Competitive analysis

KNOW YOUR OPPONENT

The definition of a competitor is that of someone buying from them and not you. Why that is depends on their growth strategy and market positioning. Some firms attempt to grab market share quickly in order to become a juicy takeover target, others move slower with the eye on market leadership. In either case, knowing the competition is essential, especially their internal strategies. Financial analysis of competitor performance provides that insight.

Large competitors are often publicly traded which means that their financial reports are readily available; smaller competitors are usually not which means that the information has to be gathered through other sources. In the latter case, the reports are often unaudited, far less detailed and can be deceptive.

Consumers are faced with an enormous array of selections to choose between. Some gravitate toward quality items while others look for the most economic buy. Pricing is a major factor but so is packaging and advertising. A sustainable price must cover all these expenses and still generate a profit; accurate analysis of competitor financials provides insights into their financial strength and used to displace them. Price wars based on financial analysis and are very effective and can send a competitor into the red.

Once the financial statements have been made comparable (including conforming the functional currency in case of international comparison), an array of growth and performance ratios is generated. View snapshot (Delta/EasyJet; PowerPoint, 4-slides of 26) or read our manager's overview.

ICELAND BANKING COLLAPSE

When the Icelandic economy collapsed October 2008, we were called upon to provide the Parliament Special Investigative Commission (SIC) with a uniform statement reflecting the position of the three leading banks, Landsbanki, Kaupthing (now Arion) and Glitnir (now Islandsbanki) in addition to other financial system and macroeconomic information.

While this may appear to be a simple task, working with statements that differ between banks and periods is a considerable challenge. The result was a clear overview of how the three banks performed as a whole which was then used to match the data against time series from institutions such as the Central Bank and FSA.

The work was carried out by our Managing Director, who has well over a decade's experience in merging financial reports. IceStat's RatioAnalyst was used to deliver the project in 2 weeks and delivered as Excel spreadsheets and STATA import files. Bank statements included each bank and the sum total in common metrics format for further SIC work.

"Snorri contributed to the data collection for the Parliamentary Special Investigation Commission in Iceland. He delivered as promised and then some, hence I can wholeheartedly recommend IceStat as a great macro-statistics provider for analysis on Iceland." SIC, October 8, 2009

So if you're looking for competitive analysis, make sure to have it done right. It's very easy to make mistakes when merging financial accounts from multiple businesses.

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KNOW YOUR OPPONENT The definition of a competitor is that of someone buying from them and not you. Why that is depends on their growth strategy and market positioning. Some firms attempt to grab market share quickly in order to become a juicy takeover target, others move slower with the eye on market leadership. In either case, knowing the competition is essential, especially their internal strategies. Financial analysis of competitor performance provides that insight. Large competitors are often publicly traded which means that their financial reports are readily available; smaller competitors are usually not which means that the information has to be gathered through other sources. In the latter case, the reports are often unaudited, far less detailed and can be deceptive.
		Consumers are faced with an enormous array of selections to choose between. Some gravitate toward quality items while others look for the most economic buy. Pricing is a major factor but so is packaging and advertising. A sustainable price must cover all these expenses and still generate a profit; accurate analysis of competitor financials provides insights into their financial strength and used to displace them. Price wars based on financial analysis and are very effective and can send a competitor into the red.
Once the financial statements have been made comparable (including conforming the functional currency in case of international comparison), an array of growth and performance ratios is generated. View snapshot (Delta/EasyJet; PowerPoint, 4-slides of 26) or read our manager's overview.
ICELAND BANKING COLLAPSE When the Icelandic economy collapsed October 2008, we were called upon to provide the Parliament Special Investigative Commission (SIC) with a uniform statement reflecting the position of the three leading banks, Landsbanki, Kaupthing (now Arion) and Glitnir (now Islandsbanki) in addition to other financial system and macroeconomic information.
	While this may appear to be a simple task, working with statements that differ between banks and periods is a considerable challenge. The result was a clear overview of how the three banks performed as a whole which was then used to match the data against time series from institutions such as the Central Bank and FSA. The work was carried out by our Managing Director, who has well over a decade's experience in merging financial reports. IceStat's RatioAnalyst was used to deliver the project in 2 weeks and delivered as Excel spreadsheets and STATA import files. Bank statements included each bank and the sum total in common metrics format for further SIC work. "Snorri contributed to the data collection for the Parliamentary Special Investigation Commission in Iceland. He delivered as promised and then some, hence I can wholeheartedly recommend IceStat as a great macro-statistics provider for analysis on Iceland." SIC, October 8, 2009
So if you're looking for competitive analysis, make sure to have it done right. It's very easy to make mistakes when merging financial accounts from multiple businesses.