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Page 1: Competitive intelligence in Cuba: Myth, reality, and perspective

Competitive Intelligence in Cuba:Myth, Reality, and Perspective

Eduardo OrozcoBiomundi Consulting, Business Intelligence Division,Institute of Scientific and Technological Information

EXECUTIVE SUMMARY

The present situation of competitive intelligence in Cuba is analyzed, taking thecorresponding situation in Latin America as antecedent. The possibilities of successfulapplication of CI in Cuba are studied along with the enterprise and socioeconomicenvironment (and their limitations). The main positive factors influencing enterprises areanalyzed: the economic opening; the strengthening of state-owned companies throughenterprise improvement activities; national systems for support of technologymanagement, intellectual property, and information infrastructure; as well as the Strategyfor the Computerization of Cuban Society and the National Policy of Information.These factors are considered to create the appropriate conditions for the successfulapplication of CI as a managerial tool for decision-making, and to contribute to aculture that supports the use of information in Cuban enterprises. © 2000 John Wiley & Sons, Inc.

The use of competitive intelligence as a management tool,although well known in large companies, is still uncom-mon in medium and small companies. Cubillo (1997) andOrozco (1998) previously studied the subject. In largecompanies, nevertheless, it is not a tool of universal useeither, even though its application started back in 1980. Infact, the lack of use of these tools has produced faults inthe performance of large companies, identified by Young-blood (1998), with the lack of understanding of the com-petitive dynamics by the leaders of these companies.

Cuba is making an effort to be inserted totally in theinternational market and simultaneously to keep the bestout of its socioeconomic system. In this case, the use ofthe management tools that allow Cuban companies tomake adequate decisions is a sine qua non condition ofsuccess. Many of these tools, nevertheless, are not easyto apply in Cuban conditions and, in fact, they are notwidely applied in many other countries either.

This article is an excerpt of an analysis of the ele-ments that will facilitate the use of CI, in the complex

Competitive Intelligence Review, Vol. 11(4) 79–87 (2000)© 2000 John Wiley & Sons, Inc.

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world of the contemporary Cuban company, for theshort and medium term.

The General SituationRodriguez and Castells (1997) studied the conditions ofapplication of intelligence processes in companies. Theyreached the conclusion that the difficulties of companiesregarding the implantation of intelligence mechanismscorrespond to four types of deficiencies:

➣ Corporate culture,

➣ Organizational structures,

➣ Management-related, and

➣ Lack of resources.

In a similar analysis, Dos Santos & Jannuzzi (1999)consider that the following factors favor the use of CItools:

➣ Greater facility of information circulation,

➣ Reducing bureaucracy in the different functions of thecompany,

➣ Flexibility of the hierarchical structures,

➣ Development of project management,

➣ Client–producer integration in the processes of productconception,

➣ Relation with other economic and scientific agents, and

➣ Technological monitoring and foresight.

Latin American SituationSeveral authors have studied the situation of CI in LatinAmerica. Cubillo (1993) conducted a study whose mainconclusions can be summarized as follows:

1. LATIN AMERICAN COMPANIES MUST DEVELOP A

BUSINESS INTELLIGENCE STRATEGY THAT

CONTEMPLATES:

➣ Creation and maintenance of external expertnetworks associated to the organization.

➣ Development, conservation, and professional up-date of the human resources of the organization.The practice of policies of stimulus to creativity,particularly for those dedicated to businessintelligence.

➣ Development of links with R&D organizations.

➣ Establishment of counterintelligence policies, busi-ness environment monitoring, and, simulta-neously, communication with and persuasiontoward the business environment.

➣ Development, conservation, and update of infor-mation resources (including technology).

2. BUSINESS INTELLIGENCE IS USUALLY FOCUSED

SLANTWISE OR ERRONEOUSLY, BY DIFFERENT CAUSES,WITH MANIFESTATIONS SUCH AS:

➣ Confusion between business intelligence and industrialespionage,

➣ Unnecessary accumulation of data and knowledge, and

➣ Company management incapable to exert the functionof business intelligence positively.

It can be seen that there is a high degree of coinci-dence between the difficulties that are mentioned byRodriguez and Castells, the factors that favor competi-tive intelligence according to Dos Santos, and the barri-ers to be saved by the Latin American companiesaccording to Cubillo (1993).

Additionally, Infoamericas, Inc. (1998) studied thesituation that faces those doing market research and of-fering consulting services in Latin America, which canbe characterized as follows:

1. Difficulties for the accomplishment of market research inLatin America are related to infrastructure factors,namely, little availability of market information and difficul-ties receiving updated information and value added servicesin:

➣ Governmental organizations,

➣ Business press,

➣ Industrial associations, and

➣ Internet Web sites.

2. Cultural factors also affect the possibilities to makegood market research, mainly those related to:

➣ The legal system,

➣ Patriarchal management,

➣ Crime and security,

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➣ Difficult access to deciders,

➣ Corruption, and

➣ Evasion of taxes.

3. COSTS OF RESEARCH TIME. There are several factorsinfluencing research time:

➣ Absence of secondary data,

➣ Telephone research is not very successful,

➣ Difficulties to accede to decision makers,

➣ Trips for interviews in large cities take a long time,

➣ The survey techniques that work well require verylarge samples, and

➣ More and more expensive focal groups are used toresearch the complete markets.

4. FACTORS OF DIRECT COST. High prices are foundin many services:

➣ Telephone fees and line installation,

➣ Consultants,

➣ Real estate,

➣ Hotel fees, and

➣ Trips.

A brief analysis of the internal difficulties of com-panies, presented by Rodriguez and Castells, indicatesthat they could be, largely, the cause of the externaldifficulties of the consulting services presented byINFOAMERICAS, so that both studies complementeach other suitably. The four studies quoted have ahigh degree of conceptual coincidence as far as theconditions of application of CI as well as the difficul-ties to do it.

The author’s personal experience confirms the pre-vious conclusion. Based on his professional relationwith more than 300 information professionals andbusiness people in several Latin American countries,in the period from January 1993 to June 1999, theauthor gathered information about their understand-ing regarding business intelligence. In Table 1, a listis given of the respondents’ countries of origin. Theresult of the author’s research regarding the generalsituation on business intelligence in Latin America isas follows:

The objectives and importance of business intelligencewere not well understood before the discussions.

The content and methods of CI are not known.

There is confusion between business intelligence and in-dustrial espionage.

The relation between information management and busi-ness intelligence is not understood properly.

The role of information management in organizations isnot properly considered.

Present Situation in CubaBioMundi Consulting, a Division of Business Intelli-gence of IDICT, introduced CI in Cuba in 1993. Sincethen, this organization has been offering CI services aswell as organizing courses, workshops, and seminars. Inaddition, the subject has become visible mainly in someinformation industry organizations as well as in researchprojects and in professional training. In Cuba, businessintelligence is a matter of study in specialization coursesfor information professionals as well as for master’s de-gree candidates. IDICT organized a Seminar on Com-petitive Intelligence in 1998 and a Cuba–BrazilColloquium on Organizational Intelligence in 1999. Atpresent, several entrepreneurial organizations have begunserious efforts for its application. A National Workshopon Business Intelligence, that will gather more than 200entrepreneurs, is to be celebrated in November 2000,organized by IDICT.

Table 1. Groups of Information Professionals (from Academic andGovernmental Organizations) and Small and Medium Entrepreneursin Group Discussions on Business Intelligence. (Ad Hoc Research on

the Occasion of Training, Workshops, and Conferences andIndustrial Association Meetings)

CountryPercentage

(%)

Costa Rica 16Cuba 63Belize, El Salvador, Guatemala, Honduras,

Nicaragua 5Jamaica 4Mexico 6Panama 6

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INFO *99: International Congress of Information and the Cuban–Brazilian Colloquium on Competi-tive Intelligence.Chronicle by Eduardo Orozco.

Since 1988, when the first International Congress of Information (INFO 988) was held, IDICT (Institute ofScientific and Technological Information, Cuba) has proven to have the necessary talent and power to success-fully organize a worldwide-class congress. INFO congresses put together information professionals with the wid-est range of interests: from librarians to CI professionals, in a sample that includes from juridical informationscientists to information technologists and information producers and distributors.

As in previous occasions, the venue for INFO 999 was the International Conference Center, Havana(October 4 – 8). More than 500 participants from 18 countries attended. The evidence that practically allprofiles of the information profession were included lies in the program itself. The INFO 999 general pro-gram included an exhibition of information products, services and technologies. Also, 12 commissions ondifferent topics of information science, technology, and management, various seminars, workshops andround tables, and the Cuban–Brazilian Colloquium on Competitive Intelligence.

The two-day Colloquium was organized and sponsored by Cuban and Brazilian institutes. The subjects were:

Organizational issues,

Tools for CI,

Practical experiences and applications, and

CI and knowledge management.

The speakers from Brazil, Cuba, Denmark, Spain, and the United States contributed about 25 presentations,including keynote addresses, research reports, case studies, tools developments, and so on. The contributions ofConsultorıa Biomundi (division of competitive intelligence of IDICT) and of Brazilian speakers were significant.Keynote addresses by Dr. Pedro Martin (Spain), Dr. Irene Wormell (Denmark), Dr. Irene Farkas-Conn (USA)and Dr. Raimundo Dos Santos (Brazil) were most welcomed by the audience. Organizers are looking forward torepeated success next year during the FID Congress in September 2000 in Brasilia.

The Organizing Committee for INFO 999 and the Colloquium on Competitive Intelligence thank the spon-sors, which definitively contributed to the success of the Congress.

The MythA myth exists on the application of CI in Cuba, withtwo extreme manifestations. The first is that the cen-trally planned economy does not admit the use of CIbecause it does not need it. This assumption has beensustained by those that do not know well the essence ofCI and by those that do not know the Cuban economy.This extreme has been expressed to the author mainlyby foreign specialists. The other end of the spectrum issustained by those extreme optimists who consider thatthe process of economic opening in the country pro-vides all the necessary conditions for the successful ap-plication of CI. This approach is simplistic. It does notconsider that the CI process involves difficulties of dif-ferent types in its relation with the organizations in its

immediate surroundings (competitors, suppliers, and cli-ents) as well as with those of the outer surroundings(economy, society, regulatory organizations, and inter-national political situation).

A MYTH EXISTS ON THE APPLICATION OF CI IN

CUBA, WITH TWO EXTREME MANIFESTATIONS.

The RealityThe Cuban reality, as for the possibilities of applicationof CI, is in many aspects very similar to the situationdescribed earlier in the four aforementioned studies(Rodriguez & Castells, Cubillo [1997], Dos Santos &Jannuzzi, and INFOAMERICAS). This has its root in

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the fact that as a new management tool, its applicationdepends on many factors, such as:

➣ Human resources and the degree of acceptance or reluc-tance towards new disciplines and techniques,

➣ The professional skills of staffs, and

➣ The socioeconomic organization in the country wherecompetitive intelligence is used.

When doing a comparative analysis based on an ex-pert’s criteria about the applicability of mentioned ap-proaches to the Cuban situation, the following resultswere obtained:

1. Eighty-three percent of the situations described by Ro-driguez and Castells are applicable to the Cuban situ-ation, mainly the ones related to:

➣ Deficiencies in the informational culture in theenterprise atmosphere,

➣ Deficiencies in the organizational culture and themechanisms of enterprise management, and

➣ To a lesser extent, ignorance of the processes ofstrategic information.

The weakness of the necessary infrastructure for theadvantageous use of strategic information and the diffi-culty for allocation of resources was less important, ac-cording to the expert’s criteria.

2. Thirteen percent of the situations described by Rodri-guez and Castells do not apply to the Cuban situa-tion. This is explained by the following facts:

➣ Cuba is carrying out a strong process of aware-ness and qualification in the use of information.

➣ Important efforts for information protection havebegun.

➣ The most important Cuban organizational pat-rimony is the existence of a strong intellectualcapital.

3. Four percent of the situations behave only partially asdescribed by Rodriguez and Castells because althoughstill insufficient, strong investments are made in infor-mation technology for diverse uses.

As far as the analysis for Latin America made by IN-FOAMERICAS, the comparison is as follows:

1. Fifty-two percent of the situations are similar to whathappens in Cuba, mainly in relation to the elementsthat those authors name “infrastructure” and “timeand cost.”

2. Thirty-one of the situations do not apply in Cuba,mainly those related to the cultural aspects and, to a lesserextent, the ones INFOAMERICAS name “direct cost.”

3. Seventeen percent of the situations happen in Cuba ina different way, mainly those related to “direct costs,”due to differences between Cuban socioeconomic systemand the ones in the rest of Latin America.

Other studies related to specific aspects of businessintelligence, like industrial property and business intelli-gence in an economic sector, were carried out. Santos(1999) concluded that the use of the potentialities ofindustrial property is still poor and that entrepreneursneed a more accurate strategy in this field. Garcıa (1999)studied business intelligence in tourism. She concludedthat the majority of clients of business intelligence ser-vices/products, in a sample of tourism entrepreneurs,identify it mainly with competition monitoring.

The Cuban PerspectiveThe difficulties that exist in Cuba for the application of CIalso are in Latin America. The question arises: Does achance of success exist for the application of CI in Cuba?

Cornella’s general model (1994) on company infor-mation needs locates clients, suppliers, competitors, dis-tributors, regulators, and financing sources close to thecompany. The actors of politics, economy, technology,and the society are located in the outer surroundings.This model facilitates an appropriate approach to studythe possibilities of success mentioned earlier. In fact, theelements included by Cornella can be approached differ-ently in different countries. Next, we discuss how to usethis approach in Cuba to determine the most importantforces interacting with and around the Cuban enterprise.

Several factors exist in Cuba that favor the applicationof CI tools that benefit the Cuban state-owned enter-prise. Theoretically, these factors are mainly located indistant surroundings according to Cornella’s model, butthey influence companies directly due to the Cubansocioeconomic organization. They include thefollowing:

➣ The Economic Opening Process

➣ The System of Science and Technological Innovation

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➣ The National Policy of Information

➣ The Strategy for the Computerization of the Cuban Society

➣ The Entrepreneurial Improvement System

The Economic OpeningThe primary objective of the Cuban economic openingis to cause the insertion of the national economy intothe world one. It is based on three fundamental supports(Rua & Monreal, 1993):

➣ The promotion of foreign investment,

➣ The reorientation of foreign trade, and

➣ The development of the international tourism.

The promotion of foreign investment has the follow-ing main manifestations: diversity of business options,business approach and open focus of negotiations, fiscalincentives, constitutional guarantees, flexible approach ofownership percentage, and financial facilities and guar-antees. The reorientation of foreign trade looks for thediversification of markets, products, and services and theelevation of the competitiveness of the exportable offer.The development of international tourism is mainly ex-pressed through the construction and development ofhotel infrastructure, the diversification of the tourismmodalities, and the promotion and marketing of thetourist offer anywhere in the world.

The execution of this policy inserts Cuban compa-nies, and the Cuban-based foreign companies, in thechanging competitive dynamics of the marketplace men-tioned by Youngblood:

➣ “. . . the emergence of new competitors with new technol-ogies;

➣ Shifting demographic patterns;

➣ Changes in consumer spending and lifestyle trends; polit-ical upheavals; the opening of new markets . . .”

According to the Youngblood, these are some of“the forces that shape change, putting new challengesand opportunities” to the Cuban enterprisedevelopment.

Science and Technological Innovation SystemIn May 1998, the Ministry of Science, Technology, andEnvironment, (CITMA, 1998) released the bases for thestrategic projection of the Science and Technological

Innovation System in Cuba. In its mission, the Systemconsiders itself as to be “a dynamic element of the so-cialist and sustainable development of the country . . .by means of the generation, transfer, assimilation, adap-tation, diffusion, use and commercialization of scientificand technological knowledge.” Thus, the System mustcontribute decisively:

➣ To elevate the efficiency of the national economy,

➣ To increase the people’s quality of life,

➣ To increase and to diversify exports and to replace im-ports,

➣ To develop the culture of Science and Technology-basedproduction,

➣ To create conditions to assimilate, and

➣ To develop new technologies and other objectives.

The document establishes the necessity of planningthe scientific activities without contradiction with theincreasing need of use of the techniques that ease thecompetitive introduction to the market of research out-puts. Complementarily, the document establishes that“technological innovation must be an important part ofthe strategies of the production and service sectors andtheir companies ” (CITMA, 1998, p. 30). In the con-temporary world, the previous statement is fulfilled effi-ciently by companies only if the mechanisms of CI areused. To that aim, the System of Science and Techno-logical Innovation counts with several resources. Threeof the most important are:

The National Information SystemIt coordinates and conciliates the interests of Cuban in-formation organizations. The System has a national pro-jection not only through the State central administrationbut also by means of the network of Provincial Infor-mation and Technological Management Centers, led bythe Institute of Scientific and Technological Information(IDICT), belonging to the Ministry of Science, Tech-nology, and Environment. IDICT has introduced to thecountry information technology advancements and con-ceptual and methodological developments that propitiatethe offer of value added information services in generaland particularly the offer of CI services. IDICT worksclosely with the institutions responsible for informationtechnology advancement and computerized informationnetworks, whose efficiency is key for CI.

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Technological Management and EnterprisesThe Center of Management and Technological Innova-tion (GECYT) leads the processes of innovation man-agement with an integral approach embracingtechnology, strategic marketing, human resources man-agement, and introduction of new economic and man-agement tools. GECYT is contributing to create closelinks between Cuban entrepreneurship and contempo-rary management techniques, and also participates ac-tively in the professional approach of the activities of theEntrepreneurial Improvement System (Faloh et al.,1997).

CounterintelligenceThe Cuban Office of Industrial Property (OCPI) estab-lishes the mechanisms for the protection of the intellec-tual capital of organizations and leads the national effortfor the correct use of the elements related to industrialproperty. OCPI, in addition to the essence of its missionas a registry office, offers information and consultingservices. The Office owns a huge collection of patentand trademark information serving not only Havana butprovinces as well. OCPI offers a company-oriented ser-vice while accomplishing a strong educational program.

The National Policy of InformationThe National Policy of Information (Polıtica Nacionalde Informaciın, 1998) begins from the fact that the strat-egy of development of the Cuban economy is based onthe elevation of the economic efficiency, the decentrali-zation of the economy, the development of self-financ-ing schemes, and the Entrepreneurial Improvement, aswell as the fortification of control mechanisms by thestate. The objectives of the Policy are in fact essentialbases for the existence of serious and professional ser-vices of information that make possible the implantationof mechanisms of CI in organizations. In general, theyare:

➣ The creation of the national infrastructure of information,

➣ The impulse to the production and distribution of na-tional sources of information,

➣ To contribute to the satisfaction of the national demandfor information,

➣ The operation and development of computerized informa-tion networks,

➣ The insertion of the country in the world informationindustry,

➣ The training of necessary human resources, and

➣ The promotion of the informational culture of the society.

The National Policy of Information studies the maindifficulties for the constitution of a national informationindustry. When analyzing these difficulties, a similarity isobserved to those already mentioned by Rodriguez andCastells, Cubillo (1993), and INFOAMERICAS. Thesame document proposes an assembly of strategies forthe solution of the problems identified, which turns thepolicy into one more tool in the alliance to obtain thesuitable conditions for the application of CI in thecountry.

The Strategy for the Computerization of the Cuban SocietyIt is known that insufficient computerization is one ofthe greater barriers to reach efficient and effective CIsystems, because of its negative incidence for obtainingprecise and reliable data in reasonable terms. Computer-ization has been identified as one of the difficulties inLatin America in the analyses reviewed earlier. The Cu-ban government recognizes the necessity to reach higherlevels of computerization (understood as the joint use ofinformation technology, telecommunications, and themethods and processes for compiling, processing, anddistribution of information). Thus, it has approved astrategy for the computerization of the Cuban society(Lineamientos estrategicos . . . , 1997). Its general mis-sion, as well as the System of Science and TechnologicalInnovation and the National Policy of Information, rec-ognizes in the the importance of the increase of theeconomic efficiency and enterprise competitiveness.

The strategy is specific as far as the channels to ex-tend and to improve the use of computerized informa-tion services and the implantation of computerizedinformation systems in the enterprise sector and publicadministration. These are pillars of the information sup-ply for CI. This way, the mentioned strategy . . . be-comes an ally for the successful application of CItechniques in Cuba.

The Entrepreneurial Improvement SystemThe Entrepreneurial Improvement System of the Cubanstate-owned company is the mechanism that will pro-duce the change of those companies toward more effec-tive and efficient and definitively competitiveorganizations. The “entrepreneurial improvement is aprocess of continuous improvement of the internal man-

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agement of the company, making it possible to obtain,systematically, a high performance in production andservices . . . ” (Grupo Gubernamental, 1999). Then, it isobvious that the main motivation for the use of CI inthese companies is the same one in any country: to bereally competitive.

The Entrepreneurial Improvement System approachesthe need to use CI mechanisms by companies by twomeans:

➣ The creation or improvement of internal information sys-tems, and

➣ The linkage of enterprises to the Science and Technologi-cal Innovation System, the National Policy of Informa-tion, and the Strategy for the Computerization of theCuban Society.

This way, the Cuban state-owned company has theappropriate conditions to obtain the necessary informa-tion and knowledge levels for timely decision-makingand competitiveness.

The perspective of Cuban organizations for the use ofCI is positive, real, and sure. This does not dependsolely on market forces but also on coordinated mea-sures fueled by the government and different actors ofthe society. Sooner, rather than later, the Cuban compa-nies will have suitable conditions to use CI and thenthey will need to depend on themselves to be reallycompetitive.

ConclusionsThe barriers that companies face for the implantation ofCI tools correspond to four types of deficiencies: cul-tural, organizational, management-related, and lack ofresources. These difficulties appear in Latin America andin Cuba, with differences because of their different so-cioeconomic systems.

➣ Two opposite approaches exist as far as the application ofcompetitive intelligence in Cuba:

1. CI cannot be applied because of the centrally plannedeconomy, and

2. It is very easy to apply CI in Cuba because of measuresthat the country has taken in the economic field.

In fact, CI is applicable in Cuba, but difficulties existsimultaneously with the ways to overcome them.

➣ Cuba has taken important measures in its socioeconomicdevelopment that simultaneously become tools allied to

the possibilities of application of competitive intelligence.These tools are:

➣ The economic opening,

➣ The Science and Technological Innovation System,

➣ The National Policy of Information,

➣ The Strategy of Computerization of the Society,and

➣ The Entrepreneurial Improvement System.

ReferencesCITMA [Ministry of Science, Technology, and Environ-

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en Cuba. Bases para su proyeccion estrategica. Havana: Edito-

rial Academia.

Cornella, A. (1994). Los recursos de informacion. Madrid:

McGraw-Hill/ESADE.

Cubillo, J. (1993, July–September). Inteligencia empresarial: Es-

trategias e interrogantes en America Latina. INFOLAC, 6(3).

Cubillo, J. (1997, March). La inteligencia empresarial en las

pequeas y medianas empresas competitivas de America Latina.

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About the Author

Eduardo Orozco is currently director of BioMundi Consult-ing, Business Intelligence Division of the Institute of Scien-tific and Technological Information (IDICT) Cuba. He hasmore than 20 years of experience in information science. Hehas worked as a consultant for different organizations inCuba and abroad, and has been an invited professor atvarious universities in Latin America. He can be reachedat Biomundi Consulting, 200 no. 1922, Atabey,Playa, La Habana, Cuba; tel: 153-7-212823; fax:153-7-336529; e-mail: [email protected].

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