What’s the most surprising question you’ve been asked by an investor? That question was put to the panel last week during IR Magazine’s webinar on competitive intelligence, held in partnership with AlphaSense.
Irina Zhurba, head of IR and sustainability reporting at Mister Spex, told an anecdote from a previous company. She said she had been asked to explain the impact of the geopolitical environment in India on the firm’s stores in Pakistan – when neither market contributed much to the top or bottom line.
‘I managed to answer it, because at that point in time I was specializing in our Asian business,’ she said. ‘But you never know [what you might be asked]. Sometimes it’s less about the investment decision – it’s simply to test how much you actually know.’
Of course, IROs won’t know the answer to every question posed by an investor. There’s always the classic ‘I’ll get back to you with the numbers’ response. But being ready to discuss niche areas of your business and industry helps to set you apart, both internally and externally, agreed webinar panelists.
‘Knowing what is happening in the market, what is happening with your competitors, is internally extremely important, because it [puts you in] the position of being a trusted adviser to the board and management,’ said Müge Yücel, director of IR and sustainability at Galata Wind Enerji.
‘On the other hand, [when] you’re sitting at the table with investors and knowing so much about the market and trends and how you differentiate your company from your competitors, [that] makes you a trusted person as well, because they see you can speak for the company.’
Felix Barnard-Weston, industry head for IR at AlphaSense, emphasized the impact this knowledge can have on your personal brand. ‘If you can really deliver value back to management, or come across in the best way to investors… what does that do for your personal objectives and career aspirations?’ he asked.
Varied approaches
The panel noted that, while the benefits of competitive intelligence gathering are clear, the exact involvement of IR in this activity varies greatly from company to company. Although all IR teams will keep tabs on the competition to some extent, many are not officially tasked with feeding this information back to other departments.
A poll conducted among the webinar audience gave a snapshot of the situation: 87 percent of respondents said IR at their company conducts competitive intelligence, but for most it was not a formal responsibility.
Barnard-Weston said industry makes a big difference to how companies and their IR teams think about peer monitoring. ‘If you’re working in the tech space, your valuations and conversations might be influenced more by larger thematic evolutions in the US,’ he explained. ‘[Whereas] if you’re in the [original equipment manufacturer] space, you need to really understand consumer and supplier trends.’
IR might get more involved due to certain situations, added Barnard-Weston, such as M&A activity, the need to raise capital or an investor day. ‘These influencing factors can… steer how involved the IR team might want to be in terms of its competitive analysis,’ he said.
At Mister Spex, competitive intelligence is mostly conducted by the strategy team, said Zhurba, but she still maintains a close eye on peers and suppliers – information that both supports her IR efforts and is fed into the broader business.
‘If Estée Lauder or Hoya is saying on one of their analyst calls that they’re thinking of opening their newest plant in Romania, that’s important for me because it’s one of the pieces of information I can later forward to my buying or operations department,’ she said.
Yücel said the areas she tracks include financial parameters, social media sentiment, sustainability information and job postings.
‘A lot of companies are trying to do investments abroad,’ she detailed. ‘You can tell by the job postings whether they’re trying to expand, whether they’re looking to do something locally or abroad.’
Tech support
Given how much data there is to potentially track, panelists talked up the value of tech tools to support competitive intelligence efforts, although Yücel noted that some IR teams are held back by resource constraints.
‘We are at a point where we are getting bombarded with so much information that it is harder and harder to sift through what is important and what we need to memorize for storytelling or comparison,’ she said.
‘On the other hand, we are now seeing more and more small teams with limited resources. A lot of the applications or platforms have budget needs and, with the economic situation – for example, here in Turkey a lot of companies have much smaller budgets now – testing out new products is difficult.’
Zhurba said market intelligence platforms and AI tools, such as ChatGPT, can help her ‘sweat the details’ and make ‘those 1 percent improvements’ that lead to excellence in her IR work.
‘Let’s say I’ve never done communication around takeovers,’ she said. ‘For me, the first logical step would be to find companies that have done it and see all the steps [they have taken] – what they said, how they said it, the keywords, and so on.’
During the webinar, an audience poll asked whether viewers were using generative AI tools to support their competitive analysis. Of the respondents, 35 percent said they already are, 50 percent said they aren’t but are thinking about it and 15 percent said they aren’t and don’t plan to.
For Barnard-Weston, the biggest impact tech is having on competitive intelligence is helping IR teams be more productive and unearth data points that used to be tough or impossible to access.
‘For example, if destocking was the sixth-most talked about topic in the wine and distillers space… you’re not really going to be able to find that data point without technology and AI, because no one’s going to read every single transcript on a quarterly basis, extract every single topic and rank them like a tool can,’ he said.
But technology also has its limits, he noted. Human oversight is needed to ‘interrogate that information, come to a conclusion and disseminate it appropriately, whether that’s externally or internally.’
To watch a replay of the webinar, please click here.
