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Opinion Section

91

Available for free online at https://ojs.hh.se/

Journal of Intelligence Studies in Business Vol 4, No 2 (2014) 91-111

Competitive Intelligence in the Defense Industry:


A Perspective from Israel A Case study analysis
Avner Barnea1
1

Ono Academic College, Israel


avner.bar@ono.ac

Received November 28, accepted December 26 2014

ABSTRACT: Purpose - The defense industry is one of the leading business sectors
in Israel and also worldwide. Competitive Intelligence (hereafter CI) is embedded into
this sector and supports its decision making process. In recent years more information
about this industry and about the CI activity is available while characterized by fierce
competition and quick changes in the competitive environment. It is evident that CI is
used widely by the leading firms in this sector while it has become an integral part of
the business activity, and its added value seems to be significant. It is possible to
define a framework of CI activity in this industry and to reflect on its advantages and
limitations. It is my hope that this paper will encourage further research on this topic.
Methodology/approach Gathering information that has been published in Israel and
abroad that was analyzed and thus offers insight into this issue. Findings The
defense industry in general and especially in Israel is using CI intensively in the
highly competitive environment of defense products to support the decision making
process. Research limitations For many years, the information on this sector was not

Opinion Section

92

available. It is in now in a process of change and this enables us to build up a


comprehensive picture. Practical implications This study can make a contribution to
global corporations competing in highly dynamic sectors, especially those that are
operating in the governmental sectors. Originality/ value This is the first work in
Israel on the use of CI in the defense sector. Paper type: A case study analysis.

KEYWORDS: Competitive intelligence, Marketing intelligence, defense industry,


Israel

Introduction

slight increase compared to 2008, which

The defense industry was one of the fastest

amounted to defense exports at $ 6.3

growing business fields in Israel (2010). In

billion, an increase of 7%. The Israeli

recent years and especially since the mid

defense exports 2010 results are indicating

1990's, defense export became one of

that they have reached to $7.2 billion in

Israel's leading export sectors, with high

2010

profitability and stable growth. Israel was

(http://www.globes.co.il/news/article.aspx?di

considered world wide as one of the

d=1000654713). It should be noted that

leading countries in the field of defense

defense exports is one of the few areas that

exports. According to national data on

have been hurt less during the global

arms exporters in 2007, Israel was in

economic slowdown that began at 2008

fourth place, with sales of $4.4 billion

(http://www.israelwtc.co.il, http://www.pr-

after

inside.com/research-and-markets-israel-

USA;

Russia

and

France

(http://www.sipri.org/yearbook/2009/07/
07B). According to recent estimations

defence-and-r2131715.htm).
The

heart

of

the

Israeli

defense

Israel's global share on the arms exports in

companies was its advanced technology.

2009

Its

has

reached

to

14%

comparative

advantage

was

(http://jdw.janes.com/public/jdw/index.s

technological excellence. Israeli solutions

html). In 2010 the overall spending of

were often considered to be highly

worldwide governments on defense has

innovative and better than other solutions

reached to $1.7 trillion while the US is

by

responsible to 45% of it. Israel's defense

hundreds of millions of dollars a year in

exports in 2009 amounted was $ 6.75

research and development intended to

billion, which is 16% of total Israeli

maintain

exports

2009

Israeli defense products and technologies

is

were considered to be most advanced,

in

(http://www.israelwtc.co.il).

This

the

competitors.

this

Investment

of

advantage.

Opinion Section

93

multi-disciplinary and often long ahead of

especially in Israel and to see how

the technology used in the civil market.

beneficial it was for the process of

The primary source of Israel's relative

decision-making in this field. Referring to

advantage in this industry was the needs

this issue was possible through studying

for the most advanced products set by the

the performance of Israel's defense firms

Israeli military systems, especially by the

in foreign markets, mainly in recent years.

IDF (Israel Defense Forces). On the other


hand, one of the most important goals of

Characteristics of the sector of

Israel's economy is to increase its exports

defense industries

as its economy relied heavily on export of


most advanced technological products. A
distinct advantage of Israeli defense

Here are the characteristics of the defense


industries' markets;

products is the fact that they usually have


gained a variety of combat experiences by
the

IDF,

which

increased

their

attractiveness in the eyes of its customers


(http://www.businessmonitor.com/defence
/israel.html).
Although there were security limitations
on defense exports to avoid leakage of
secrets that could damage the state
security, Israel authorized a wide range of
defense products for be exported. (Dvir &
Tishler, 1998).
As Competitive Intelligence (hereafter,
CI) became recognized, and its value was
more acknowledged in recent years, its
direction went towards gaining strategic
intelligence (Montgomery and Weinberg,
1979). Fulfilling CI became part of the
many firms' capabilities (Porter, 1980).
Qualified CI functions have been playing
growing role by Israeli firms in this sector
to become more competitive.
The purpose of this paper is to assess the
value of CI to the defense industry,

1. Defense equipment purchasing is


determinated by states based on
their assessments of military
threats and on the allocations to
defense budgets, usually affected
by economic parameters.
2. This market was characterized by
intense competition, while the
leading companies were based
mainly in the US, UK, France and
Germany. Although 2010 has seen
changes in these markets while US
shifted its priorities, China's global
rise while threats in Europe have
been much reduced, the
competition was still fierce.
3. The targets of the sales were
usually government organizations,
mainly the military and the
defense establishments which
have high quality demands and

Opinion Section

94

were anticipating for highly

customers

and

potential

sophisticated solutions.

customers, usually state military

4. Usually, the sales were resulted of

and security organizations and

winning tenders. These wins have

also for competitors, which often

far been reaching financial and

were the ones you have shared

strategic significance, as often it

with them in the past and possible

would be leading to extended

candidates for cooperation again

business relations, including later

in the future. Hence, defense

upgrading of the systems and

industries are also characterized

expanding sales of existing

by intense competition and also by

systems.

cooperation between the rival

5. Defense export process was

companies

characterized by high entry

opetition).

(known

as

co-

barriers to be able to develop


advanced products that have

The turning point in the Israeli defense

undergone a long process of field

exports' industry was in 1993 after major

experience in complex situations

political developments in the Middle East:

and have been proved their

the agreement between Israel and the

effectiveness.

Palestinian

Authority and

agreement

signed

6. Defense export procedures were

with

the

peace

Jordan

that

generally long-term processes,

changed the strategic position of Israel and

from raising the initial demand,

enhanced Israel's rapid economic growth

responsiveness, getting security

while the export was its leading strength.

clearance, selecting the winner,

As

the start of procurement,

transformation in the external forces

implementation and execution of

influenced intensively on this industry

systems and acquisition returns.

while the demand to fulfill CI needs was

7. Defense

exports

were

characterized by the participation


of huge corporations with high
complexity of demands that often
required ad hock cooperation with
other companies to increase the
chances of winning tenders. That
implied that these companies also
required a double vision - both for

we

can

see

evidently growing.

in

Table

1,

the

Opinion Section

95

Table 1: Impact of external forces


No.
1

External forces
Technological

Before 1993

After 1993

Moving towards more

Developed new

advanced technologies

capabilities and

in response primarily

advanced

to the local needs

technological products
to answer global needs
and compete
successfully with
leading world
corporations

Political

Mainly influenced by

Enhanced an

internal politics

international strategy

among government

by aiming towards

and military

identifying the needs


of foreign customers.

Economic

Supplied mainly local

Moved towards global

military needs

markets with
distinctive pricing
structure

Industry competition

Low exposure to

Intense competition in

global competition.

global markets

Low competition in
the local market
4

Key CI needs

Monitoring local

Monitoring capturing

needs of the military

of global needs of

establishment

numerous military
establishments

Characteristics

of

Competitive

Intelligence in the defense industries

firms in aerospace and defense found that,


by using CI, three companies obtained
outstanding results. The study showed that

A survey conducted in the USA (Prior,

the industry average:

2009) compared 152 companies actively


involved in CI with 1,396 in the same 19

1. Bid success rate was 18 per cent,

industries. A benchmarking study of 24

but the top three won 87 per cent,

Opinion Section

96

75 per cent, and 57 per cent

and Schoemaker 2006). They actually

respectively;

acted by applying 'informed anticipation'

2. Return for every dollar spent on

approach (see Day 1997) to systematically

proposals was US$78, but the top

identify in advance changes in the needs

three averaged US$225.

and in the markets and to respond by build


comprehensive

understanding

of

the

The evolution of CI in Israel was behind

technological trends that shape the future

the progress achieved in the US and other

and make their assessment available to

western countries (Prescott, 1999). One of

their management.

the main reasons for this inferiority was


the over- confidence of Israeli executives

Here are some distinctive features of CI


in the Israeli defense industry:

claimed to have captured the essence of


intelligence while in their military service

1. CI activity was perceived as it can

and implemented it within the business

significantly increase the chances

field with no need to develop dedicated CI

of winning tenders and producing

capabilities. This has been changed in the

competitive

last ten years (Barnea 2004).

Kahaner 1996). One of the results

advantage

(see

By its nature, CI in defense industries

was wide CI awareness among

was more strategically oriented, then

executives and members of staff in

tactical. The issues CI often covered were

this sector.

more long term defense trends and indepth

competitors

and

customers

assessments. Its customers were the top

2. Defense export companies tend to


allocate significant resources to
develop in- house CI capabilities.

management, (but also sales teams and

3. CI activities in this area were

technological teams) and its analysis

characterized by the need to

methods were advanced to meet the

monitor comprehensive range of

expectations of senior executives.

many frequent changes in the

The fierce competition described above

competition

map

with

large

brings the companies engaged in defense

quantities of information. It was

exports to develop strong CI units that

considered more as a strategic tool

make the best use of CI discipline for

rather as a tactical tool by

competitive benchmarking. (McGonagle

providing

& Vella, 1996). Companies engage in this

(general discussion on the value of

sector,

CI see in Prescott and Gibbons,

unlike

many

other

sectors

(Attaway, 1998), recognize the need for


professional peripheral vision (see Day

1993).

important

insights

Opinion Section

97

4. The key intelligence topics (KIT's)

entering into new business sectors

of CI units in this industry were

close to their core business, as

mainly

homeland security.

the

requirements,

intentions and plans of countries

8. Durable relying on the gathering

and defense establishments to

capabilities

improve their military capabilities

information by the sales force

by purchase defense products and

teams (contrary to what we know

competitors' activity aiming to

in other industries, Lambert, 1990)

beat the others. Special attention

that were also benefited from the

was

CI analysis capabilities. Sale force

given

to

technological

and

become

sharing

an

of

innovations. The price issue was a

has

important

significant factor in decisions

gathering tool and efforts are

regarding winning tenders.

conducted to improve their CI

5. Strong macroeconomic analysis

capabilities (the conceptual issue

capabilities were implemented to

is discussed in Moncrief and

understand long-term trends and

Marshal, 2005).

to be able to assist in solutions to

9. CI functions usually were holding

strategic planning needs.

highly the interrelations between

6. The development of early warning


capabilities
identification

that

help
of

them and the various business

early

units and expected to provide

business

added

opportunities and threats from

value

to

the

decision

making process.

existing and new players. These


allowed better monitoring and

It is likely to infer as shown in Table 2,

enhance for understanding (for

that

further discussion see Gilad 2004).

conformed to the changes in the activity of

7. Assistance by external research


companies to get updates through
initial

definition

intelligence

needs

of

key

and

also

initiating specific research needs


like assessing firms that were
potential targets for acquisition or
for partnership or considering

this

the

progress

sector

intelligence:

of

supplied

CI

practices

added

value

Opinion Section

98

Table 2: Changes in Israeli CI activities


No.
1

CI activities
CI model

Before 1993

After 1993

Process of slow

CI dedicated

developing formal CI

capabilities became

and infrequently use

formal

CI task forces
2

CI unit location

Mainly in HQ slightly

In HQ (corporate

spread in business

level) and also in

units

business units

CI area focus

Domestic

Global

CI topics

Narrow: to cover

Broad: to cover world

mainly local

competition covers

competition, usually

tactical and strategic

tactical information

issues

Little

Moderately becoming

Support by IT dedicated tools

intensive
6

Extent of analysis

Limited

Moderate

Extent of use of out sourcing

Limited

Broad, mainly for


gathering through
Open Source
Intelligence (OSINT)

CI support to the selling


process

Not considerable

Critical as the buying


processes and the
marketplace became
more complex.

Practical implementation of

including the use of advanced information

Competitive Intelligence

technological systems (see discussion of


the use of these tools in Israel in Barnea,

Usually the professional level of CI units

2009). This was the outcome as of the

among defense export companies was

need to cover a wide range of information

considered to be high ranked at the top,

sources, regular updates of the decision-

comparing to similar units in other sectors

makers and being involved in countless

by the total resources invested in them

activities, including assessments of the


state of competition. These units often

Opinion Section

99

make use of forecasting tools of the

primary sources and translated it all into

business environment being characterized

formulating an answer would have an

by

planning

advantage and increase the chance to win

processes (for further discussion on the

defense tenders. We could assume that a

challenges of business forecasting see

British company in the defense industry

Laseter,

will monitor the difficulties of British

monitoring

long-term

Lichtendahl

and

Grushka-

Cockayne, 2010 and Courtney, 2001).

soldiers fighting in Afghanistan, for

An important part in responsibilities of

example, in the early detection of enemy

CI units was early identification of

snipers and will initiate the British

business opportunities. The purpose was to

Defense Ministry to propose a solution,

find opportunities while still in the initial

even if the bureaucratic procedure of

stage at the prospect, preferably in the

issuing a tender yet not started or

stage of shaping the requirements, to be

completed. This information may come

able to prepare a response ahead of the

from a variety of sources, including social

competitors.

networks, publications of the Department

Although CI in defense

industries

of Defense, blogs of soldiers participating

enjoyed high awareness to the importance

in the war, interviews with soldiers who

of CI by many executives in the firm, still

have returned from the battlefield in local

the implementation of the discipline of

newspapers, publications of the Islamic

"sharing of information" had to be

organizations active in Afghanistan and

enhanced. The obstacles were not just the

more.

nature of people but also the security


aspects which were not to be ignored. Still

Key Intelligence Topics in the

the need to share more competitive

defense industries

information existed. Defense industries are


not alone. Lovello and Sibony (2010) were
referring to the problematic culture of
many organizations that withhold to share
information

and

practically

were

strengthening the "silo thinking" while CI


was often aiming towards avoiding these
behaviors.

translate

the

competitive

information received from Open Source


Intelligence

Monitoring and assessing of military


threats encountered by clients or potential
clients such as defense organizations and
defense forces

are critical to early

identification of business opportunities.


For example, the threats that were faced

Accepted estimate was that anyone who


could

1. Military threats

(OSINT)

combined

with

by Indian troops on the border with


Pakistan were different than the threats
faced by the Spanish intelligence and

Opinion Section

100

security organizations fighting against the

intelligence on customer needs and rising

Basque resistance ETA. Being aware of

opportunities

military

to

throughout all stages of the competition.

characterizing the operational needs and

An important tool was the company's

the requirements specific tools, which will

employees who were in continuous touch

reduce the threat or cancel it altogether.

with their customers. They should be

Comprehension of the progress of the

briefed also to collect information on

operational needs by the customers or

current and future marketing needs. For

future customers were critical factors

example prior knowledge of budgetary

expected to be addressed by CI units.

limitations of potential customer, which

threats

often

led

later

and

support

decisions

was familiar to just a few, ended in


2. Technological Intelligence

submission of a competitive proposal that

Technological intelligence continuously

brought this into account.

monitors technological solutions offered


by competitors in response to customers'
needs as early as possible. The aim was to
understand

the

existing

and

future

4. Strategic Intelligence
Strategic

intelligence

was

the

intelligence required to assess long-term

products that would compete in the

processes

marketplace in the future. It was required

players and the marketplace. That was,

to implement the discipline of Competitive

which direction facing the operational

Technology Intelligence (CTI). One aspect

requirements of the countries and armies,

of this issue was the need of the CI units to

the extent of investments in R & D by

build strong internal collaborations with

competitors over the coming

technological professionals to estimate

estimates of

precisely the current and future markets.

competitors beyond their core business

One of the challenges was determining the

areas, their intentions to enter into new

right priorities of the technological issues

areas, whether by self-development or

that have to be monitored at any given

through acquisitions, mergers and strategic

time.

partners. For example, it was reasonable to


estimate

3. Marketing Intelligence

and

that

intentions

by

various

years,

new directions by the

the

world's

leading

companies in defense were following with

While technological intelligence was

great interest after the business moves of

targeting competitors' capabilities, the

their Israeli competitor Elbit Systems,

focus in marketing intelligence was on the

which in recent years entered into new

customers. Marketing focuses on gathering

areas of activity mostly through mergers

Opinion Section

101

and acquisitions and not by organic

above in order to maximize their chances

development and would try to assess

to win.

Elbit's strategy in the coming years

CI in this industry was actually in its

(http://www.accessmylibrary.com/coms2/s

strongest

ummary_0286-28619791_ITM).

intelligence, according with the outline

Sometimes these strategic reports (for

that was described in the white paper by

example

Arthur D. Little consultancy (2010).

see

BAE

Systems

position

of

managing

the

http://www.baesystems.com/ProductsServi
ces/bae_prod_eis_global_analysis.html)

Working programs

are distributed to clients (policymakers


and intelligence officers) to help them to
understand
opportunities

the
in

threats,
the

risks

CI functions usually fit into the annual

and

programs of the Israeli defense companies.

international

The main task of the intelligence was to

environment.

respond to the intelligence requirements


according with these plans. For example, a

5. Tactical Intelligence

company decided to focus on the defense

Tactical intelligence was considered to

market of the Far East which until recently

be less critical in this sector, but it was still

was ranked low in its priorities list. Its CI

done on day- to- day basis: monitoring

unit was expected to provide information

changes in the markets, customer insights,

about competitors' activities in the above

changes among competitors and new

mentioned region, the customer's needs by

products (see discussion on tactical and

defense establishments and states, to point

strategical CI in Sawka 2010). This

towards new competitions (tenders) and to

intelligence often had an added value for

identify

the strategic intelligence.

between companies that may give a joined

early

strategic

partnerships

response to the customer's needs and so


In conclusion of this chapter - some
people may think mistakenly that CI in
defense

industries

was

about

price

on.
It was assumed that it was impossible to
develop

strategy

of

winning

discovery offered by competing tenders. It

competitions without setting up an orderly

was usually impossible to obtain this

Key

information in advance and companies

executed by the intelligence unit. It was

competing in this area were required to

also likely that the CI functions may build

expand their intelligence scoop as outlined

quickly intelligence capabilities that would

Intelligence Topics (KIT's)

list

meet the needs of the firms and thus

Opinion Section

102

increase their chances of winning. Action

time a single unit at a certain company

plans

cooperated with another company while

were

expected

to

summarize

priorities in collaboration with

their

another business unit within that firm

business units. CI units expected to work

competed against it in another sector. This

closely with the company's executives to

modus operandi allowed skilled benefits of

bring on to their attention the new

the primary sources among the company

opportunities as a result of the intelligence

employees, especially among the skilled

monitoring.

sales force and technological staff that

The uniqueness of CI activities in the

having been working at relationships with

sector of defense was the ability to act

various elements in the market. Primary

simultaneously

several

areas

of

sources were also intensive users of CI

mentioned

above,

in

materials and their professional expertise

markets which were characterized by

was playing a role in obtain important

tough competition and often insignificant

information

differences

by

competitors and opportunities, and shared

competitors. Therefore, it was necessary

it with CI professionals and other users.

for finest understanding of customer

Thus capable internal networks within the

needs, markets and capabilities of

firm, supported by dedicated software

competitors to know how to produce

often enable CI managers effectively to

intelligence

as

in

in

products

offered

competitive advantage that would help

on

customers,

products,

manage it.

in pointing at the competitive price


which was often a determining factor
in the final decision who wins the
competition.

Secondary sources
What

characterizes

the

activity of

secondary sources in this industry was the


challenge of utilizing enormous amounts
of

information

gathered

on

military

Sources of information and

equipment needs, marketing intelligence,

managing the gathering efforts

new technologies etc. The defense market

Primary sources

was characterized by a lot of open source


information on one hand and on the other

The defense export market was often

hand, keeping secrets tight. This required

characterized by ad hoc collaborations

high quality information management and

between companies and simultaneously

precise direction of collection efforts,

fierce competition known as co - opetion.

selection and analysis and distribution to

Therefore, it is possible that at the same

the appropriate units. Usually it was hard

Opinion Section

103

to expect to handle information without

Complexities

of

strategic

the assistance of dedicated information

technological issues in the exports' defense

systems (see Barnea 2009).

industries

enhanced

the

and

need

for

qualitative analysis, including frequent use

Managing the intelligencer efforts

of

forecasts

and

assessments

methodologies, formulated the overall


This competitive market required constant

quality intelligence into the

development of new information sources

making process. For example, analysis of

while keeping the existing sources. This

information about competitor's activity

was a result of the need to cover new

indicated

technological solutions, new geographical

development of an advanced generation of

regions and countries that were not in

technological

focus in the past, new products, etc. At the

previous generation was relatively new.

same time, there were sources that become

Further thorough examination revealed

obsolete as a result of changing priorities

that the existing solution did not meet the

and focus in other lines of businesses.

needs of the state acquired it so that

Therefore, it was necessary to conduct an

competitor needed to present a suitable

advanced system for managing Key

solution soon. This analysis also elevated

Intelligence Topics (KIT's) and the targets

business

of gathering ( firms, armies, military

attractive

establishment, etc.), including answers to

customer, a solution that proved itself but

the needs: who was the firm initiating the

was not purchased in the past by that state

request (asking for the information), who

in respect of the high price.

in the organization could provide the

that

it

moved

solution,

opportunity
offer

to

decision

into

although

resulted
the

in

fast

the

an

disappointed

This industry was often characterized by

answers, monitoring and access to the

intense

answers received at any given time and

economies, internal politics, international

information collected in response to avoid

relations, social changes, and a good

duplication and ensure optimal use of

understanding of legal and regulation

resources by the firm. By implementing

issues. This was in addition to common

the above, the CI functions were moving

analysis of competitors, customer, supplies

from occasional management of its KIT's

and monitoring of new technologies and

to a systematic direction.

advanced applications.

Production of quality analysis

macro

analysis

of

foreign

Opinion Section

104

(Customer Relations Management) and

Using internal information systems

ERP

(Enterprise

Resource

Planning),

CI units in the field of defense understood

where important information was analyzed

that one of the keys for their added value

in

was on one side to give access to many

information. For example, an army of a

people in the organization to competitive

certain country issued an immediate RFP

information and on the other hand to make

(Request For Proposals). It was required to

many in the

to

know all "our" existing and potential

information obtained, to evaluate the

capabilities to know if and how a reply

significance and bring it to the attention of

could be provided. Further assessments

others

organization.

revealed that the date of the development

Advanced information systems were a

of essential parts of the required system

critical support tool for the success of

was two years therefore it was impossible

competitive intelligence processes but the

to give an answer to that RFP. Its

primary challenge was to develop the

submission date was in six months and

awareness among the employees.

placing the system was within a year.

organization relate

in

the

conjunction

with

competitive

These systems usually divided into two


types:

Key success factors (KSF's) for CI


function

1. Systems

2.

developed

by

the

companies themselves often via

Defining KSFs (Key Success Factors) for

their information technology units

a CI unit is important in any industry

Purchased

(Singh, Fuld and Beurschgens, 2008). It

solutions

in

which

adjustments were implemented so

seems that the defense industry has

that they can give the answers

implemented these KSFs more than other

expected of them.

sectors:

The direction was to acquire and later

1. Organizational culture It is

adjust systems from the external software

basically the development and the

houses because solutions were often

implementation of broad CI

cheaper and enable internal information

awareness by policy of sharing of

systems units to focus on their core areas.

information, streaming from both

One of the challenges is to require of

sides from the CI to the internal

systems that interface with other systems

clients and from them to the CI

within the organization, such as CRM

function.

Opinion Section

105

2. Procedures - Mainly internal

intelligence cycle and by an easy

procedures guaranteeing the two-

access to the intelligence products

sided flow of information from

to those who need it.

external and internal sources and


making intelligence available to

The outcome using this methodology

those who need it to accomplish

was that decision making without the

their assignments.

contribution of CI was incomplete. These

3. Support by IT technology

three essentials were together critical for

Meaning the use of expert tools

the success of CI function in a corporation.

for

They all had to be interrelated as shown in

complex

demands

of

information attention, for the full

Figure 1.

Figure 1: KSF's

Organizational
culture

Procedures
Expert tools

Conditions to obtain needed information

partners and decision makers. It was


getting more complicated to acquire

The following figure (see Figure 2) has

information about R&D planning and

been prepared based on assumptions made

strategic planning while the most difficult

by CI managers in the Israeli defense field.

was to get information which could

It was looking towards two parameters

directly support to win tenders. The

one- the extent of the difficulties in

difficulties of maximizing the value of the

acquiring valuable information. The other

information were similar to those to obtain

one was the importance of the information

information.

received to significant decisions by the

function strived to cover these topics, it

firm. As we can see from this figure, it

was aspiring to obtain more valuable

was relatively easy to receive information

information

about customers, competitors, suppliers,

Although

(on

new

typical

CI

technologies,

Opinion Section

106

strategic planning, and tenders) which was

harder to accomplish.

Figure 2: Challenges of acquiring valuable information

Hard to get
Tenders
New technologies
Strategic information

Customers
Partners

Competitors

Suppliers

Decision makers

Easy to get
Insignificant information

Valuable information

Summarizing so far shows:

one of the key success factors of CI in this

CI units operated in the heart of the

sector.

business activity in the Israeli defense

The complex challenges for CI were

sector were involved in the decision

imposing on the structure of t CI in this

making process. Although there were

field. The results were often a combined

often significant gaps of the information

CI activity in the corporate level which

required,

give

actually directed the CI efforts while the

assessments that could bridge the lack of

business units have focused CI activity to

focused information. This was done by

answer their specific and often immediate

successful

needs.

CI was

expected

involvement

to

of

many

employees in the organization into the


intelligence

process,

beyond

the

immediate scope of the CI unit. There was


a good implementation of the discipline of
"Sharing of Information" (internally), as

Opinion Section

107

Decision making process by the

country. I.e. the allocations to air

customer

force against the needs approved


to the armored forces.

I have already pointed towards the

3. Hidden operational needs - What

importance of intimate knowledge of the

were additional needs that went

customers (including potential customers),

beyond those that have already

as a key success factor of firms operating

formally

in the defense sector.

additional components embedded

The following Key Intelligence Topics

in the proposal could give a

(KIT's) were guiding the intelligence

competitive edge.

efforts:

defined,

like

what

4. Special conditions and limitations


-

Certain

limitations

and

1. Knowing your customer - A close

conditions that were expected to

and an intimate knowledge was a

be part of the over whole deal like

must in order to be able to make

the

insightful decisions regarding the

manufacturing, collaboration with

solutions offered and to be able to

local contractors etc.

need

to

involve

local

reply precisely to the implicit and

5. Knowing the decision makers

explicit needs of the customer.

Who were taking part in the

Interpreting

decision

it

to

actionable

making

process

intelligence was the challenge of

especially in the final stage of the

CI in defense firms. This was

decision about the winner in the

probably impossible without a

competition.

cross- organization strategy by the

including influencers, approvers,

CI function. Growing number of

users and buyers (see Barnea

firms in this sector admitted that

2006).

there was no win in a competition

ongoing search for information

without valuable contribution of

that could be used to increase our

CI.

chances to win.

Key

Obviously

personalities

there

was

2. Customer's budget limitations -

6. Past experience with the customer

Estimating the over whole budget

- It was highly important to know

allocated for a defense project.

the past of our relations with the

This

customers

was

included

also

in

and

possibly

their

assessing the priorities inside the

relations with our competitors.

defense

Has this customer fulfilled his

establishment

in

that

Opinion Section

108

obligations? How the customer

executives in

this sector considered CI

treated his partners. His suppliers.

functions as follows:

Was that customer paying in time


according with the agreements?
History

of

artificial

obstacles

1. CI

functions

had

excellent

of

firms

understanding

created for unjustifiable reasons?

intelligence needs (or the specific

Sometimes

this

business units' needs) and were

information, there was a need to

centering their efforts to provide

look at the experience of various

competitive

sections in "our" company as

information.

customers
contacts

to

may
that

obtain

have
are

lots

of

2. CI functions were integrated into

unknown

the up to date priorities and had

internally to others.
7. Relations

advantage

been given resources that enabled

between

Israel

and

them to fulfill their missions.

foreign countries These relations

3. There was an ongoing effort to

had an immediate impact on the

assure that CI capabilities were

decision of the regulators whether

matched to the scope of their

to approve export of defense

KIT's

products to certain countries in

accordance

extreme

plans.

cases

when

it

was

assessed that it could harm the

and

were

executed

with

the

in

working

4. The value of the CI was assessed

security of Israel. I.e. Israel was

continuously

exporting to Turkey for many

executives

years as part of the close relations

contribution.

by
to

the

senior

maximize

its

between the two states. When

5. The resources allocated to CI had

these relations have been hurt, it

to be measured to make sure that

affected also on the volume of

shortage of resources will not hurt

export defense goods.

its activity.

Observations by senior executives of the

Conclusions

role of competitive intelligence


The recent global economic downturn
My continuous CI consulting with Israeli

since 2008 had only minor effect on

corporations

this sector.

The number of military

conflicts

is

indicates

that

senior

in

increase

Opinion Section

109

(http://www.globalsecurity.org/militar
y/world/war/index.html)
moderate

rise

in

global

and

position in the strategic decisions


a

defense

making process.
Many business defense issues could

expenditures is expected to continue in

not

be

met

effectively

and

the coming years jointly with the

accomplished

increase of the competition on each

implementation. In this sector's activity

governmental customer. Israeli firms

in Israel, CI considered an integral part

in the defense sector enjoy a high

of the organizational structure and its

reputation by their competitors and

business culture. Still there was a

customers for their CI professionalism.

tendency to keep the CI capabilities'

Not very much has been written about

secret, but this was in a swift change as

the role of CI functions inside defense

it became evident that strong CI

companies and their effectiveness in

capabilities were common in this

the fierce competition in this sector

sector worldwide as in many other

(see an example in the Journal of

competitive areas.

without

CI

Competitive Intelligence Management,


Vol.2, No. 4 2004), either worldwide

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