by Daniel Tkach

The senior managers of your company are establishing the long term business strategies of your company, and deciding on some tactical investments to support these strategies. On the next board meetings, the following issues will be analyzed: How does your company compare to its competitors? Which companies are most active in your company's area of business? What are the most promising new technologies related to your company? What is going on in related areas of research? Which governments are subsidizing the development of this technology?

How is it related to your company's international operations? As the company CIO, you need to provide actionable knowledge for the executive decisions. How can a knowledge management infrastructure help?

Competitive Intelligence is the process that converts disjoint competitor and market place information into relevant and actionable knowledge about the current positions and capabilities of the competitors, and about their future plans and likely behaviors under changing market conditions. The preferences and behavior of customers provide the context for understanding the impact that competitors and environmental change will have on the success of the business.

Text Mining of Patent Reports

A large part of the competitive information is publicly available in the form of text. Related patents, reports, newsfeeds, and web pages, provide an enormous volume of potentially useful material that is very hard to digest. For instance, one global company in the electronics industry that planned to establish manufacturing operations in Korea, needed to understand the trends in the research done by the local companies, to determine which areas were likely to be subsidized by the Korean government. A preliminary survey indicated that in the last year, 3881 patents were granted to the companies in the electronic industries. The printout of the patent reports was stacked in a pile of paper four feet high. To read these reports and obtain meaningful conclusions in the required time frame seemed to be out of the question. The company used then the text analysis technology available in the IBM Intelligent Miner for Text to solve this problem. The approach taken was to discover main areas of research by identifying clusters of patents, that is, patents that have common themes. In a short time the team was able to identify thirty three main research subjects, ranging from semiconductor manufacturing to LCD devices and multimedia enhancing hardware, as shown in Fig. 1. The next step was to present a meaningful map of the companies involved in each research area, indicating the number of patents awarded to each of them. Using the Intelligent Miner visualization functions, the clusters appeared as shown in Fig 2. The black lines indicate contextual links that represent relationships discovered during the clustering process. The graph displayed on a computer screen using this tool is an active image: by clicking on each cluster the user can have access to the list of patents that comprise each cluster, and by clicking on a patent on that list, the text of the patent is displayed.

Cluster Visualization

Knowledge Management for Competitive Intelligence

Knowledge discovery through text analysis is an important knowledge management technique. It helps the corporate analyst by finding important relationships that can foster new insights through clustering techniques, or simply by categorizing the information sources according to a useful corporate taxonomy. The analyst can thus find together all the sources relevant to the aspects of the competition or the market place she is interested in. Using the IBM Intelligent Miner for Text, the categorization of the documents is done automatically by the system after it is trained with samples from the desired categories. Although clustering can be helpful to discover possible categories, large enterprises find more productive to use their corporate developed taxonomy as the categorization schema.

Knowledge mapping is another key competitive analysis technique. A knowledge map used for competitive intelligence provides for instance a clear and easy-to-understand view of a competitor's organization. The knowledge map shown in Fig. 3 shows a series of nodes and links. The nodes are the key business elements of the competitor organization, gathered from the press releases and analysis documents available on the Internet. The links represent relationships among the objects representing the business elements, with each object playing a defined role in the relationship. Each object can have an associate behavior: when clicking, for instance, on the icon representing a document, we may open the document using a word processor, or linkto the web address (URL) where the document is stored. When clicking on a product icon, we can get a photography of the product, a catalog page, or a set of technical specifications.

A Competitor's Knowledge Map

People are important business elements and can be represented on a knowledge map. We can therefore build maps describing the boards of directors of several competitors, associated businesses and holdings. Knowledge maps can help us to discover unexpected relationships such as "who are the directors of our sister company that are also seating on the boards of subsidiaries of our competitors".

Competitive Intelligence is therefore another aspect of business knowledge, where presenting the right information in the proper context, that is, distilled and related to other sources of information and knowledge, helps a manager to get the insights to define the adequate market strategy or to act with the appropriate tactics. A solid knowledge management infrastructure supporting the organizational learning process, allows a company to leverage what it has learned and be a winner in the marketplace.

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Daniel Tkach is the IBM worldwide marketing manager for Knowledge Management Solutions. He serves as Technology Director at the Institute for Knowledge Management.