Researching competition that is under-cutting the market

Scenario: I'm in the market research stage of my startup (manufacturing), and when researching my competition I noticed one company who is able to provide similar goods to what I plan to sell at a significantly lower price than what I would be able to sell them for. This companies' low price also undercuts all of the major players in the market.

What I know so far: The company manufactures locally, and does not outsource to China. They are also a small company, so their ability to undercut the market (and major global brands) does not come from their companies size, efficiency, or reach.

What I want to know: How are they able to offer a product at such a low price compared to the market. One of the possible scenarios I came up with is that they are receiving a government grant (maybe for manufacturing locally?).

• Is there a way to determine whether a company has been the recipient of a state or federal grant?
• What other methods are available to someone to (legally and ethically) research their competition?

1. Grant information should be publicly available, so you can check that
2. Phone them. I know it sounds ridiculously simple, but phone their front office / customer service, etc. and either play dumb and ask a bunch of questions, say you are interested in product but would love some more info on it, etc.

If the product is not too expensive, order it, then either call in to thank them, ask them for more info, try to return it and see how they handle it, etc.

You'd be surprised how many "company secrets" slip out, just by being friendly and talkative with the person on the other side of the line.