Yellow could have used a good competitive analysis in order to avoid bankruptcy

Yellow’s bankruptcy surprised many. How could one of the largest logistics companies with a solid history go bankrupt in a booming economy? After looking into the company’s history, hind sight is 20/20. Yellow’s debt from acquisitions accumulated and simply wasn’t offset by increasing revenue over time. Then it fell further behind due to market changes at the onset of the pandemic. Could Yellow have avoided bankruptcy? Perhaps, but only if they had worked to better understand their competitors’ positioning, and employed the right strategic pricing to win contracts in changing market conditions.

An evaluation of Yellow’s competition in major contracts would have provided insights into whether the company was still relevant and competitive. If the analysis revealed declining market share due to noncompetitive pricing, Yellow could have developed strategies to cut costs to match other vendors and regain its competitive edge. Yellow could have also used scenario planning to simulate various possible outcomes for bidding on major contracts, including worst-case scenarios for competitor pricing. This would have helped the company develop bidding strategies to optimize their win rate. Yellow could have also applied the concept of using competitive analysis to enhance one’s own offerings. By identifying and adopting the pricing strategies of successful competitors, Yellow might have adapted and implemented effective approaches to prevent bankruptcy.

It’s important to note that while a competitive analysis can provide valuable insights, it’s just one tool in a larger decision-making toolkit. Each company’s situation is unique, and the success of bidding efforts also depends on timely execution, adaptability, and the ability to respond to changing circumstances.

Capital Growth Experts (CGE) is equipped with extensive experience in competitive analysis to develop accurate competitor positioning for our clients. This positioning can be invaluable and can be a key input for developing winning pricing strategies. CGE can identify and conduct scenarios modeling the impact of pricing strategies, for the home team as well as for targeted competitors, presenting you with a winning pricing strategy to maximize the win rate on a contract. CGE also offers related services to support a winning strategy, including: competitor assessment, basis of estimates, strategic pricing, proposal writing and volume organization, as well as technical writing.

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