04 Apr Secondary Research in Competitor Research
Using Secondary Research to Assess a Competitor’s Capabilities
Scenario for Secondary Research:
Here is an example of how Secondary Research can be used in a Competitor Research Study. A major insurance company was preparing a bid to administer employee benefits for the public transit commission of a major city. The executives were seeking to assess the performance of the incumbent company and to address whatever weaknesses were found in the incumbent’s performance in their proposal. They also wanted to assess the likelihood of success in obtaining the contract.
Secondary Research: Searching the Public Records
In this scenario, the minutes of city council meetings provided a rich harvest of information on the incumbent company as well as a potential competitor.
It was discovered that the incumbent company had once been the insurance administrator for the city, administrating benefits to municipal employees.
According to the minutes, the incumbent lost the contract when it was discovered that they were lax in their administration, providing benefits to city employees in cases where they should not have received benefits. In other words, they were incompetent and their incompetence cost the city millions of dollars.
A very large and well-known insurance company, and a significant competitor to the company sponsoring the study, won the contract to administer the insurance benefits for municipal employees. This company did its job well, too well in the opinion of the employees, as their claims were strictly regulated: many of the type of claims that were accepted by the former administrator were now being rejected. This led to employee discontent.
Public Transit Proposal
On the surface it seemed as if the insurance company sponsoring the research had a good opportunity to have a successful bid.
Further research, however, showed that the public transit commission’s contract with its employees was coming to an end at the same time as the insurance administration contract. The public transit employees were in a foul mood and were threatening to go on strike.
Statements from transit commission officials indicated that they were not prepared to face a strike threat, and that enforcing stricter insurance administration was not politically feasible at that moment in time.
The conclusion of the research was that the transit commission would retain the current insurance administrator to avoid conflict with its employees. The insurance administrator’s incompetence turned out to be a saving grace on this occasion.
Notwithstanding the research findings, the sponsoring insurance company made an aggressive bid to win the contract but, as forecasted by the research report, the public transit commission retained the incumbent company.
This is a brief discussion on using secondary research to assess a competitor.
I welcome any comments or questions on the topic and can be contacted at the coordinates listed below.
© Enrico Codogno, 4 April 2018
Enrico Codogno, Principal Consultant, Customer Foresight