Customer Decisions on Benefits
Hidden Negative Volatility
Capsule: Some Negative Volatility may be hidden or invisible to you. In many cases, the causes of hidden volatility inflict more damage than do the causes of visible Negative Volatility. Evaluate the causes for both hidden and visible Negative Volatility.
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Symptoms and Implications:
Some negative volatility may be hidden or invisible to you. The Company should evaluate the causes for both hidden and visible negative volatility. This analysis of hidden negative volatility directs your attention to areas of benefit differences with competition that might have escaped your notice. In many cases, the causes of hidden volatility inflict more damage than do the causes of visible negative volatility. There may be more total volume involved with hidden, than with visible, negative volatility.
Hidden negative volatility occurs when the Company loses out in competition for any positive volatility in the market. This occurs in both the invitation and evaluation stages of a customer's decision. The Company's hidden negative volatility occurs when it is not invited by a customer to bid on current or additional volume (invitation failure) and when it loses out to other suppliers in competition for the volatile volume (evaluation failure).
Reasons "Why Not" Company: Industry Examples>>
Hidden Negative Volatility Questions |
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Analysis 32 |
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Analysis 33 |
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Basic Strategy Guide Users Return To: Step 14
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Summary Points | Next: Reasons for Positive Volatility |