Hi. Welcome back.
Today we're going to examine some situations in which sales were significantly
hurt because the external environment changed or it was not properly understood.
Some of these problems could have been avoided more easily than others.
But they also reflect a situation in which a systematic professional analysis of
the external environment could have helped
reducing the risks associated with doing business.
In all these cases,
we're talking about real life situations,
but the company's identity have been protected.
Let's start with the first example.
X Mart is a large U.S. retail chain that
decided to expand operations into a foreign country.
Since X Mart was extremely successful in the United States,
and their proud portfolio was extremely successful,
the management decided to introduce products like
golf and skiing equipment in a tropical country.
Of course, the local clients could not care less about golf.
And needless to say, those products did not sell very well.
Also, it is hard to sell ski gear when you face 35 degrees Celsius.
Another example, El Nobre is the manufacturer of one of the best chocolates in the world,
thanks to the use of a very rare type of
cocoa that only occurs in Venezuela and a few other countries.
El Nobre competed in the chocolate powder market used in chocolate milk production.
Chocolate milk consumers were not sensitive to
the superior quality El Nobre product offered,
and refused to pay more for the higher quality.
Capybara, a glue manufacturer,
produced the best glue in its market.
It was stronger and more resistant to extremely high
and extremely low temperatures than any other glue in the market.
The company had about 90% of market share until Stubborn,
a low-cost, low quality competitor, entered the market.
Since consumers used the glue for home improvement,
they didn't need a very strong glue.
Capybara's reaction was to lower the price in order to match the competition.
Unfortunately, Stubborn manufacturing cost was way
lower because they use a different manufacturing process Unknown to Capybara.
In all of these examples,
it wouldn't make any difference how hard the sales teams try to win market share.
It was an uphill battle.
In order to be successful,
the sales planning process needs to be fed with
accurate processed information presented in
sufficient time so as to allow the decision maker to act.
The stories I have just mentioned could have had a happier ending.
For example, X Mart,
the mistakes in the product portfolio could have been avoided by
bringing someone who actually understood
the market in which the company wanted to operate.
El Nobre, the mistakes were actually
solved when the management realized that their superior product
and extremely rare cocoa could have be used to manufacture superior fine chocolates.
The new fine chocolate were sold in places like Japan,
Switzerland, U.S., and others,
in which the demand in final consumers were
more than happy to pay more for a far superior product.
Capybara, realizing the far superior product,
Capybara management remove the glue from
the general public market stores like Walmart
and just started offering the superior blue to aerospace industry,
in which the extremely adherence of the glue and its resistance
to extreme conditions allowed for the substitution of metal rivets,
thus reducing the weight.
These are only some examples in which competitive intelligence could have helped sales.
Thank you.
We will see you in the next video.