Listening Provided the Pivotal Clue for Competitive Intelligence

The Competitive Situation

A glass manufacturing company wanted to know why a competitor was still in the glass business, as its glass business was losing money, and had been for several years. Their ultimate goal was to predict when this competitor would exit the glass business so they could capture the competitor’s customers.

competitive intelligence

My Mission

My goal was to learn as much as I could about the competing glass company, and most importantly why they were motivated to remain in the glass business. Most of the publicly held competitor’s revenue, and all of its profit, came from their food business.

My Findings

I had found out that the competitor was investing minimally in their glass factory operation, and hired many Spanish speaking immigrants to work in the less hot and less dangerous jobs. There were piles of scrap glass around the factory, but they didn’t bother hauling them away.

It was time for the quarterly earnings phone call, and my client suggested I listen in. I almost didn’t as I figured I could read this later. However, something made me listen. The competitor’s CEO was all cheery when discussing the food business. Then an analyst asked, “And what about the glass business? What are you doing there?” “Ah…the glass business…well…,” uttered the CEO in a dejected and hesitant tone.

Hmmm I thought, it sounds like the CEO is emotionally attached to the glass business. I researched and found out that the CEO’s Dad had bought the glass business, and surmised that he wanted to stay in it for that reason, not for revenue or profit. I called the analyst who had asked about the glass business to learn why he thought the company remained in the glass business, and what might cause the company to exit it. He agreed that the CEO was emotionally attached to the glass business. Thus, he was not likely to leave the glass business for any rational reason, else he would have already done so.

These conversations and research gave me the insight to answer my client’s question: what would cause the competitor to divest or sell the glass business?

While I couldn’t say when, I concluded that it would take a catastrophic event for the CEO to exit the glass business. It would have to be an event that was out of his control. I figured an accident in the factory or something that serious, could be a trigger.

I recommended that my client should closely monitor the competitor since something was bound to push the company out of the glass business. Thus, my client closely monitored the competitor’s activity. The trigger was when a stockholder’s group filed a complaint and threatened to submit a class action suit against the company if they didn’t divest the money losing glass business. Bingo, this was the event my client was waiting for. They went after the competing company’s glass business. The time was right, and they were ready.

Conclusion

All too often we rely only on written digital data. It turned out the CEO’s tone of voice in the competitor’s earnings conference call provided the pivotal clue. If I had only read the earnings report—my original intention—I would have missed it. My lesson learned: in competitive intelligence projects, when you can listen to the human voice, especially the company’s CEO, do so.

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2 Responses

  1. A great example. It shows the importance of interviewing – as the tone of voice and the gaps in words and so much more can give clues that you’d never get in most transcripts.

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