The Value of Analysis (Part II)

For Part I of this essay go here.

The second part of my bid to take over the Value Analysis sessions consisted of competitive intelligence.  In the year-plus that I’d been there, attending these events every time, I hadn’t noticed a single case that wasn’t our own product being examined.  We needed to examine what our competition was doing, how they handled common problems and design requirements.  What materials did they use, how did they actuate doors, seal air gaps, etc?  (And from a design and marketing standpoint we needed to know how our products compared against others.)  If we only looked at what we did, we risked being outclassed – blindsided – by our competition.

Ford had an entire building full of competitors’ cars, but by the time I was maneuvering to take over the Value Analysis sessions we were Visteon, and a separate entity; our access to this facility was limited and diminishing.  Still, I was sure that climate control had its own stock of competitor products to examine.  I was sure that there existed a database of competitive teardown information with performance testing results.  And so on.

I was wrong.

So I set out to fix that.  I proposed to my boss in a conversation that we go out to a Toyota dealership, a Honda dealership, GM, Hyundai, and so on – go to their service department, plonk down a credit card and purchase some of their air handling cases… and then test their performance against ours.  Then, once every setting had been tried and quantified for competitive performance evaluation, the cases would then be given to our group to examine, tear down, etc.  I even suggested buying a $99 “Walmart special” window AC unit… the functions were the same: cool air and remove moisture.  Tear it apart as well.  Even in an entirely different market, with the same function there would doubtless be something we could learn – and at a low cost, too.

I don’t remember my boss’ exact words, but they were along the line of “Why would we want to do that?”

Back in the 1970’s the Big Three (Ford, GM, and Chrysler) were utterly blindsided by Toyota, Honda, and other Japanese cars who had paid attention to quality, and had started to import smaller, higher-quality cars.  Dismissing these cars as cheap, imported junk, the Big Three continuously benchmarked themselves only against each other – and thus were utterly caught by surprise as these imports snatched enormous market shares.  It was this arrogance that contributed to their enormous slide in success.  I detected that same arrogance in my boss’ reply.

(Side note: As you might expect, people in Detroit who worked for American car companies bought American cars.  Walking through a mall’s parking lot in Dearborn, it was Ford-Ford-Ford-GM-GM-GM-Chrysler-Chrysler-Chrysler, etc.  Once in a while you’d see an imported car, but they were few and far between.  Going on business trips outside of automotive country, e.g., Chicago, Houston, etc., it was truly educational to look at the cars in malls and parked on the street.  Imports galore, with just a smattering of domestics.  I often thought it would be worth the plane fare for our executives to just walk along the streets and in parking lots in other cities to see what people outside their insulated cocoon were buying.)

“Know your enemy, know yourself” is the advice from Sun Tzu, the Chinese military genius whose book not only has influenced military leaders across the world, but is read by Asian businessmen (and women!) – which I discussed, among other things, in my essay From HAL’s Breakdown to Competitive Success.  So while it was certainly critical that we understand what we were doing to ensure our best practices were universally applied, a practice we did albeit imperfectly, we also desperately needed to know what our competition was doing if we didn’t want to get blindsided.

As I said, I got laid off before I could really push for this.  But this was the second thing I knew was absolutely essential to continue to find ideas for cost reductions: knowing what your competition is doing.  And the only way to do that is to obtain your competitors’ products and evaluate them in both performance and construction.

You absolutely, positively must know what your competition is doing.  Acting blindly without knowing your opponent’s moves is akin to playing chess in the dark.  You act, and react, in this competitive game called business.  Competitive analysis and reverse engineering is part of this puzzle.  Know your enemy.  Examine what they’re doing.  If they’ve got something good that you can – legally – duplicate, do it.  If you are not analyzing your competitors’ products and services… your loss.

Bank on the fact they’re doing it to you.

© 2013, David Hunt, PE