Small and medium-sized enterprises (SMEs) often assume their competition consists solely of others offering similar products or services. It’s a logical assumption—a yacht manufacturer might focus on other yacht makers, and a tech company might zero in on rival tech firms. However, this narrow view can limit growth opportunities and stifle innovation. By broadening your perspective on who your true competitors are, you can unlock transformative strategies that propel your business forward.
I’ve had numerous clients experience significant growth after realizing that their real competition wasn’t just other brands in their industry but anything else their customers might spend money on—even if it seemed unrelated. Let’s delve into this concept using a yacht brand like Axopar as our central example.
Axopar Yachts: Beyond Traditional Competition
Axopar Yachts, a Finnish manufacturer renowned for its high-performance, adventure-ready boats, might typically consider other yacht brands like Wally or Nautor Swann as its primary competitors. On a functional level, this makes sense—they all produce luxury yachts catering to a similar customer segment. However, the real competition extends much further and encompasses a broader array of alternatives vying for the same customer resources.
Imagine a 55-year-old executive who has worked tirelessly for decades and has recently exited their business. He’s contemplating a significant purchase to celebrate his success. Drawn to the idea of owning a yacht, he’s not just interested in the vessel itself but in the freedom, adventure, and lifestyle it represents. Yet, his spouse might have different ideas, such as investing in a luxury motorhome for cross-country travel, purchasing a holiday home by the sea, or acquiring a high-end sports car like a Porsche or Ferrari.
In this scenario, Axopar isn’t just competing with other yacht manufacturers; it’s up against any significant lifestyle purchase that offers a sense of freedom and adventure. The real competitors are motorhome dealers, real estate agents, luxury car brands, or even exotic travel experiences. Recognizing this broader competitive landscape is crucial for Axopar to position itself effectively and capture the customer’s attention and resources.
The Key Takeaway: Any Alternative Is a Competitor
Any alternative your customer might consider instead of your product is a competitor. Recognizing and understanding this broader competitive landscape gives SMEs a significant edge. By shifting focus from traditional competitors to the full spectrum of options available to customers, businesses can develop more effective strategies, drive innovation, and ultimately achieve sustainable growth.
Understanding the Broader Competitive Landscape
To effectively broaden your competitive perspective, it’s essential to understand both the functional and emotional roles your product or service fulfills.
Functional Role: For Axopar Yachts, the functional role is providing a high-quality boating experience. Focusing solely on this aspect positions other yacht manufacturers as the main competitors. However, this is just the starting point.
Emotional Role: When you consider the emotional benefits—selling freedom, adventure, and a unique lifestyle—the competitive field expands to include any product or service that satisfies these desires. Luxury motorhomes, holiday homes, high-end sports cars, and exotic travel experiences all offer similar emotional fulfillment.
Understanding the real-world situations that prompt a purchase is equally important. For our executive, significant life events such as exiting a business, reaching a career milestone, or entering early retirement can trigger the desire to invest in something meaningful and fulfilling. Recognizing these triggers allows businesses like Axopar to tailor their marketing strategies to align with these pivotal moments, positioning their product as the ideal choice when customers are most receptive.
The Benefits of Identifying True Rivals
By broadening your perspective on competition, you unlock several strategic advantages:
Focused Strategy Development: Identifying your true rivals enables you to develop more targeted strategies to compete effectively. Understanding your competition helps you grasp their strengths and weaknesses, which is crucial for refining your own business approach. This awareness allows you to allocate resources more efficiently, tailor your offerings to better meet customer needs, and differentiate your products or services more effectively.
Driving Innovation: Recognizing a wider array of competitors can spur innovation. Rivalry with true competitors motivates companies to outdo each other with new products or services that address broader customer desires. Competitor analysis can be a catalyst for innovation, helping businesses stay ahead of market trends and adapt to changing customer preferences.
Boosting Performance: This broader view can enhance performance across the organization. The motivation to outperform a more diverse range of competitors can lead to increased productivity, higher quality standards, and greater employee engagement. Employees become more invested when they understand the larger competitive landscape and their role in helping the company succeed.
Market Differentiation: Understanding your true rivals helps you position your business uniquely in the market. By identifying gaps in competitor offerings, you can highlight your unique value proposition and target underserved market segments. Comprehending your competitors is essential for carving out a distinct place in the market.
Approaches to Rethinking Competition
To effectively broaden your competitive perspective, consider adopting a comprehensive approach:
Conduct In-Depth Competitor Analysis: Go beyond surface-level research to understand your rivals’ strengths, weaknesses, and strategies. This involves analyzing their products, services, pricing models, marketing strategies, and target customers. Leveraging competitive intelligence can provide insights into competitor strategies and early warnings of competitive threats. Understanding the strengths and weaknesses of competitors gives you an unfair advantage.
Focus on Customer Needs: Shift your focus from simply outperforming competitors to better serving customer needs. A customer-centric approach can uncover new market opportunities, drive product and service innovations, and increase customer loyalty. By aligning closely with customer desires, you foster stronger relationships and encourage repeat business.
Recognize Indirect Competitors: Look beyond direct competitors to identify indirect rivals addressing the same customer needs through different solutions. This helps you anticipate market disruptions, identify potential threats from adjacent industries, and discover new ways to solve customer problems. Being aware of indirect competition allows you to stay ahead of trends that could divert customers’ attention and spending.
Applying This to Your Business
By expanding your understanding of who or what you’re competing against, you can craft more compelling marketing messages that resonate on a deeper level. Instead of fixating on outpacing similar businesses, focus on positioning your brand as the ultimate solution to your customer’s emotional and situational needs.
For instance, if you’re in the luxury watch industry, you’re not just competing with other watchmakers. You might be up against luxury vacations, high-end electronics, or investment opportunities—all vying for the same portion of disposable income. Tailoring your messaging to highlight how your watch offers timeless value, status, and personal satisfaction can make it the more compelling choice.
Similarly, a boutique fitness studio isn’t merely competing with other gyms; it’s also contending with online fitness programs, outdoor recreational activities, or even leisure pursuits like art classes. Understanding this broader competitive landscape helps you create unique offerings that align with customers’ lifestyles and preferences.
Implementing Your Improved Strategy
To put this broader competitive perspective into action, integrate these insights into your strategic planning:
Create Detailed Competitor Profiles: Build comprehensive profiles for each true rival, including their product offerings, pricing strategies, marketing tactics, and customer feedback. This information provides a clear picture of the competitive environment and helps identify areas where you can differentiate.
Conduct Regular SWOT Analyses: Perform ongoing assessments of Strengths, Weaknesses, Opportunities, and Threats to stay updated on the competitive landscape. This proactive approach allows you to respond quickly to market changes and capitalize on emerging opportunities.
Exploit Competitors’ Weaknesses: Identify gaps or shortcomings in your rivals’ offerings and use this information to position your business more effectively. By addressing unmet customer needs, you can capture market share from competitors who may have overlooked these areas.
Benchmark Against Competitors’ Strengths: Use competitors’ strengths as benchmarks to drive strategic improvements in your own business. This doesn’t mean copying them but learning from their successes to enhance your offerings.
Continuously Monitor and Adapt: Regularly review and adjust your strategy based on changes in the competitive landscape and market conditions. Staying agile ensures you remain relevant and can pivot as needed to maintain a competitive edge.
By understanding the strengths and weaknesses of competitors, businesses can develop strategies that capitalize on market opportunities and navigate threats effectively.
Embrace a Broader Competitive Mindset
Broadening your perspective on competition doesn’t just help you gain market share; it enables you to build a brand that deeply resonates with your audience. Like my clients who shifted their focus and unlocked unprecedented growth, you too can discover new avenues for success by identifying and targeting your real competitors. By understanding who is truly “taking your cash,” you position your business not just as an option but as the most desirable choice when your customer’s moment of decision arrives.
Remember, the goal isn’t to outperform similar businesses—it’s to better serve your customers’ needs and desires, securing your place as their preferred choice. By embracing a broader competitive mindset, you open the door to innovation, deeper customer connections, and sustainable growth.
