Competitive Intelligence and Espionage Quiz
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Questions and Answers

Define competitive intelligence.

A systematic program for gathering and analyzing information about your competitor's activities and general business trends to further your own company's goals.

Define industrial espionage.

The illegal and unethical theft of business trade secrets for use by a competitor to achieve a competitive advantage.

What are the two types of industrial espionage?

  • Actively seeking to gather intelligence about a company or organization - theft (correct)
  • Concealment or denial of access of key information related to pricing, bidding, planning, research, and more (correct)
  • Using deception to obtain confidential information from a competitor
  • Hacking into a competitor's computer systems to steal data

Which of the following are examples of sources of industrial espionage?

<p>Old equipment (A), USB sticks (C), Conferences (D), Laptops (F), Phones (G), Offsite/travel: bribes, extortion (H), Facilities (I)</p> Signup and view all the answers

What are the criminal penalties for violating the 1996 Economic Espionage Act?

<p>Up to 10 years for individuals, fines up to $5 million for organizations.</p> Signup and view all the answers

Define elicitation. What are the different techniques?

<p>Elicitation is a tactic used to extract information from individuals, often by building a personal relationship with them and creating a sense of trust. Techniques include using social engineering, flattery, and building rapport to gain access to sensitive information.</p> Signup and view all the answers

Which of the following are types of economic-political risks?

<p>Expropriation (A), Confiscation (C), Domestication (D)</p> Signup and view all the answers

True or false: competitive dis-intelligence and industrial espionage are the same thing.

<p>True (A)</p> Signup and view all the answers

What is the 5-step process for Competitive Intelligence (CI) from ABA?

<ol> <li>Planning and direction</li> <li>Data collection and research</li> <li>Data analysis and production</li> <li>Dissemination of intelligence</li> <li>Decision and actions</li> </ol> Signup and view all the answers

Which of the following are sources of secondary research?

<p>Industry reports &amp; syndicated services (A), Government/academic databases (C), Trade press (news) (E)</p> Signup and view all the answers

Which of the following are sources of primary research?

<p>Surveys (A), Human intelligence (C), Digital fingerprints (E)</p> Signup and view all the answers

What are the steps of competitive intelligence?

<ol> <li>Define the question</li> <li>Learn the industry structure</li> <li>Know your sources (basic and creative)</li> <li>Conduct a literature search</li> <li>Retrieve the articles/explore the library</li> <li>Milk those articles (look for names of key people)</li> <li>Prepare a strategy (of what is best sources to focus on)</li> <li>Begin the interview process</li> <li>Conduct a debriefing</li> </ol> Signup and view all the answers

Which of the following are sources of competitive intelligence?

<p>Industry background (A), Company financials (B), Competitor patents (C), Competitors (D), Market share (E), Industry experts (F), Management personnel (G), International information (H), Social media (I), Advertising (J), Government databases (K), Customer feedback (L), Company background (M)</p> Signup and view all the answers

Define Murphy's Law of intelligence gathering.

<p>The corporate information you are seeking is probably located in the very sources you decided to overlook because those sources were too obvious.</p> Signup and view all the answers

Which of the following are available databases for competitive intelligence?

<p>S&amp;P Global Netadvantage (A), Hoovers (B), LexisNexis (C), Business Source Premier (D), Gale Business Insights (E), Table Base (F), IBISWorld (G), Mergent Intellect (H)</p> Signup and view all the answers

What are the two types of legal problems that can arise with competitive intelligence?

<p>Problems related to an insurer or its agent obtaining information from public sources or third parties (A), Problems related to obtaining competitive intelligence by competitors acting cooperatively (C)</p> Signup and view all the answers

What does Section 1 of the Sherman Antitrust Act prohibit?

<p>Section 1 prohibits certain concerted, or joint, activities that restrain trade, such as price-fixing, refusals to deal, bid-rigging, etc.</p> Signup and view all the answers

What is the penalty for violating the Sherman Act?

<p>Felony which can be punished by up to 3 years in prison and $350,000 fine for individuals, or $10 million fine for corporations.</p> Signup and view all the answers

What are the main points for conducting a survey to avoid antitrust violations?

<p>There are at least five entities providing information (A), A survey must be managed by a third party (C), The information is aggregated so that individuals cannot be identified (D), The information must be at least three months old (F)</p> Signup and view all the answers

What is the Freedom of Information Act?

<p>The Freedom of Information Act (FOIA) gives all citizens the right to inspect all records of federal agencies except those containing military, intelligence, or trade secrets; it increases accountability of bureaucracy.</p> Signup and view all the answers

What are Sunshine Acts?

<p>Sunshine Acts require that most government meetings be conducted in public and that notice of such meetings must be posted in advance.</p> Signup and view all the answers

Define trade secret.

<p>Any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable to afford an actual or potential economic advantage over others. The holder must take adequate precautions to protect the trade secret.</p> Signup and view all the answers

Define reverse engineering.

<p>The examination of a product by its competitors to determine the method of production, ingredients, etc., involved in the product.</p> Signup and view all the answers

A customer list is a trade secret if reasonable efforts are made to protect it, it has commercial value to the owner, and it is not otherwise available in the public domain.

<p>True (A)</p> Signup and view all the answers

Which of the following are improper methods of information acquisition?

<p>Breach of contract (B), Unauthorized interception of communications (C), Theft (E), Fraud (F)</p> Signup and view all the answers

What are the three skills needed for success?

<ol> <li>Technical Skills - the ability to understand and use concepts and tools of the profession. 2. Interpersonal Skills - the ability to work effectively with others. 3. Conceptual skills - the ability to think strategically and to approach challenges as an integrated whole.</li> </ol> Signup and view all the answers

What is the relationship between positivity and success?

<p>Positive thinking and a growth mindset can contribute to success by fueling motivation, resilience, and a willingness to take risks. Conversely, negativity can hinder progress by fostering self-doubt, limiting opportunities, and leading to a more passive approach to challenges.</p> Signup and view all the answers

Define moral mazes.

<p>The numerous ethical problems that managers must deal with on a daily basis, such as potential conflicts of interest, wrongful use of resources, mismanagement of contracts and agreements, etc.</p> Signup and view all the answers

Define managerial mischief.

<p>The illegal, unethical, or questionable practices of individual managers or organizations, as well as the causes of such behaviors and remedies to eradicate them.</p> Signup and view all the answers

Define teleological reasoning.

<p>An evaluation of the sum total of goodness vs. badness likely to be provided by each alternative for all relevant stakeholders.</p> Signup and view all the answers

What are the elements of the HV model?

<p>The HV model (Honesty-Veracity) is a framework for ethical decision making that emphasizes honesty and truthfulness in all aspects of business. It involves four key elements: 1. Honesty - the commitment to tell the truth; 2. Veracity - the commitment to be truthful; 3. Integrity - the commitment to act in a way that is consistent with one's values; 4. Fairness - the commitment to treat all stakeholders fairly and equitably. The model provides a foundation for making ethical decisions based on core principles and values.</p> Signup and view all the answers

Define relativism and its two forms.

<p>Something is relative to something else - there are no objective standards. Relativism often implies nihilism - the belief we can never have genuine knowledge about anything.</p> <p>Cultural relativism: the elements of culture are relative to the norms of that culture, and there are no objective criteria to evaluate cultural elements. Ethical relativism: what is ethical can only be evaluated relative to some moral code held by an individual, group, society, and that there are no objective standards for evaluating different moral codes across cultures.</p> Signup and view all the answers

What are the four tenets of scientific realism?

<p>Scientific realism asserts that the world exists independently of our minds and our theories, and that scientific theories provide true or approximately true descriptions of the world. The four main tenets are: 1. The world exists independently of our minds and theories; 2. Scientific theories provide true or approximately true descriptions of the world; 3. Scientific progress is possible; 4. There are real things the world that are unobservable.</p> Signup and view all the answers

What are the four questions that a new product must pass to be considered a disruptive innovation?

<p>How do we make money? (A), Who is the customer? (C), What does the customer want? (F), What is the underlying logic that explains how we can deliver to customers at an appropriate cost? (H)</p> Signup and view all the answers

Flashcards

Competitive Intelligence

The systematic process of gathering and analyzing information about competitors' activities and industry trends to gain a competitive advantage.

Industrial Espionage

A violation of federal law that can result in lengthy prison sentences and hefty fines for both individuals and organizations.

Competitive Dis-Intelligence

The intentional concealment or denial of crucial information related to pricing, bidding, planning, or research.

Elicitation

The act of cultivating a relationship with an employee to gain access to confidential information.

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Economic Espionage Act of 1996

This law aims to protect American businesses from economic espionage and theft of trade secrets.

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Confiscation

The most severe form of economic political risk, where the government seizes assets without compensation.

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Expropriation

A less severe form of economic political risk, where the government seizes assets with some compensation, often nationalizing the investment.

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Domestication

A form of economic political risk where the government forces local ownership and increased national investment in a firm.

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ABA's 5-Step Process for CI

A 5-step process for collecting and analyzing competitive intelligence, developed by the American Bankers Association.

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Secondary Research

Information sources that are readily available to the public, such as trade publications, industry reports, and government databases.

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Primary Research

Information sources that involve direct interaction with individuals or the environment, such as surveys, human intelligence, and digital footprints.

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Steps of Competitive Intelligence

A step-by-step process for gathering competitive intelligence, including defining the question, identifying sources, conducting interviews, and preparing a strategy.

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Murphy's Law of Intelligence Gathering

The concept that critical information is often overlooked because it seems too obvious.

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Available Databases

A set of databases providing comprehensive business information, including market data, company financials, industry reports, and more.

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Misappropriation of Trade Secrets

The act of illegally obtaining trade secrets through reverse engineering, theft, or other means.

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Reverse Engineering

The careful examination of a product to understand its design, manufacturing processes, or components.

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Competitive Product Analysis

The act of studying a competitor's product to learn about its design, features, or manufacturing processes.

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Business Ethics

A set of principles and guidelines that govern ethical behavior in the business world.

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Moral Mazes

The numerous ethical challenges that managers face on a daily basis, such as potential conflicts of interest, misuse of resources, or deceitful practices.

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HV Model (Harvard Value Model)

A framework for analyzing the ethical implications of alternative choices in a business situation.

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Cultural Relativism

The belief that morality is relative to a particular culture or society, with no objective standards for judgment.

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Ethical Relativism

The belief that what is considered unethical can only be evaluated relative to a specific moral code held by an individual or group.

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Business Model

A model that describes the fundamental components of a business, including customer value proposition, key resources, profit formula, and key processes.

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Strategy

A plan or strategy that focuses on how to best compete with both existing and potential competitors.

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Operational Effectiveness

The process of maximizing efficiency in performing similar activities to rivals, but not necessarily achieving a sustainable competitive advantage.

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Purpose, Vision, Mission, and Tactic Statements

Statements that articulate a company's purpose, vision, mission, and specific actions to achieve its goals.

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Resource Value Matrix

A framework for analyzing a company's resources based on their competitive advantage potential.

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Disruptive Innovation

Innovative products or services that address existing needs in a way that is both simpler and more affordable, often disrupting established industries.

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Competitive Advantage

A company's unique set of resources, capabilities, and knowledge that allows it to compete effectively in the marketplace.

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Study Notes

Competitive Intelligence

  • Competitive intelligence: A systematic process for gathering and analyzing competitor activities and broader industry trends to benefit a company.
  • Competitive dis-intelligence: Covers the unauthorized and unethical acquisition of a competitor's confidential information; often overlaps with industrial espionage.
  • Industrial espionage: The illegal theft of trade secrets to gain a competitive edge.
  • Types of Industrial Espionage:
    • Actively seeking to steal intelligence.
    • Concealing or denying access to key information.
  • Sources of Industrial Espionage:
    • Bribes, extortion; conferences; laptops; phones; USB sticks; old equipment; facilities.
  • Economic Espionage Act Penalties: Individuals face up to 10 years in prison; organizations face fines up to $5 million.
  • Elicitation: Developing relationships with employees to obtain confidential data or products.

Economic Political Risks

  • Confiscation: Complete seizure of assets without compensation.
  • Expropriation: Partial seizure of assets with some compensation, potentially leading to nationalization of investment.
  • Domestication: Mandating local ownership and national investment.

Competitive Intelligence Process (ABA)

  • Five Steps: Planning/Direction, Data Collection/Research, Data Analysis/Production, Dissemination of Intelligence, Decision & Action.

Research Sources

  • Secondary Research: Trade press, industry reports, government/academic databases.
  • Primary Research: Human intelligence, surveys, digital footprints.

Competitive Intelligence Steps

  • Define the question: Clarify the specific information needed.
  • Learn industry structure: Understand the competitive landscape and players.
  • Identify sources (basic and creative): Explore various data sources.
  • Literature search: Find relevant articles and reports.
  • Retrieve articles: Access and explore articles.
  • Identify key people: Extract details about individuals in the articles.
  • Strategy preparation: Identify the most productive source categories.
  • Conduct interviews: Gather information through interviews.
  • Debriefing: Summarize insights and findings.

Sources of Competitive Intelligence

  • Company Financials
  • Market Share
  • Company Background
  • Industry Background
  • Competitors
  • Industry Experts
  • Management Personnel
  • International Information
  • Advertising
  • Government Databases

Murphy's Law of Intelligence Gathering

  • The critical information is likely located in sources overlooked due to their obviousness.

Databases for CI

  • Business Source Premier (SWOT analysis, articles, publications)
  • Gale Business Insights (International info, case studies, company histories)
  • IBISWorld (Research reports)
  • Mergent Intellect (Private international business data)
  • S&P Global NetAdvantage (Industry surveys, stock analysis)
  • TableBase (Company, industry, product data)
  • Antitrust/Unfair Competition: Problems arising from cooperative competitive intelligence gathering.
  • Privacy/Confidentiality: Problems with obtaining information from public sources or third parties, including trade secrets and potential breaches of law.

Sherman Antitrust Act

  • Section 1: Prohibits joint activities that restrain trade (e.g., price-fixing, bid-rigging).
  • Section 2: Prohibits monopolization and the abuse of monopoly power.
  • Violation Penalties: Individuals face up to 3 years in prison; corporations face $10 million fines.

Survey Conduction

  • Third-party Management: A third party (e.g., consultant, lawyer) should conduct the survey.
  • Data Age: Information used must be at least three months old.
  • Diverse Entities: Information from at least five different entities is required.
  • Anonymity: Sensitive data must be aggregated to prevent identifying survey participants.

Freedom of Information Act

  • Allows citizens access to federal agency records (excluding military, intelligence, and trade secrets).

Sunshine Acts

  • Mandates public access to governmental meetings. (requires notification)

Trade Secrets

  • Information valuable to a business that's not publicly available.
  • Must take adequate precautions to protect.

Reverse Engineering

  • Analyzing a competitor's product to determine its production methods, ingredients, etc.

Customer List as Trade Secret

  • Must be protected with reasonable efforts, have commercial value to owner, and not be publicly available.

Improper Information Acquisition Methods

  • Theft, fraud, breach of contract, unauthorized interception of communications.

Skills for Success

Positivity and Success

Moral Mazes

  • Ethical dilemmas faced by managers daily.

Managerial Mischief

  • Illegal, unethical, or questionable practices in management.

Teleological Reasoning

  • Evaluating choices based on their overall good and bad consequences for all stakeholders.

Deontological Reasoning

  • Evaluating choices based on established norms and rules.

HV Model Elements

Relativism

  • Meaning: No objective standards for knowledge.
  • Forms:
    • Cultural Relativism: No objective criteria to evaluate cultural elements.
    • Ethical Relativism: Ethical codes are relative to entities, with no universal standards.

Scientific Realism

Business Model Four Questions/Pieces

Strategy Definition

Strategy Misconceptions

Hurdles to Strategy

Strategy PTF Elements

Operational Effectiveness

Purpose, Vision, Mission, Tactics

Resource Value Matrix (R-A Theory)

Major Strategy Types

Disruptive Innovation Questions

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Description

Test your knowledge on competitive intelligence, industrial espionage, and the ethical implications surrounding these topics. This quiz covers the processes, risks, and legal penalties associated with acquiring and managing competitive information. Prepare to explore both the legitimate and illegitimate sides of intelligence gathering.

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