Competitors We Did Not See or Anticipate
When we talk about competitors in business, we usually think of those offering products or services similar to ours. If we run a restaurant, we see another restaurant as a competitor. If we offer software, we consider similar software the competition.
But the most dangerous competitor is not always the most similar. Sometimes the real competitor solves the customer's problem in a different way, even from outside our industry.
Direct and hidden competitors
A direct competitor does almost the same thing we do. They are easy to see. We can see their website, prices and advertising.
A hidden competitor is harder to see. For a classroom-based training center, for example, another center is not the only competitor. Free videos, online courses, books, private advisers, or even the customer's lack of patience for learning can also compete.
For a telephone taxi service, another telephone taxi service was not the only competitor; a platform model such as Snapp could change the entire problem.
Take alternatives seriously
Customers do not always choose between us and a direct competitor. Sometimes they choose between buying and not buying. Sometimes they do the work themselves, tolerate the problem, or settle for a cheaper or incomplete solution.
If we fail to see these alternatives, our market analysis is incomplete. We assume the customer must choose between us and three competitors, while their main option may be not buying anything at all.
Tomorrow's competitor is small today
Many serious competitors are not taken seriously at first because they are small, incomplete, inexperienced or have a model that seems unusual. But if they solve the customer's problem more simply, cheaply or quickly, they gradually shift the market.
The problem is that established businesses are usually hit from the very direction they underestimated.
What should we monitor?
- Changes in customer behavior
- New technologies and tools
- Simple, informal solutions customers use
- Small but fast-moving businesses
- Changes in regulations, restrictions and sales channels
A competitor is not just a company. Anything that reduces a customer's need for us is part of the competitive landscape.
Conclusion
We should not look for competitors only in a list of similar companies. We must follow the customer's problem and understand their options for solving it.
If we spot a hidden competitor too late, we may discover that the customer no longer thinks in our terms. A business must look and listen beyond the boundaries of its own industry.