A competitor's decision to divest a business unit, decrease production capacity or simply to cut a product area, channel, customer segment, or geographic region could have a major impact on your business. It makes sense to be aware of the signs that your competitor is implementing such a plan.
Some of the clues will be apparent from casual observation; others require some form of active competitive intelligence research. First, the more obvious indicators, which may be revealed through secondary literature searches, salesperson conversations with customers and prospects, and even the company's own announcements:
- Operational changes on the production floor. Outward signs may include the hiring of a consulting firm, laying off of employees, or sale of equipment.
- Layoffs. Beyond the production employees, there may be a cross-section of employees who are let go. Be alert for increased volumes of unsolicited resumes hitting your hiring officers' desks.
- Reduced commitments with suppliers. Casual conversations with suppliers may reveal a planned major reduction in purchase volumes from one of their other customers (a competitor of yours).
- Abandoned customers. Salespeople may report increased call-ins from customers, who may suddenly be feeling abandoned.
There are also some less obvious clues that a competitor has waning interest in a business unit, product line, or segment. In-depth research may be required to gather the insights needed to confirm or refute these indicators:
- Shifting corporate strategy and intent. Conversations with various levels and departments within the organization can reveal the corporation's key strategic tenets. A sudden change in strategy is a clue that they are placing less emphasis on a particular aspect of their business.
- R&D focus changing. Professional researchers can develop conversations with R&D personnel to learn about their focal areas. A change in focus may be an indicator of a strategic shift.
- Brand changes. Announcements that a Company is hiring an ad agency or brand strategy consulting firm may warrant more in-depth conversations with marketing and branding personnel to learn if a particular product, business unit, or segment is being cut in some way.
- Acquisition intent. Professional researchers can inquire to the board level about the parent company's commitment to the business. By asking if the board would consider a sale of the business, or by asking about their interest in pursuing their own acquisition, researchers may learn the rationale behind a positive or negative response to the acquisition question.
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Cancellations of permitting requests. For some business units or products, ongoing public permits are required to purchase or transport hazardous materials. Or they may have intended to extend a rail line, add a major water line, electrical capacity, etc. If the permits for these projects are suddenly cancelled, the Company may have decided to cancel a major project.
While some of the above indicators are obvious, others require some real sleuthing on the part of professional research firms. Acclaro Growth Partners has experience in conducting competitive research and analysis. We understand the motivations behind specific tactical actions that can be revealed. For more information, visit our website.
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