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Fighting for market share in any business sector can be as fierce as the backyard battles for seed between squirrels and birds.

That's why a North Buffalo company that makes a squirrel-resistant bird seed has been spending a lot of time honing its "business-intelligence" skills, keeping close tabs on what's happening in the retail and research arenas.

If the term is unfamiliar, don't feel bad. Experts estimate that only one in 10 companies have effective business-intelligence systems, and most of them are huge corporations. About 85 percent of the Fortune 500 companies now have competitive intelligence divisions.

But in this age of ever-changing technology and expanding global markets, a growing number of small businesses are recognizing the necessity of having structured blueprints for monitoring competitors.

Business-intelligence experts bristle when others use words like spying or espionage to describe their activities. They say they're more like investigative reporters, picking up clues from public documents, the Internet, classified ads, conversations with suppliers and by other means.

"This isn't espionage," said Ellen M. Reen, the business-intelligence manager at the Western New York Technology Development Center. "Everything can be done very ethically. In fact, we emphasize high ethical standards."

Ms. Reen previously served as business-intelligence manager at LucasVarity Inc. and was manager of technical information services at Bell Aerospace. These days, she helps smaller companies chart business-intelligence plans. One of her clients is CBN Inc., a company that was born from a simple premise: birds don't have taste buds.

In other words, bird seed that's coated with the mouth-singeing ingredient found in chili peppers doesn't phase diners of the feathered kind. But mammals have taste buds, so squirrels hate the coated seed. Just watch some of CBN's videos and you'll see the critters approach the spice-laden seed, then dash away without touching the stuff. Yet the coated seed remains organic and non-toxic.

CBN has offices on Great Arrow Avenue and employs seven people. It hopes to apply its capsaicin technology to other products. For example, farmers would no longer have to worry about rodents munching on rice, wheat and corn seeds if they were coated with chili pepper. The technology might even ultimately produce a corrugated box that is rodent-resistant.

CBN, which is affiliated with Snyder Seed Corp. and Squirrel Free Inc., currently has its birdseed produced in Ohio, but officials plan to keep production of spin-off products in Western New York. Although CBN has developed a unique niche,
President John H. Edholm said staffers aren't taking anything for granted.

"Business is war," Edholm said. "When you're at war, you need to know what the enemy is up to."

That's why he hired Ms. Reen to help polish the company's business-intelligence skills. Edholm said the $3 billion wild bird seed market is fragmented, with no fewer than 3,500 producers and packagers in the United States alone. He said no company has more than a 3 percent market share, so tracking the competition can be as tough as looking for a sunflower seed in a pile of hay.

While hundreds of strategies are used to monitor marketplace trends, Ms. Reen said business intelligence can be summed up in a sentence: It's all about developing a systematic process for creating knowledge of the competition, then crafting a strategic plan.

Ms. Reen said most businesses -- even smaller companies -- are already doing some sort of business intelligence, but don't recognize it by that name. Any time a CEO picks up an industry journal, attends a trade show or checks out prices in the advertisement of another company, the manager is practicing competitive intelligence.

"But the real challenge is setting up an organized, reliable system," said Ms. Reen. "There must be a process in place that will put bits and pieces of information into a bigger picture."

Some obvious starting points are the public library, major trade journals and the Web sites of competing companies. She said another helpful tool is a free Web site called CEO Express (, which offers a wealth of business-related information under one user-friendly Internet umbrella.

But intelligence gleaned from employees can be even more useful than computers. Some companies have spaces on their travel expense forms for workers to jot down tips they heard about competitors while in the field. They don't get reimbursed until the space is filled.

Other companies have set up special E-mail accounts or voice mailboxes to accept employee tips about competitors.

Still others are engaging in what experts call "quarterbacking," bringing groups of workers together for "huddles" where intelligence is shared.

Ms. Reen has also worked with Laser Photonics Technology, an Amherst company with 10 employees that is developing high-tech products that apply cutting-edge laser technology. One objective was to learn more about foreign companies that could eventually become business allies.

Ms. Reen said amassing this kind of information sometimes means searching dozens of sources. "People are always looking for the Holy Grail when it comes to information sources, but there's no one tool that will give you everything you need," said Ms. Reen. "It's more like putting together the pieces of a jigsaw puzzle."

Ms. Reen said she is among a dozen or so people in the area who belong to the Society of Competitive Intelligence Professionals. The not-for-profit group is based in Virginia and has more than 6,000 members in 44 countries. She also consults businesses on "counterintelligence strategies -- helping businesses to protect their trade secrets or successful strategies. The TDC will sponsor a forum on counterintelligence on Dec. 8.

Locally, about 20 managers from several larger companies have formed the Buffalo Business Intelligence Special Interest Group. They meet every other month to share information and discuss business intelligence plans.

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