Unexpected Competition: Looking beyond the obvious

There’s almost always a competitor for your product, business or brand. It doesn’t matter how differentiated, unique or special your offering is. The customer generally has choices. Though, sometimes the competition is not always obvious. The most dangerous threats often come from somewhere unexpected - a different category or industry, a new technology, a cultural change that makes your product obsolete.

This is why a broad view of competitive analysis is so essential. 

In my last role, my very smart team set up a weekly meeting for what we called “scanning” to look at a broad range of topics so we didn’t miss an unexpected competitive threat. Here are the focus areas that the team considered: 

• Traditional Competitive Activity:
  This is the standard stuff. Most businesses track very specific competitors with a similar offering in the same market. For these players, we tracked their performance, read their press releases and financial reports, looked at their google reviews, etc.
• Close Substitutes: In the restaurant world, this was often grocery stores and convenience stores. The increasing quality and variety of meal offerings in those venues have definitely taken business away from restaurants. Keeping an eye on trends and changes in related categories is essential to ensuring that you don’t miss something disruptive.
• External Factors: While blaming bad performance on these factors is generally frowned upon, they can actually have significant impacts on a business or industry. The impact of the pandemic is an obvious example. New conditions can change the competitive balance even when the competition does nothing different in particular. Sometimes a competitor is just better poised to take advantage of a political change, supply chain disruptions, a global or national crisis, or even an odd weather pattern. 
• Macroeconomic Factors: Over the past few years, we have seen how inflation, supply chain costs, labor availability and economic policy can have huge effects on not just prices but consumer behavior in general. And, it’s not consistent demographically. The things that drive older consumers on fixed incomes are often very different from what drives younger working consumers, for example. 
• Consumer/Customer Trends: What people value or are looking for from products or experiences shifts within a larger cultural context. Anything that changes overall behaviors at a high level can have ripple effects downstream on which competitive products customers purchase. These factors are similarly dependent on age, income, and other demographic and psychographic factors, adding complexity and unpredictability to the equation.
• Technological Changes: Technology can change everything from the way people consume advertising, to who they spend their time with, to what hobbies and activities they participate in. All of these have the potential to impact preferences. Competitors who don’t adapt get left behind. Sometimes, whole industries don’t adapt and get left behind. 
• Internal Issues: Finally, of course, it is important to consider how internal issues within a company can create openings for competitors to steal share. Service and quality challenges can create gaping holes where existing and/or new players take business. 

Having a deep understanding of what differentiates your product or brand, along with consistent, regular scanning of these competitive/external factors is essential to creating a “self-aware” business. Without this information, it’s easy to miss important changes that pose challenges now or in the future. Consistent competitive scanning helps ensure these issues are considered before it is too late to react. 

If you are interested in talking more about how to stay ahead of competitive challenges, visit www.proprioceptive.io or shoot me a note at jeff.sigel@proprioceptive.io.