitors' annual reports, ...., and get copies of competitors'
public speeches.
- Consider asking competitors for information. Hank had read about
one company that would send out a team to a competitor's sales
office and honestly identify itself. Invariably, the competitor's
sales managers were so proud of their accomplishments, they would
give information freely.
- To get inside information on competitor costs, buy some of the
competitors' products and take them apart. Analyze them for component
material and processing methods, and then ask the suppliers of
those component materials to submit bids for the components.
- Hire a headhunting firm to interview key managers from competitor
firms (for a fabricated higher-paying job at an unidentified company
in the industry). The headhunter can report on pay levels, training,
competitors' values, proojects they have worked on, and standard
service behavior. Hank thought that he might someday hire one
or two, but he would have to be very careful since one might be
a spy.
- Hire a management consulting firm to gather information. The
firm would interview the competitor(s) under the guise of doing
an industry study in which the individual company's information
would be kept confidential, with the aggregate information to
be shared with all participants. Actually, the consultant's client
(Hank) will get the competitor's confidential information. Hank
made a note to remind himself to warn all his managers not to
participate in any outside research, especially if the researcher
identifies hinself or herself as a consultant, professor, or student.
- Ask his salespeople to indirectly encourage their customer buying
center contacts to talk about their competitors. Hank recalled
a story in which a company told its distributor the date they
were launching a new product nationwide. The distributor promptly
told the firm's competitor, with whom it also did business. The
advance notice allowed the competitor to be ready with its own
new product.
- Get a customer's buyer (or other member of the buying center)
to request a phony bid from a competitor and forward it to one
of his people. The competitor's bid proposal would probably contain
some valuable information.
- Analyze competitor's help wanted ads, among others. Annual reports
and 10K reports, help wanted ads, and others often originate from
a nonmarketing department that is not aware of what would be useful
information to competitors. ...
- Analyze reports on competitors' labor contracts. It can help
with backing into the labor part of their costs.
- Study aerial and satellite photographs of competitors' facilities
(if available).
- Obtain Freedom of Information Act information on anything the
competitor files with the government (this can be handled confidentially
by a "friend" that will act for the company).
- Consider having someone measure the frequency of trailer load
shipments from the competitors' plants an warehouse. ....
- Take a plant tour of the competitor's plant during an open-house.
...
- Buy competitor's garbage. Once dumped or assigned to a trash
company, the competitor gives up ownership. Most companies do
not realize that their office shreds little, and the production
specifies often go into the trash, even with identifying customer
part numbers.
- Infiltrate a competitor's business operations ..... check out
whether the night cleaning crew might have spies ....
- ... getting information from the customers
- ... hiring some computer science students ... to hack through
a competitor's extranet ...
- Perhaps this would be best handled by a professional information
broker ...
Kilde: Bingham et al.: Business Marketing. Written
by Dr. Roger Gomes and Dr. Patricia Knowles, Clemson University.
1999
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