4 Types of Competitors To Watch Out For
Identifying your competition may seem like a daunting task, and a task that no one seems to want to do (even when they 100% have to). It is also the first step in conducting a full competitive analysis, which we all know is imperative to the success of any business.
But where do you start? How do you even start to define your competitors when there are millions of companies out there?
First things first. When you identify competitors, you have three types to consider: direct, indirect, and replacement. Oh wait, we mentioned four didn’t we? Thanks to the explosion of digital assets, we now have our digital competitors!
Direct Competitors
Your direct competitors are those that offer the same product with the same goal as your own. If you consider the needs of your customer, you will nearly always evaluate you against your direct competitors before making a purchasing decision.
A great example of this is Coles vs. Woolworths → Check them out on KnowFirst™
Indirect Competitors
Indirect competitors can be a lot more broad as they offer a product or service that is in a different category altogether, but which is often seen as an alternative purchase choice.
McDonalds vs Dominos are indirect competitors → Check them out on KnowFirst™
Replacement Competitors
Replacement competitors offer an alternative product or service to the one you offer, but one which your customers could choose to spend their money instead.
One sells books, one sells video games, both are replacement competitors, Dymocks vs EB Games → Check them out on KnowFirst™
Digital
This one may be a little controversial, and isn’t seen in many of the textbooks used in our universities. But considering how your competitors are represented in our digital world should be at the top of your list. So who are your digital competitors? These are the ones that compete against you in your digital results. Your digital competitors may also fall into your direct, indirect or replacement competition, but their digital presence versus yours is the defining element.
AirBNB vs Hotels Combined are perfect examples of digital competitors → Check them out on KnowFirst™
How do you stack up?
No matter your product or service, sourcing the information on your competitors can be time consuming and stressful. But in order to stay relevant, you need to listen to your customers and employees, watch for trends and changes, and adapt your own model to suit the ever-changing consumer landscape.
