Finding business information on US corporations: a guide for non-US companies targeting the US market.

Charles Klein, Managing Partner, Amcon Marketing Strategy International, chuck@amconmarketing.com .


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Summary: If you are one of the many non-American managers, consultants, or government officials seeking competitive intelligence on US companies, there are many tools available to aid in your efforts. While more secondary information sources are becoming available, much of the critical information can only be found through interviews with industry insiders based in the US. Sound business decisions should be based on good business intelligence. Chuck Klein encourages non-American researchers to go beyond the Internet for competitive information.

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Due to its size, wealth and acceptance of foreign made products, the United States (US) market is an ideal target for many non-US companies seeking export sales opportunities. One of the first steps in entering this lucrative business arena is to look closely at your US competitors, their products, and their corporate strengths and weaknesses.

Non-US companies pursuing American sales penetration face special obstacles, concerns, and challenges including:

• Location: these companies are based very far from the target market. This distance creates major obstacles in truly understanding the business environment and operations of their competitors.
  
• Language: with a few exceptions, most exporters to the US are from countries where English is not their mother tongue. This creates obstacles and barriers in their intelligence gathering efforts.
  
• Cultural differences: while American culture is widespread around the world, from television, movies, the Internet and other factors, there are still many major cultural barriers between non-Americans and Americans.
  
• Fear of the unknown: Non-American managers often take the attitude, “we are not yet ready for this major market."

Non-American managers interested in obtaining business intelligence need to recognize the real as well as perceived obstacles that must be overcome in their search for information on US companies and markets.


Who is seeking US business intelligence?

A wide range of individuals based outside of the US regularly seek US business intelligence information. They include:

• Exporters to the US.
• Potential exporters.
• High tech entrepreneurs.
• Venture capital fund managers.
• Investment bankers.
• Government trade officials.
• Trade development organizations.
• Chamber of Commerce employees.
• Importers of US products.

Yet, from our experience with many non-US companies and organizations, most barely scratch the surface in obtaining the available outstanding business intelligence data. They often lack the skills and experience to understand their intelligence gathering options, usually depending exclusively on the Internet and on-line data base searches. Unlike US information users who have access to all sorts of human/networking sources, these non-Americans give up easily, making statements like: “if it is not on the Net then it must not exist” or “they are a privately held company so you can’t find anything anyway."

While not everything is readily available with a few clicks of the mouse, there is far more information than many non-American researchers believe. As long as the company you are targeting is in business – and has employees, former employees, customers, suppliers and competitors – it is very difficult for them to hermetically seal themselves from the outside world. Remember that whenever sales are being made and business is being transacted, information is being transferred and can ultimately be found.

In the following paragraphs, I will discuss the types of US business information that managers typically need, and then review possible information sources and data gathering methods.


What types of information are they seeking?

As we frequently conduct competitive intelligence seminars with non-American business people interested in the US market, we ask participants what types of information they are seeking. Their collective “wish list” usually includes the following:

• A profile on all companies (US and non-US) operating in the field of interest.
• Copies of their promotional and technical collateral material.
• Competitor sales (total and particular product lines or market channels).
• Competitor strengths and weaknesses as perceived by themselves and by the market.
• Pricing and pricing structures. When are discounts given? How extensive are the discounts?
• Competitor positioning in the market and current marketing strategy.
• Plans for new products, new markets, or new marketing methods.
• Distributors and reps working with the key competitors.
• Offices, warehouses, and key channels of distribution.
• Personal and professional background on key managers.
• Promotional methods used by competitors and information on how much they invest in promotion.
• The names of trade shows where they exhibit and publications where they advertise.
• Perception of non-American companies in the target market.

So now the question is – where can you find the answers?


Secondary vs. primary information sources

There is much US business information available from secondary sources (trade associations, trade magazines, government records, court records, Internet sources). They can uncover a wealth of information. But in most cases, good intelligence information comes from a combination of secondary and primary information sources.

The distinction between secondary sources (existing published) and primary sources (interviews and feedback from people in the market) is well known. Our experience has shown time and again that a major reason for failing to obtain needed US market intelligence information is beginning and ending a search with secondary sources, primarily the Internet.

Generally, especially for non-Americans, secondary sources are faster, less expensive, and easier to access. However, depending only on secondary sources limits your ability to get the information you truly need to make intelligent business decisions. In essence, it is a self imposed research limitation, kind of like running a race on one leg.
 
Primary sources – where the action is

Due to an overall open attitude toward business information in the US, intelligence experts, alongside marketing managers, are often very successful in conducting interviews that turn up outstanding information. Once again, the non-Americans are at a severe disadvantage as it is far more difficult conducting US interviews from Paris or Hong Kong as compared to doing them from Chicago and Phoenix.

Primary sources of competitive intelligence information are endless but some of the better ones include:

• The target company.
• Distributors and independent sales representatives in the industry.
• End users of similar products.
• University professors.
• Trade association employees.
• Trade magazine editors and writers, especially freelance writers.
• Competitors of your target company.
• Former employees at companies that compete with the target.
• Government and labor union employees.
• Staff at companies who are suppliers to the target.
• Business journalists based near the target company who cover its activities.

 
Accessing secondary sources, followed by interviews with primary sources, is a powerful combination. Used successfully, it is an excellent tool in obtaining intelligence data.


Public vs. privately held companies

Your ability to obtain business information is impacted by whether the company is 'public' (traded on a stock exchange), or 'privately held'. US public companies must meet strict reporting requirements, submitting critical data such as 10K reports to the Securities and Exchange Commission (SEC). Once reports are submitted, they become a matter of public record and can be accessed by anyone via the Internet. Furthermore, once a company is public, it is tracked by analysts as well as an array of Internet company research sites, leading to substantial information being disclosed. Privately held companies have no such requirements. They have no obligation to publish their financial statements nor report on their operations.

Based on the above, one may think that everything you need on public companies is available and that nothing or very little can be found on privately held firms. However, such a conclusion is often incorrect.
 
While public companies need to disclose substantial information, often they quite successfully hide the type of data you are seeking. For example, we were recently researching a small division of a Fortune 500 company. The division we were targeting was not even mentioned in their 10K reports and other public documents. Thus obtaining information on their sales, profitability, products and marketing strategies was impossible even though they are publicly held. We ultimately interviewed several former employees of competing companies who were able to provide substantial information. The secondary research failed – the primary research succeeded.
 
While researching privately held US companies can be challenging, information can be found from both secondary and primary sources. As an example, a privately held US company we researched was receiving funding from the government in the state where they are located – many US states provide incentives to encourage companies to move into their state. Their funding application was a matter of public record and included many details on their operations not available elsewhere. Subsequent primary interviews with industry insiders such as a business journalist at a local newspaper, independent sales representatives, and the company itself helped expand our information base.
 
Putting together a profile on a US company is like a puzzle. You gather many pieces of information from a variety of sources. After a while, a clear picture begins to emerge.


Using industry insiders  

One of the keys in using primary sources is utilizing industry “insiders." Non-Americans seeking marketing intelligence in the US often lack the business network available to them in their home country. In most industries it is relatively easy to find industry insiders who are willing to help. More importantly, there are many consultants and others with extensive contacts in your industry who are willing and interested in seeking needed information. Finding industry experts in the US is easier than in any other country in the world. 
 

Is all this legal?

Non-American researchers focused on US companies should be cautioned to operate within legal and ethical boundaries. In reality, so much information is available through legal means that taking illegal actions does not make sense.

Managers collecting information in the US should be aware of two laws that may impact their efforts. The first is the Economic Espionage Act, passed in 1996, which defines many areas of economic espionage as a criminal offense. If convicted, offenders can be sentenced to 10 years in prison and fines of up to $500,000 for an individual and $5,000,000 for a company can be given. While an in-depth review of the law is beyond the scope of this article, it relates to actions such as illegally securing marketing plans, customer lists, product information and other sensitive data.
 
On the other hand the United States “Freedom of Information Act," (FOIA) originally passed in 1966 with amendments in 1974 and 1996, requires the Federal Government to allow access to vast quantities of information, some of which may be useful in your research. Access is not limited to US citizens. The 1996 amendments are especially interesting as they require the Government to provide more and more information electronically, such as on the Internet, CDs, or other digital formats.

Ironically, FOIA is an absolute blessing to those people involved in CI who are based outside the US. In the past, accessing certain types of US government records required someone to physically go to the appropriate office in Washington or elsewhere. Now, more and more information is available on-line, aiding 'foreigners' in their efforts to compete against US corporations.

 
Conclusion

If you are one of the many non-American managers, consultants, or government officials seeking competitive intelligence on US companies, there are many tools available to aid in your efforts. While more secondary information sources are becoming available, much of the critical information can only be found through interviews with industry insiders based in the US. Sound business decisions should be based on good business intelligence. Thus non-American researchers are encouraged to consider going beyond the Internet when the information they need is not found by clicking their mouse.

Remember that gathering intelligence data is like making soup:
 

• It takes time to cook.
• It needs many ingredients.
• It can be done at home or ordered from a professional.

Background:

Charles Klein is managing partner of Amcon Marketing Strategy International (www.amconmarketing.com ). He is an expert in US marketing for non-US companies and is author of the widely distributed book Marketing to America: How non-US Companies Can Profit by Selling in the USA , published by Financial Times/Prentice Hall. Charles has conducted seminars and workshops worldwide and provides tangible consulting services to non-US companies focused on the US market. When not working or traveling, he can be found discussing international politics or teaching non-Americans the intricacies of professional baseball (Cub's Fan).
 
 
Copyright Society of Competitive Intelligence Professionals.
 
SCIP.online, volume 1 number 11, June 18,2002.