How to Make Competitive Intelligence Work with Lots of Competitors. Check out these 5 tips to keep up with CI in a Hyper-Competitive Market.
Which Competitors Should You Be Tracking?
Learn where to start when defining a competitive landscape and how to prioritize competitive analysis for the biggest impact.
Competitive intelligence is becoming essential for developing effective business strategies. Tracking the competition can provide you with invaluable insights that can inform your strategy and identify competitor strengths, weaknesses, and gaps in the market. The first step in implementing a CI strategy is defining your competitive landscape. Certain industries have large numbers of competitors, so it can be difficult to know which ones should you be tracking. It’s easy to only focus on your most obvious competitors. However, it is critical to take a look into your own corporate direction and aspirations. From there, you can base your competitor definitions on what makes sense for your business. There are many approaches, but you have to go beyond your clear competition and also keep track of the emerging competitors.
To get you started, we have broken out the competition into the three most common categories.
Direct competitors are the most recognizable and are the companies you compete with the most. You encounter these companies most in your win/loss analysis. They are typically in the same category as you and offer very similar products and services. You’ll want to dive into their product and service offerings, pricing, promotions, positioning, messaging, and the customers they serve.
For the sake of example, we will use the crowded customer relationship management market. If you check out the Gartner Magic Quadrant or visit review sites like G2Crowd and Owler, you will see that there is no shortage of vendors in this space. However, we need to focus most of our resources on the direct competitors that stand to make the biggest impact to our business. In this fictitious company case, we would consider Salesforce, Hubspot, and Zoho as our direct competitors because a) we lose deals to them most often, b) their offerings most closely align to ours, and c) with even small improvements to our go-to-market strategy, we could make the largest gains.
Indirect competitors might be less visible or have a wide range of offerings. They sell different products or services but aim to serve a similar purpose and compete for the same customer base as you. Following the example above, Oracle, Microsoft, Infor, Adobe(Marketo) and SAP are indirect competitors to Salesforce, Hubspot and Zoho, since they also offer a suite of integrated business applications.
Replacement (Emerging) competitors
Replacement competitors (also known as emerging) are the hardest to spot.
They often times provide a different product or service altogether that can be perceived as a substitute solution for your same customer base in certain situations. Replacement competitors do not need to be monitored as frequently, but they should not be overlooked (monitoring social media channels is a great way to pinpoint these competitors).
With the above example, if you were to go back to 10 years ago, Hubspot was a marketing automation tool and considered an emerging competitor at that time. If other CRMs in the space had paid closer attention, they could have maintained a better competitive advantage and more market share. Now Hubspot is one of the leading CRMs available in the market.
Hubspot circa 2006
It is critical to know and monitor the competition and new entrants in order to identify industry trends, risks, and opportunities to gain a competitive advantage. These are the three common categories of competitors you should focus your efforts on. CI tools such as Kompyte can help streamline and automate this process with a competitor detector tool, alerts for newly detected competitors, features for competitor grouping, and an intel feed allowing users to incorporate external intel about new competitors from the field.