Who's your Competition?

I'm sure all of us strategy guys get this all the time. How do we get competitor information? How do we confirm it? How do we spell-out risks and mitigation plans? How do we make plans around their weak points? What's our competitive strategy? How have we reverse engineered competition's strategy? Then the usual stuff around deep dives, war-game simulations, scenario planning and so on. I often feel another question should come first.

Who's our competition?

Now one approach is to dismiss this questions as too basic (come on, how old are you?). The other common approach is an exercise around competition mapping. The question, however, is different - it's not about listing but defining. Let me try and clarify, but before that, another basic question at this point, who should be defining competition for us? Aren't all of us senior guys smart enough to do this? Well sorry but no.

Our consumer defines who our competition is.

Let me try and peel the onion here. I work for an eCommerce firm. Our consumers aren't people who have a need for eCommerce because no one really dies without eCommerce, we're one of the channel choices (s)he makes. The need is perhaps for a Juicer. Maybe the consumer doesn't even need a Juicer but Juice. Maybe not even Juice but refreshment or health. Now given this hypothetical flow, a competing product is one that gives him / her a competing option, an alternate route to refreshment or health. Here's what - this is illustrative. I'm not claiming to define this for consumers and neither is the peeling of the onion complete. The point, however, is to show how competition is a) defined by the consumer's need-states and b) wider than we think.

I've worked in the Durables and Appliances industry. I know for most of the time, we feel what competes with our juicer is another juicer. We don't think much about any threats that are not appliances while the truth is that if packaged juices get better and cheaper, if someone sets up juice-vending machines all around, no one will buy our juicers. If someone brings dissolve-and-drink juice-pills to the market (I realize it sounds like an ugly idea but who knows, so did rock music to the classical guys), then the juice-story also dies.

What hit pagers was not cheaper, better pagers. Film-photography, personal-computers, walkmans, watches and so many other products were killed because execs were too bothered looking for competition in the room while the consumers simply shifted to a better source to, literally, get their juice. I'm sure you will know many more examples of these occurrences than I can list, where, as someone says in Sharp Teeth by Toby Barlow - "the bullet that hits you is never the one you're running from".