It is a simple question with a complex answer. Competitors are organizations whose products or services compete for funds with your product or service to solve customer problems. You have traditional direct competitors, but you also have emerging competitors that need your attention. Emerging rivals offer a different approach and/or technology to address the customers’ needs.
The evolution of technology products and services is classic:
- Minicomputers evolved to compete against mainframes
- Workstations and PCs evolved to compete against minicomputers
- Clouds evolved to compete against on-premises equipment of all sizes
Communications offers an even more dramatic example:
- Cell phones virtually eliminated pay phones
- Then they started supplanting landlines, watches, and cameras
- Now they are replacing GPS devices and other web access devices
Newspapers upended by TV; now people get news over to PCs or mobile devices.
The question is how much of your limited time and budget should you devote to traditional direct competitors vs. emerging competitors.
You could say that my management is only interested in direct competitors, but part of your job is alert your management to competitive threats.
Internal sources are a good place to start. Ask your salespeople what they are hearing from customers. Ask your product management what they are learning at conferences. Ask your engineers and R&D staff what they are reading in technical publications. Do a broad sweep of secondary literature and prioritize the results to focus on the top potential threats.
Talk with customers; not just existing customers, but non-buyers who fit the profile of your target customers. Ask them how they are solving their problem your product/service addresses. Network with experts in your field to exchange information on industry developments.
This may sound like a lot of work, but fitting one or two conversations in each week will pay off in identifying emerging threats and documenting the possible effects on your firm. You will be seen as a more valuable employee, helping yourself as well.