24
Indications and Warning Analysis

Short Description

Indications and warning (I&W) analysis is a premonitory technique for regularly and systematically tracking key assumptions about the task environment and rivals into the future in order to alert decision makers when the situation changes in a potentially significant and risky way. To anticipate and prevent potentially significant hostile marketplace movements or surprises, I&W analysts try to connect clues gleaned from what could be massive quantities of complex and evolving data. Done well, I&W analysis acts as an alarm to decision makers and reduces the incidence of surprise, uncertainty, and risk. I&W also alerts decision makers to developments that run counter to their planning assumptions and provides them with a critical understanding of the situation in time to take needed actions or precautions.

Background

Traditional I&W methodology has been used for decades by military organizations to determine whether activities by a potential enemy require a heightened state of alert or readiness. Over time, the methodology evolved whereby events that precipitated aggressive behavior were recorded after an enemy had attacked. These events were then studied to develop models to help decision makers understand the specific conditions for a possible attack.¹

During the Cold War era, both sides of the conflict (NATO and the Warsaw Pact nations) designed systems to alert them of impending aggression by their rivals. This indicator-based approach required intelligence agencies to perform careful and detailed analysis of all actions taken by their rivals and required a determination of the actions that needed to be taken or would likely be taken, in order for one side to move from their current position to an attack mode. The analysis also included constructing a list of a possible rival's actions, determining which actions could be effectively observed or monitored, weighing and prioritizing the actions, and determining a course of action for one's own side based on the indicator being set.

The lessons learned by decision makers during the Cold War have not been entirely lost on firms. Many firms today have systematic methods for monitoring their environment, including the macro-environment, as well as their competitive segments.²

These "monitoring" systems are outgrowths of the environmental scanning and tracking systems that became popular in the 1960s, as firms recognized that the broader environment was becoming a more critical part of the business landscape and that it could make or break their fortunes. Whether the importance came from pressures delivered by key stakeholders, unique events, or from seemingly inexorable trends, firms knew that they required better systems to alert them about environmental developments and then integrate them into their strategy development processes.

A very important facet of the environmental monitoring, tracking, and subsequent analysis process is the development and implementation of an indicator and warning analysis system. In developing I&W analysis processes or systems, many commercial firms relied on adapting systems that were standard early warning and risk management practices applied by the intelligence communities at the nation-state level.³ The public sector I&W analysis practices essentially try to warn the appropriate and relevant government decision makers of impending threats of various natures, whether it be breakdowns in other countries socio-political changes, terrorist activity, pending military actions or critical policy-related developments.

Although I&W analysis initially had more of a premonitory focus, in recent years, its focus has been more on serving defensive purposes. In particular, countries are using the method to warn them of terrorist activities and pending attacks, intrusions into critical digital networks, and how to counter these activities. There are analogies to this more embryonic activity to firms, who can also apply it for counter-intelligence and crisis-response activities.

We believe that competitive firms—particularly those operating across dynamic markets that include uniquely motivated and capable rivals (both current and potential) and a multi-national scope—require a similar system.

However, when it comes to applying this military developed application to commerce, the key issues are less easily defined and more ambiguous. In business and competitive analysis, we often talk about persistent market-related problems rather than impending events, and it's often difficult to identify the specific decision maker that has to be warned. Also there are many instances where a firm can't eliminate or stop a problem; consequently, the analyst must instead focus on dealing with the consequences of a rival's activity. The question for business and competitive analysts is more focused on how to develop a usable methodology in this area that can assist in the refinement of their assessments and provide more robust forecasts. This is where I&W analysis becomes an essential and beneficial technique for an analyst.

Strategic Rationale and Implications

Firms must be prepared to fight and win in the modern marketplace. This is characterized by large numbers of highly capable competitors using a full range of conventional marketing tactics, as well as employing advanced systems along their value chains. In an era of just-in-time processes, shorter product life cycles, fragmented and maturing global markets, thinner profit margins, and intensified competition, time becomes an increasingly important source of competitive advantage. Many firms who recognize this employ time-based competitive strategies.⁴ Time-based competitive strategies require firms to strategically use the time dimension related to customers and competitors to improve their relative performance in response time, cycle time, on-time delivery, time to market, just-in-time inventory, and real-time decision making, among others.

The nature (that is, intensity, density, speed, and sometimes even finality) of these marketplace battles makes "quick response" decision making even more difficult at a time when customer-facing employees and managers require more effective direction in order to exploit fleeting market opportunities as well as their rivals' vulnerabilities. Analysts and their systems must be able to provide decision makers with information concerning their rivals, the nature of the threats, the broader STEEP environment,⁵ and the effects of each on the accomplishment of the firm's mission. I&W analysis is a method that ensures uniformity in the analysis of rivals and the environment, and the evaluation of the effects of each on their degree of threat, as well as potential collaborative courses of action.

Firms need to shift their focus from the traditional, slow-moving, logical, mature competitive arenas to a new competitive worldview. Many firms lack an I&W capability focusing primarily on the new types of threats that are emerging in global markets. Rivals can still operate "below the radar" in different countries or markets before larger, higher market share competitors realize what is happening. Executives remain concerned over the lack of warning capabilities on market destabilizing events, including new product introductions, major marketing changes, or announcements of key strategic relationships.⁶ It is essential that a methodology for studying these preconditions and precipitants of the emerging threats be established.

If a firm's business and competitive strategy must factor in change of a type and speed that has not been seen before, then an analyst's assessments that underpin the developed strategy have got to be equally dynamic. Firms therefore need to have business and competitive analysis systems that can scan and monitor the environment, continually updating the assessments that are put forward to clients. These systems should also help to identify emerging issues in areas that will be of concern to the firm in the future, including those areas that may not be currently in its scope.

A strategic view that includes I&W analysis helps decision makers to be proactive as opposed to simply reactive. It is too easy for firms to be overwhelmed by the unrelenting pace or pressure of events; consequently, it's only while being proactive that firms will have opportunities to stay ahead of rivals. Astute analysts should be producing analytical outputs and assessments that can support proactive marketplace strategies, as opposed to simply defensive or threat-reactive ones.⁷

Strengths and Advantages

I&W analysis forces analysts and decision makers to mutually set business and competitive analysis priorities. This helps firms to overcome the problem of having competitive intelligence staff seeking out "busy work" in the absence of direction or customers' demands and the situation where decision makers ask to "get me everything you can about somebody or something," which can waste the firm's resources.

I&W analysis can reduce the waste of intelligence resources—and save money and scarce time, particularly in the data collection side of the larger business and competitive intelligence process. Data collection, in supporting I&W analysis, is clearly focused on gathering reliable information that can provide a timely and cost-effective warning. The significance of information is predetermined from discussions between analysts and decision makers, thus facilitating the recognition of significant change. If the changes are such that they show that the firm and marketplace are moving in directions notified in an assessment, or that they are moving away from it, or at a different speed, that information can either be used to update the assessment or a warning generated. Many of these changes occur in cycles, requiring analysts and information gatherers to continually feed data into the process, updating assessments, refining warnings, and continually adding to the value that they give decision makers.

Combined with other related environmental scanning or tracking systems, I&W analysis can constitute a powerful set of techniques that will assist strategic competitive analysis units to produce dynamic assessments. I&W analysis should provide insight as a basis for action by strategic decision makers. It should also help analysts to avoid developing "interesting" yet mostly unimportant information for their own sake, but rather, intelligence that is of immediate and beneficial use to decision makers in determining and managing business unit or firm strategies.

I&W analysis also helps to establish a proactive mindset in both analysts and decision making. It gives the firm a better understanding of the current and potential changes that are taking place in the environment and should challenge the "current" wisdom by bringing fresh viewpoints into the decision-making mechanism.

The ultimate value of I&W analysis lies in both the content of the analytical output, as well as the process used to generate it. At the "product level," the outputs of environmental analysis generally consist of descriptions of changes that are currently taking place, indicators of potential changes in the future, and alternative descriptions of future changes (the scenario type aspect). At the "process level," involving decision makers and analysts in determining data-gathering priorities helps to enhance the competitive and competitor learning atmosphere and mindset that many experts claim is increasingly needed today.⁸

Weaknesses and Limitations

Despite the recognition that I&W can serve an important purpose, studies of I&W systems in governmental and military organizations through the years have displayed a disturbing theme. There are a number of recurring problems found in I&W analysis. These impediments include, but may not be limited to, the following:⁹

• Inadequate recognition by firms of emerging threats, particularly those of low probability but potential great danger—examples of disruption in industries and the frequent inability of market share leaders to properly address them are plentiful.
• A consequent inadequate collection against such threats—many firms still lack the processes and systems for maintaining 365 x 24 x 7 data and information gathering, and tracking capabilities, even for the critical areas of operations, customers, competitors, or global events.
• Breakdown of information and communication flows between the various parties assigned tasks in the intelligence and planning process—this can occur particularly among those individuals responsible for gathering important data/information, analysts, and decision makers.
• Failure by analysts to fully understand rivals and their intentions from the rivals' viewpoints, and removing the built-in biases affecting both analysts and data collectors that impede reaching their objective.
• Failure by decision makers to heed or give legitimacy to analysts or the minority views.
• Overwhelmed analysts, analytical systems, and an appreciable lack of proper resources and time to address anomaly indicators in scenarios.
• Vulnerability to red herrings, deception, and other Trojan horses used by rivals.

It is a complicated task to interpret events or trends that will manifest themselves in some difficult-to-discern ways in the future. This uncertainty may help gain executive commitment to use and sustain I&W analysis, particularly if the predictions for a designated time horizon are not known. Conservative mindsets of either the analyst or decision maker can also weaken the effectiveness of I&W analysis.¹⁰ There is also the risk that decision makers might act too slowly on warnings or that the I&W analyst has provided poor judgments.

I&W analysis is more important in some industries than others. I&W will be highly beneficial in fast-developing industries with high degrees of change. In industries that are mature, exhibit substantially less change, or grow very slowly, there will be less need for I&W analysis.

The huge growth in data and information available on the Web and open sources has been both beneficial and problematic for I&W analysis. The additional data provided through the Web and open sources can potentially contain indicators of competitive rivals' activity or adverse events. The problem with this source of data is that the vast majority of the information captured will be noise as opposed to signals. Being able to distinguish between strong and weak signals, signals and noise, and knowing what thresholds should trigger warnings is difficult to build into automated systems (applications or solutions), and very few commercial firms have acquired the ability to perform this valuable filtering task with consistently high degrees of success.

Effective I&W systems can take many years to develop and to become effective; they often require trial and error, and it helps to test I&W analysis and recommendations in simulations and scenarios to understand the likelihood that they can effectively predict future actions. The most effective I&W analyses are supported by communication and information systems designed to capture and disseminate potential indicators, which most commercial firms have yet to install and institutionalize.

In terms of implementing the technique, it is generally thought that it is more beneficial for analysts to help form a group of executives who have an ongoing interaction with I&W processes. This is, however, often not possible in smaller firms or those that are geographically distant. Unfortunately, experience suggests that most firms have not done a good job at connecting I&W participation with appropriate recognition/rewards, thereby rendering it less effective.

Process for Applying the Technique

There is a presumption of surprise as well as incomplete intelligence underlying I&W analysis that needs to be understood before a firm can initiate the process. These presumptions require you to be involved in what can be exhaustive research in order to build a defensible case underlying the issuance of a specific warning.¹¹ You need to develop intimate understandings of your rivals, resources, structure, history, capabilities, motivations, culture, blind spots, and biases, among other things. Some of these are easier to understand than others, making the I&W analysis process a more difficult task for analysts.

We recommend following these four basic steps for performing I&W analysis. They include establishing the set of indicators, establishing meaning behind the indicators, validating and ranking the indicators, and determining alternative courses of action.

Step 1: Establish the Set of Indicators

You should collaboratively work with all the decision makers to identify specific actions or events that might potentially signal a strategic attack by a marketplace rival. This step assumes that the decision maker can accurately identify their rivals. For this task, it is beneficial for you and decision makers to collaborate and achieve consensus on an appropriate definition of rivals. This definition must take into account the vision, mission, strategy, scope, and competitive goals of the firm.

Indicators will consist of data or information pointing to those actions or events by rivals that are thought to potentially be a risk to the focal firm and its ability to successfully achieve its marketplace goals. Indicators are signs or suggestions that certain key things may unfold. They are not guarantees that something will happen but are conceptually linked through examination of past significant marketplace actions by rivals.¹² Warnings, which are the eventual manifestations of relationships among the indicators in I&W analysis, are similarly suggestions, hypotheses, or beliefs that some events will transpire.

More specifically, indicators are factors, events (or lack of events), or actions that present a significant clue about the nature of present circumstances and suggests an eventual end result of a series of events. They are measurable, observable, and collectible and signal progression toward a significant competitive action by a rival. Observations of these actions, events, or factors are described as "indications," and information systems should be established to capture them and communicate that a "trigger" has been pulled to analysts and decision makers. Some common indicators that a business and competitive analyst might uncover include those displayed in the following list:

• Filing of shareholder lawsuits
• Wall Street analysts' expectations of a merger candidate's profitability
• Public statements by public officials about a potential firm action
• Rumblings of union dissatisfaction shown in "'sick outs"' and potential strike action
• Increase in insider shareholding transactions
• Sudden and unexpected departures of key executives
• Suddenly increasing "'help wanted"' ads in specific mission-critical activity areas
• Unusual investments in similarly positioned early stage ventures
• Aggressive and unusual asset sales
• Noticeably stepped-up lobbying activity in state or national capitals

Because there is a difference between expectations (indications or warnings) and reality, it is important that you and decision makers come to a realistic shared understanding of the process, its limitations, and its ability to deliver beneficial outcomes. You need to be able to share warnings about actions that may not be popular or desirable to the decision maker, and it is important that you retain your objectivity even in light of the possibility of having to deliver either unpopular or inaccurate predictions.

One of the best means for performing this identification process is to study the past actions of competitors in the marketplace. These actions need to be classified, sequenced, and studied for understanding. The actions may not have all unfolded in linear or logical fashion, creating a need for the analyst to employ different sets of tools to understand the patterns. These tools can include, among other things, performing event and timeline analysis (see Chapter 21, "Event and Timeline Analysis"), decision and event trees, trend analyses, pattern mapping, weighted rankings, probability trees, and other problem-solving techniques.

The historiographical analysis methods (see Chapter 25, "Historiographical Analysis") can also be particularly useful in this task. For example, you can use historiographical analysis as one of the means for answering I&W-related questions, such as the following:

• Did the rival signal a major marketplace battle by first introducing a new product in a particular geographic region?
• Did the rival start a prior battle by systematically lowering prices across a product line shortly before a new introduction?
• Did the rival begin the last set of aggressive actions after a particular event (for example, after a bad quarter or having just replaced a key top executive)?
• Did the rival line up its distribution channel by creating excess capacity before quickly filling it with product?

The key for you performing this step is to determine the pattern of activity that rivals use that signals a major offensive by them in the marketplace and to capture the patterns in the form of indications. At the conclusion of this step, you should have determined a set of indications for the particular rival. Comprehensive I&W systems require the development of these indicators for all rivals, both current and potential.

Step 2: Establish Meaning Behind Indicators

You must consider the following in order to generate insight about the indicators and what they portend for the firm. This "player-oriented intelligence" is tailored for use within I&W analysis. We build upon a concept borrowed from a common formula in criminal analysis, which looks at how criminals might choose and act upon targets. The five areas we suggest the analysis consider include analyzing the rival's motivation, opportunity, capabilities, method, and imminence. Each of these areas is discussed in turn next.

Motivation. It is important for you to try to determine what the rival is hoping to achieve or accomplish by acting or not acting as the indicator portends. Does the rival see a temporary gap in meeting customer's needs in the marketplace? Is it trying to shore up a weak business or product line? Is it trying to achieve some additional cash flow to finance a future expansion? Has it picked a particular point in time to act because it recognizes seasonality or an anomaly in market demand trends that it believes it can exploit?

This is always a tricky facet of the process since predicting rival's intentions requires an intimate understanding of the rival. More often than not, you need to isolate your own biases as well as those of your firm so that you do not color your insights or understanding of the rival. Additionally, you cannot achieve this intimate understanding solely on the basis of collecting, organizing, and synthesizing data. You must literally be able to put yourself in the shoes of the rival. Fortunately, several of the techniques described in other parts of this book can assist you in this task, particularly shadowing (see Chapter 13, "Shadowing"), and war gaming (see Chapter 23, "War Gaming").

Opportunity. In addition to understanding a rival's motivation, trying to gauge what opportunity it is truly aiming to achieve becomes important. It is beneficial for you to determine the actual size of the opportunity the rival seeks to achieve. If it is successful, what would be the increase in sales it expects to achieve and the loss in sales the analyst's firm may experience? How will the "bottom-line" impact be to the rival and the focal firm? How will the rival's success in exploiting the opportunity impact long-term customer perceptions of the marketplace and competitors? Does this indicator suggest some cross-market (multi-point competitive) impacts that make it larger in scope or scale than it represents on the surface?

There is usually a close positive correlation between the opportunity and the rival's likely course of action. The larger the opportunity represented by the indicator is to the rival, the more likely the rival can be expected to fiercely compete for it.

Capabilities. You should try to determine whether the rival has the resources and capabilities to achieve its aims. Using business and competitive analysis tools like functional capabilities and resources analysis, competitor analysis, value chain analysis,¹³ and benchmarking (see Chapter 11, "Benchmarking") can help you get to the core of this question.

Determining the rival's capability also means determining who the rival is allying with to accomplish its objectives. You should aim to determine, among other things, the following: Who else is involved? Is this being done only by one party (the rival), or is it being assisted by other collaborators? Does this indicate new strategic relationships that need to be monitored or actively addressed? If it indicates long-standing relationships, what might that indicate about how the action will roll out in the marketplace?¹⁴

Method. This requires you to understand the range and scope of the rival's action. It usually helps to first determine whether the action indicated is strategic, tactical, or operational in nature. You can also determine which of the marketing levers are being pulled to achieve it—starting with a consideration of the "4Ps" of pricing, place, promotion, and product. Consideration should also be given to some of the generic forms of offensive movement, such as the following:¹⁵

• Offering equally good or better products for a lower price.
• Leapfrogging all industry rivals to the next generation of product or technology.
• Attacking a competitive vulnerability or weakness of your firm.
• Purposefully attacking or destabilizing segments of the market in which your firm achieves a high proportion of its profits or its fastest growth prospects.
• Using hit and run tactics to quickly take market share or sales from your firm while it is distracted by other events.
• Maneuvering around rivals and focusing on segments of the marketplace that have yet to be contested or have been overlooked.
• Learning from the tactics and successes of other firms and applying them to its offerings.
• Launching a preemptive strike to gain an advantageous position in the marketplace that will discourage or prevent your firm from moving toward.

Imminence. The last key concept for generating meaning is to determine how soon the indicated event might take place. This will require you to consider what other activities or events need to occur before the attack is launched, how much time is needed to launch the attack, how much time is required for the focal firm to prepare its response; and when the consequences of the rival's actions and the focal firm's reactions be manifest in the marketplace and show up in the firm's strategic and financial performance. Obviously, the closer these answers are to the present time, the sooner you will need to accelerate processes so as to give as much advance notice as possible to the decision makers in order that the decisions can be made quickly and actions taken to address the rivals.

Additionally, most marketplace actions that have long-term competitive impacts tend to follow a normal progression, a dynamics of escalation that looks remarkably similar to the life-cycle concepts we have discussed. This concept suggests that there are early, middle, and late stages of any marketplace battles. The most valuable indicators appear early in the roll-out of a market attack, and it is during this stage that analysts must be most vigilant in order to provide their decision makers as much lead time as possible. By the time the rival has rolled out the actual action, the damage is mostly done, and all the firm can do is to try and fire-fight or "crisis manage" the consequences. This result usually means less maneuvering room or discretion for decision makers, a situation the analysts should do their best to help their clients avoid.

Step 3: Validate and Rank Indicators Against Threshold Levels to Determine When Warnings Need to Be Issued

For I&W analysis, it is desirable that, based on the information available, a prediction (the warning) be produced that: (1) indicates the possible causes of the observed information and ranks those causes in order of confidence that they could be a cause; (2) based on those indications, predicts other observable mechanisms and consequences associated with those causes; and (3) provides the means to warn decision makers and other individuals in the firm who will be affected of the actions and potential consequences prior to those consequences being manifested.

It must be remembered that a significant number of indicators are ordinarily required to be present before the I&W system produces a warning. A few events, such as small pricing changes, an increase in hiring, or increasing truck traffic at a distribution center, though possibly important once brought together in the bigger scheme of things, would not necessarily trigger a warning.

As such, there are a number of questions that you must consider in validating the series of indicators you have identified:

• Can you trust the indicator?
• Is it a signal of a pending event or noise (that is, useless information, or even potentially worse, disinformation meant to confuse the analyst and competing organizations so as not to disclose a rival's true intentions)?
• Who (that is, the source of the data or information underlying the indicator) observed the indicator or communicated of its existence? Are these people trustworthy sources?
• Did their observation of the indicators come under stressed or natural circumstances?

It is beneficial that you qualify the indication as being on a continuum ranging from high reliability to low/no reliability. The indications also need to be scored in terms of their imminence, or how quickly the ensuring events might result in significant actions by the competitor. If the pattern or series of indicators are both reliable and imminent, then you may consider issuing a warning to decision makers. You should always remember that there needs to be a high-quality standard for warnings in order to gain and keep the trust and confidence of the decision makers. As such, you need to avoid the "Chicken Little" situation in which warnings are issued for any and every rival action, thereby diminishing the decision maker's will to respond and act, and the firm's readiness to address truly significant concerns as opposed to minor or insignificant ones.

Once a warning is issued, it is provided to decision makers as an estimate of a rival's ability to win a marketplace battle at the given time. This information, coupled with additional data, should allow the decision maker to make informed decisions about the rival's intentions. If the decision maker agrees that the warning of the rival's intentions is valid, they can then take the necessary steps to address the situation before it unfolds in the ways you have suggested.

Step 4: Determine and Recommend Appropriate Firm Responses to the Warning

You should not consider your tasks completed upon the issuance of the warning. Although this will mark the completion of a particular I&W analysis task, it does not end your responsibilities to help the decision makers understand what options are available for the firm so as to maximize the firm's performance in light of the warned-about situation.

You can alert decision makers to the analyzed facts, to their competitive consequences, as well as a potential series of alternative actions, along with well thought-out scenarios of action and reaction, and cause and effect activities that give the decision maker a keener insight into what decisions and subsequent actions might result in the most favorable outcome. You must make sure that your recommendations allow decision makers and relevant firm members the necessary maneuvering room to make decisions and take actions. Even if this maneuvering room is apparently not available and the firm cannot change the inevitable pattern of events about to take place, then at least the decision makers were forewarned of it and can begin the process of setting up the policies, procedures, and structures necessary to deal with the consequences that are ultimately emerging. Additionally, this will reinforce the need for you and the firm to monitor the emerging issues, to gauge the speed, direction, and magnitude of the changes decision makers see as being important, and then to continually refine those forecasts and scenarios so the decision makers can have confidence in the intelligence that you deliver.

Summary

I&Ws are based on a competitive rival's likely preparations for an assault or attack in the marketplace. Conventional I&Ws include several identifiable events: purchasing of media; hiring of specialized employees; new product information being distributed through sales channels; and significant changes in communications patterns with any stakeholder along the value chain. Once observed, these events are then referred to as "indications." You determine how imminent the threat is by the totality of indications and issue warnings to your decision makers at various threshold levels.

However, I&W is normally a methodology restricted to the strategic and operational levels of competition. The new competitive environment requires the development of effective and efficient I&W systems that can separate signals from the noise out of the mass of incoming data. Additionally, they require analysts to work actively and regularly with decision makers in the development of indicators, as well as acquiring the necessary communication, information, and management support needed to maintain this analytical process at effective levels over time. Finally, I&W analysis is not an exact science—predictions can never be issued by analysts without some uncertainty; it means judging the probability that certain events (indicators) precipitated by rivals will lead to significant competitive impacts on the marketplace.

FAROUT Summary

Figure 24.1 Indications and warning analysis FAROUT summary

Future orientation—High. I&W analysis focuses expressly on "industry change drivers," pending or imminent competitor activity, and how developments pose potential surprises. This is one of the more useful tools for foreseeing (and hopefully forestalling or minimizing) future crisis situations.

Accuracy—Medium. Constantly monitoring competitor activities, events, and established drivers will enhance the levels of accuracy achieved in the application of I&W. However, it is clearly more difficult to gain a complete understanding and tracking of external factors that underlie indications interact with one another.

Resource efficiency—Medium. Developing appropriate indicators requires study of past data. Monitoring activities, events, and trend information can take significant resources. Public sector organizations (like national military organizations or intelligence agencies) sometimes employ dozens or even hundreds of people to ensure proper utilization. In multinational corporations, I&W can be facilitated through astute usage of software-based solutions and grassroots, informal networks connected through intranets, and related communication facilities.

Objectivity—Low to medium. Dependability rests with I&W analysts and the process they use to arrive at their predictions of rival's future actions. As with many forms of analysis, biases and mindsets may distort true industry shifts in applications of this technique.

Usefulness—Medium to high. In industries with high levels of change and uncertainty, I&W analysis has the potential to save the firm from disaster. Even in less-dynamic industries, this technique can reduce surprises, minimize disruptions, and lessen uncertainty in decision making.

Timeliness—Medium. Gathering information and analyzing and interpreting can take time. Then another team must conjure the scenarios, adding to the timeframe. Once an I&W analysis system is fully operating, triggers in the system can facilitate the analyst's timely warning of activity to their decision makers.

Related Tools and Techniques

• Blindspot analysis
• Early warning analysis
• Industry analysis
• Issue analysis
• S-curve analysis
• Scenario analysis
• STEEP analysis
• War gaming

References

Albrecht, K. (2000). Corporate Radar: Tracking the Forces That Are Shaping Your Business. New York, NY: AMACOM.

Campbell, W.A. (1999). "Traditional I&Ws for host-based intrusion detection," presented at the First Annual Computer Emergency Response Team (CERT) Conference, Omaha, Nebraska. Presentation documentation available at http://www.certconf.org/presentations/1999/.

Fahey, L. (1999). Outwitting, Outmaneuvering, and Outperforming Competitors. New York, NY: John Wiley & Sons, Inc.

Fleisher, C.S., and B.E. Bensoussan (2003). Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition. Upper Saddle River, NJ: Prentice Hall.

Fuld, L. (2003). "Be prepared," Harvard Business Review, November/December, pp. 20–21.

Gilad, B. (2004). Early Warning: Using Competitive Intelligence to Anticipate Market Shifts, Control Risk, and Create Powerful Strategies. New York, NY: Amacom.

Grabo, C. (2002). Anticipating Surprise: Analysis for Strategic Warning. Washington, DC: Center for Strategic Research—Joint Military Intelligence College.

Herring, J. (2005). "Create an intelligence program for current and future business needs," Competitive Intelligence Magazine, 8(5), pp. 20–27.

Jones, M.D. (1998). The Thinker's Toolkit: 14 Powerful Techniques for Problem Solving. New York, NY: Three Rivers Press.

Sawka, K. (2001). "Warning analysis: A risky business," Competitive Intelligence Review, 8(4), pp. 83-84.

Stalk, G., and T. Hout Jr. (1990). Competing Against Time: How Time-Based Competition is Reshaping Global Markets. New York, NY: The Free Press.

Swanson, S.K. (2005). "I&Ws analysis post 9/11: Analyzing enemy intent," The Vanguard, Journal of the Military Intelligence Corps Association, 4^th quarter, pp. 11–13.

Swanson, S.K. (undated). "I&Ws post 9/11: New strategies for intelligence," retrieved from the Web on March 18, 2006 from http://www.micorps.org/downloads/Swanson_I&W.pdf.

Thompson, A.A., Gamble, J.E., and A.J. Strickland (2006). Strategy: Winning in the Marketplace, 2^nd edition. New York, NY: McGraw-Hill.

Endnotes

¹ Campbell, 1999.

² Albrecht, 2000.

³ Gilad, 2004.

⁴ Stalk and Hout Jr., 1990.

⁵ See Fleisher and Bensoussan, 2003, Chapter 17.

⁶ Fuld, 2003.

⁷ Gilad, 2004.

⁸ Fahey, 1999.

⁹ Grabo, 2002; Swanson, undated; Swanson, 2005.

¹⁰ Swanson, 2005.

¹¹ Grabo, 2002.

¹² Swanson, undated.

¹³ See Fleisher and Bensoussan, 2003, Chapters 9, 11, and 14.

¹⁴ For help doing this, see Chapter 16, "Strategic Relationship Analysis."

¹⁵ Thompson, Gamble, and Strickland, 2006.