Recently we discussed the importance of developing a strategy and the implications consolidation has on your business. A big part of developing a strategy, whether it is stand pat, buy or sell is understanding what your competitors are up to in the marketplace. I am often asked about the goings on of other large players in the industry. It is good business to be aware of the goings on of key competitors in your marketplace. But many owners do not realize that much of this competitive intelligence they seek out is at their fingertips if they know where to look. For the next few weeks I will share one of my favorite sources of publically available competitive intelligence with you.
Acquisitions, who acquired whom and the price paid for such acquisitions is always a topic of much speculation. When acquisitions are completed by a public company, or semi-public company perhaps planning to go public, often much of this information is disclosed in required public filings. Industry trade associations or investment banks will put out research reports that provide substantial competitive information as well.
Public companies often provide substantial insight into the drivers of profitability. For example, looking slightly outside the collision industry, the Sonic Automotive Group, one of the largest vehicle retailers in the country, recently reported that the Service, Parts, Collision and Warranty segment of their business accounted for only about 15% of revenues but a whopping 40% of profits. Tracking the drivers of profitability often provides clues to the strategy of a major competitor. In Sonic’s case, clearly servicing and repairing vehicles is nearly as important as selling vehicles.
Read more here.
