All ACI programs teach students how to overcome the most challenging competitive intelligence issues. The following are sample lessons taught in:

Problem Sets

Value Chain Analysis

Finding a Source of Competitive Advantage
From Where Inside Its Operations Does a Rival View Its True Value
How Much Cost Analysis is Enough - and When Do You Know?

1. Finding a Source of Competitive Advantage
The Pharmaceutical industry's profitability (operating income/assets) over the period 1988-1995 was around 25%. During the same time period, Motor Vehicle industry average yield was about 4%. Drug stores generated 12%.

Within the Pharmaceutical industry, J&J's Operating income/assets ratio during that time period was 39%. Schering Plough, 35%. Abbott was 22% and Rhone-Poulenc achieved 13% only. Genetch was even worse (4%).

Questions
1. What explains such persistent differences in profitability? Does the same analysis fit both examples (industries and companies)? If not, what is the difference in explanation?
2. What is the source of competitive advantage (what's behind the empty slogans)?
3. Is creating and sustaining competitive advantage the same? How can your competitors sustain their advantage? How can your company?
4. How can you use the Value Chain template to analyze your company's cost vs. competitors? What does it tell you about your company's sources of competitive advantage? What conclusions would you draw for management?

2. From Where Inside Its Operations Does a Rival View Its True Value
Airborne Express is a small carrier surviving the giants in this industry, FedEx and UPS. To understand how it can do that, you should draw an activity map, comparing the three companies. If you do that, you find out Airborne has, for example, a manual sorting operations, compared with FedEx and UPS' fully automated hubs.

Questions
1. How does a manual operating system deal with FedEx and UPS' scale advantage?
2. How does Airborne's manual operations fit in with the other activities in Airborne's whole value chain?
How does Airborne achieve higher capacity utilization on its flights than its competitors? Why is that important in analyzing Airborne's strategy?

3. How Much Cost Analysis is Enough - and When Do You Know?
If you can benefit from analyzing your competitor's P&L to arrive at its relative cost (dis)advantage, start with your own P&L, then move to the competitor's based on public and industry data. Identifying cost drivers associated with the activities you analyze on the P&L is crucial to analyzing differences between your company (or unit) and your competitor's. Assigning cost figures follows the identification of cost drivers, and the assessment of how your competitor is affected by them relative to your own company.

Questions
1. Do you analyze all the hundreds of a competitor's activities? A subset of activities? Which subset should you concentrate on?
2. How detailed is the analysis? What data do you use? Where do you get these data? What if it is a private company?
3. If you have no strategic option to act differently on a cost driver, does it matter? For example, if all the rivals produce in plants located in the same region, is the manufacturing location a cost driver?
4. How does relative cost analysis lead to better competitive positioning?