The obvious definition of a competitor is an organization that has a product with similar features as your product. Not so fast.
A competitor is an individual or organizations that is perceived by potential customers to solve the same problems your organization can solve.
Let that soak in.
Answer this question: “Who else besides us can solve the same problems and how do they solve them?”.
Has the scope of your competitors become broader now?
Here are more questions to answer:
Who else serves the same customers we want to serve?
Who solves the same problems we solve in the same way (similar features)?
What are the different ways our potential customers solve their problems today?
Choose the Arena of Competition
The arena of competition is a market segment. That means competitors, even when they have similar product features as your product, choose to target potential customers within the boundaries of a market segment.
Don’t get me wrong. Your competitors will opportunistically sell to potential customers outside the boundaries of a target market segment. However, a target market segment provides a focus for sales and marketing to concentrate the efforts of limited resources.
Smart competitors choose the arenas that give them the best opportunities to win, with the fewest resources, the best advantages, and the fewest obstacles.
Develop a List of Competitors
Once you have a list of potential target market segments it’s time to build a list of the competitors that compete in those market segments.
The better you know your potential customers the better you will be at making your list. The competitors on your list represent the organizations across a competitive landscape.
Some competitors will be obvious. Others will not. Consider different ways your potential customers solve their problems today - it isn’t always with a product like yours.
Analyze Each Competitor and Their Product
The next thing to do is get insight into each competitor. Pass this information to a competitive intelligence (CI) team if you have one. Leverage a CI platform like KLUE or Crayon if you have one (get one if you don’t). If you don’t have an automation tool or a CI team, divide and conquer with your team.
TIP: Use Google Alerts to give you automated alerts about competitors and their products. It’s easy and free.
Don’t fall into the trap of analysis paralysis. Get enough information to get started and build on your competitive intelligence as you learn more.
A basic SWOT Analysis is a great starting point. What are the strengths of each competitor? What are the weaknesses of each competitor?. The S and W of SWOT are good enough for now.
Map Competitors to Each Other
Competitor Mapping is the process of identifying the competitors in each market segment and comparing competitors to each other. Doing so gives you what is commonly referred to as a competitor landscape.
A competitor landscape helps visualize which competitors to avoid, which competitors you are likely to triumph over, and where there are gaps to exploit.
Below is an illustration of a competitor landscape. Note there are two axes. Each axis is a continuum. In this example, the x-axis has LIVE on the left and RECORDED on the right. The y-axis has SHORT FORM on the bottom and LONG FORM on the top.
Once the axes are defined, each competitor is placed on the competitor landscape relative to each other.
Do a web image search on ‘competitive landscape’ or ‘competitor landscape’ and you will find many examples to guide you.
The important thing to remember is you need to narrow your comparison down to two axes. I find it’s an interactive process. The more I learn about each competitor the more I refine the axes, sometimes throwing out what I started with and replacing it with something better.
A graphical representation makes it much easier to comprehend the relative position of each competitor. It’s impossible (IMHO) to make the same comparison with just a list.