Asking the tough questions

Editor’s note: Geisa Rodrigues is director of AG3 Consulting, a Sao Paulo, Brazil, research firm.

As in other developed countries, the telecom market in Brazil has been impacted by the convergence of the Internet, mobile phone and landline phone services. A leading provider of mobile phone services in Brazil needed to benchmark some Internet providers in the country in order to launch its own mobile Internet services and be sure that its new product was in line with local market demand.

The client’s first goal was to understand the human resource structure of six of its main competitors in Brazil to understand the number of employees and level of training necessary for its own staff to be able to offer a similar or better Internet service.

Our client’s second goal was to identify these Internet providers’ business plans, which would allow them to better understand the objectives upon which their business core was focused. We sought to collect strategic market information about the important competitors in order help our client create its own differentiating and unique market positioning.

For us, the major challenges were the collecting of valuable, helpful strategic information from competitors without being unethical.

The client needed precise and deep information about the competitors’ human resource structure in parallel with a mapping of their business plans, including their shareholding structure, headcount, professional profiles of their main executives, the core competencies of their staff, staff remuneration, internal politics, turnover and professional development incentives.

Understanding the business marketing positioning of those providers meant learning their business plan, marketing positioning, main revenue sources, portfolio of services and prices as well as comparative SWOT analysis among the six Internet providers surveyed.

Requires a well-established plan

B2B firms are a specific segment for which gathering any type of information requires a well-established data collection plan since this process faces the barrier of information confidentiality.

Thus, we laid down a methodological strategy based on two pillars: 1) desk research (secondary data collection), and 2) primary data collection. The latter relied upon a qualitative research methodology through in-depth interviews with two key people from each Internet provider - one person from the human resources department and a second from the engineering and/or information technology departments. Only manager-level interviewees were recruited.

The interview instrument was a semi-structured questionnaire lasting approximately 50 minutes that was built to employ indirect questions. In other words, fieldwork researchers were trained for the possibility of interviewees not wishing to answer questions they felt were too invasive. Thus, in instances where they could not obtain very close answers, they could accept approximate ones. For instance, instead of directly asking, “What are the officers’ salaries?”, the questionnaire employed structured questions in which a scale of pre-stipulated salary amounts was defined. (The scale of salary ranges was obtained from desk research on salary standards per position in Brazil from Catho, a Brazilian human resources consulting firm.) As a result, a distinguishable salary range was collected for each employee position from each company and the comparison among those findings offered enough information to closely estimate the remuneration policy for each Internet provider.

Similarly, the business plan of each company could not be obtained all through secondary data collection but mainly through interviewing decision makers from each company. Again, the use of non-invasive questions helped overcome the barrier of confidential information. In the previous desk research data collection phase, using the client’s expertise about the business, we were able to predefine some parameters to guide possible answers to use on the questionnaire.

So instead of directly asking the interviewees to describe the company’s business plan, questions were developed so that the interviewee made choices among the possible answers (a categorical scale of answers varying from “agree” to “disagree”, 1 to 5) instead of clearly offering a precise (and potentially confidential) answer. Thus, results showed not exact answers but approximate answers that nevertheless gave shape to each company’s strategic business steps.

In an accurate manner

Well-considered methodology choices together with well-planned instrument decisions form a solid research strategy when it comes to competitive intelligence data collection. However, successful data-gathering can only be achieved if the items above are dealt with in an accurate manner, together with the prior training of researchers on human intelligence skills. In other words, researchers must be in some way senior strategic thinkers and deeply know the objectives of the project. Overall, they have to be able to develop questionnaires and also be intelligent and insightful interviewers.

Another critical part of the process is, naturally, the cooperation of the interviewees. Cooperation was secured two ways:

1. By offering them a convincing incentive in the form of a general summary report of the findings at the end of the study with the purpose of creating an impression that all companies researched and the (unnamed) client shared strategic information. If opinion leaders such as the respondents recruited for this project did not feel they were obtaining new information while giving information, then there would be no cooperation. Information is the most valuable currency for this type of respondent. (Note: The summary report did not expose the client nor did it offer detailed information.)

2. By satisfactorily explaining the purpose of the study to the interviewees. Taking into account that the client’s name needed to be confidential, interviewees were informed that a national macroeconomic study was being carried out to benchmark an aspect of the Internet business in Brazil, so their participation to make the study as complete as possible was crucial. In practice, while some objectives were revealed other specific objectives were omitted.

Build a complete picture

Projects based on information gathered from the staff of competing firms require competitive intelligence analysts to take the findings and build a complete and accurate picture. In the end, the client felt that the combination of primary and secondary data sources in this study led to its success and effectiveness as a tool to support its strategic business plan. Further, the researchers’ experience with CI analysis and data mining along with their background in the telecommunications industry lent credibility to the report.

Findings revealed that aiming for market share versus share-of-wallet (Figure 1) were two opposite possible strategies of the Internet business in Brazil. Few companies are able to balance both strategies and be market-share leaders while also leading in profitability. In other words, while most Internet companies are fighting over the number of clients, it seems that some of them are mostly concerned with higher profit margins (share-of-wallet), sacrificing obtaining the largest number of clients (market share).

According to the key people interviewed for the research, the information content to be offered by each Internet provider’s Web portal is the business anchor for the companies, to which a great part of their effort is directed (Figure 2). They are also focused on the expansion of national coverage as a strategy for competitive advantage.

The findings directed the client’s business plan in a way that paved the way for the launch of a new product that offered Internet access to desktops and laptops through cell phone signals.

Choosing the right mix

The success of projects such as this lies in choosing the right mix of data collection techniques, developing a strategy for obtaining the information the client is seeking, training interviewers to be thorough without appearing too invasive and mustering the skills to interpret and analyze the primary and secondary data.