What competitor are you up against is an interesting question. There are a lot of assumptions about your competitors. In many cases, they generally fall into four categories.
- They are ok
- They are not as good as us
- Or they are in a different league to us
- Who? Never heard of them.
All four are dangerous assumptions. Why? It shows that you likely have limited and subjective knowledge of what your competitors are doing. And at worse, it will be completely wrong. So when asking how to find out about my adversaries, it’s essential first to determine who they are. They mainly break down into five main types. Direct, indirect, future, potential and replacement (substitutes).
What competitor are you up against?
Direct competitors are fighting with you for their share of customers every day. When you think about the competition, these competitors immediately spring to mind.
Indirect competitors are those who work within the same industry as you. But they sell different products or offer alternative services. Think Commercial Litigation lawyer and criminal defence solicitor. Railway company and short-haul cheap airline. You’re still doing the same thing. But you are targeting different customers or offer an alternative way of doing it.
Potential competitors do a similar thing to you. Their target customers are the same as you but are not selling in your market sector. However, there is very little to stop them entering your market should they so wish. They have chosen to ignore your industry for a reason. Perhaps they don’t have sufficient infrastructure. They don’t see the market potential big enough, or the entry barriers are too high for them.
Future ones are like potential competitors. But, they’re more willing, able and likely to enter your sector for instance. You run a taxi service, and a major corporation like Uber are not in your city yet. Best plan and prepared for their entrance. Some of your future rivals will be brand new start-ups, or their founders are still at school. Someone in the future will disrupt your industry. Best to see it coming.
Replacement competitors (or substitute) offer an alternative product or service to you. But relieve similar customer pain points. There is always more than one way to skin a cat, so you will likely have a replacement competitor. All these competitors types can damage your market share. But which ones are the most dangerous? How do you find to ones that are actually your competitors?
A good place to start is to place your rivals into the following categories:
Your key competitors
The next big thing. Those who have the potential to become key rival.
Potential rivals who have the resources to smash a hole in the market – For instance, Google developing a similar product to you or Apple buying a key competitor.
This article asked what competitor are you up against. We noted there are many assumptions about competitors and most fall into four categories.