5: All the World's a Trade Show Stage
The author drops the name of a leading trade-show consultant, who asserts that 72% of firms "regularly" use trade shows to gather competitive intelligence about their competition. Companies present a lot of information about themselves at trade shows: brochures, marketing briefs, and press releases are available in bulk, primarily for prospective customers and the industry press, attempting to bolster their images by touting their strengths and future plans. As such, trade shows are fertile grounds for gathering intelligence on the competition.
Scouting Redux
The author uses another anecdote, of a company that sends people to the consumer electronics show (CES) in Vegas each year. The company doesn't have a booth of its own (being a component supplier that is of no interest to consumers, who are the target audience of the show)
His people "work" the show by attending the conference as if they were customers, gathering information about what suppliers (particularly small and aggressive technology firms) are shilling, often with the notion of creating customer demand for a product they can't afford to manufacture before orders come in. By identifying their future needs, his company gains a "jump" on the competition, a sense of whom to approach well in advance, so that they will have a foot in the door when the time comes.
His firm also seeks partnership arrangements rather than sales to a consumer, as this relationship gets them more closely involved, and gives them more access to information about future planning. There's some risk in "partnering" with a weaker firm, but the reward for that risk is greater loyalty from the firms that will essentially "buy" their product with a cut of the profits. Instead of a vendor-buyer relationship, this approach creates a much stronger business relationship that forefends against competitors winning the "next" order by offering price incentives. To smaller firms, the approach of a larger firm that wants to work with them is more appealing than a salesman looking to get them to buy.
They also keep an eye on their competitors - some of whom have booths (making it easy to observe who comes and goes), others of which "work" the booths of their customers in an attempt to wean them away.
In addition to competition, this activity also provides a broad overview of the industry. Are new firms appearing on the expo floor, or is the number of exhibitors shrinking? Are the people at the booths marketing people, or more skilled professionals who (presumably) have spare time because the company hasn't much real work for them? Which parts of the industry seem to be growing or shrinking?
In effect, this strategy comes down to scouting an intelligence gathering, in an environment where most companies are simply there to engage in buying and selling - and while it has less impact on the short-term revenues of the company, it has great potential for its long-term competitive success.
Smile for the Camera
The author mentions a show in Bologna, Italy, in which a large number of Chinese attendants were walking around and chatting with everyone, and "seemed to" have small cameras in their breast pockets - they were recording video and audio of the entire event, as a method of industrial espionage.
To discourage such behavior (and put exhibitors at ease), many conventions post signs suggesting that photography or videotaping is not permitted. In most locations, they have no legal authority to forbid or prevent it (though Europe is more stringent than the USA) and the suggestion is seldom enforced. Even where signs are posted, you can see individuals with cameras covering the event (EN: and with cell phones and other small devices, the problem is probably more widespread and harder to detect).
Even without gadgetry, it's entirely possible to use lenses to photograph trade booths from afar (in locations where the shooter isn't technically on the floor), and people regularly roan the floor with obvious cameras, even asking for permission to photograph exhibits (and exhibitors, assuming them to be with the press, readily grant an OK).
The author notes how easy it is to do this: to wander up to a booth without identifying yourself, make some small talk, and collect quite a lot of information about a competing firm. Most booths are staffed with junior employees, who will disclose more than they should, and even when more seasoned staff are there, you can catch the juniors when they are away hobnobbing with their more valued customers or attending a presentation.
He notes a practiced routine: to dress too casually, then have an associate in more formal dress strike up a conversation with him and mention competing products, and which point someone working the booth would rush in and start gushing information. It's a simple, but very powerful tactic, and works on several levels: embarrassment, defensiveness, competition, etc.
Corporate Espionage
The author mentions the pork products convention in Dallas, a trade show with a very casual, almost fair-like atmosphere at which everyone has a grand time, and the "fun" of the event keeps attendance high and a lot of business is done in a friendly and open manner.
In particular, he notes that the "no photographs" signs are written not only in English and Spanish, but also in Japanese, as Japan has one of the most advanced government-sponsored corporate espionage operations in the world. The Japan External Trade Organization (JETRO) is the "gold standard" in business intelligence; and attend loads of industry events to gather significant amounts of business intelligence for use by domestic industry.
Their presence at this particular convention seemed odd: Japan isn't a major pork producer, but it does import a lot of pork products and seeks to gain an advantage as a consumer, rather than competitor, in this industry.
Customer Intelligence
The author tells the story of "Dashboard Devices," a group of electronics geeks who, as a hobby, developed designs of computer devices that could be integrated into an automobile. Eventually, they recognized it had commercial potential. They worked up a functional prototype and took it to a trade show to solicit consumer input
(EN: This goes on for a while, but the point is that the firm got lots of intelligence from prospective customers, but also from other people in the industry who thought it was a nifty idea, and couldn't resist the urge to share ideas, which DD could then use for free in evolving the device toward a viable consumer product. The bottom line seems to be that you don't necessarily need to shy away from trade shows, and there are good reasons for taking the risk of exposing your ideas with possible competitors.)