It’s critical to business success to spot potential innovative competitors and strategic category killers before they emerge. Doing this is easier said than done, but these three exercises for strategic thinking can generate early insights on potential challengers:
- We’ve previously covered the importance of looking at benefits your brand provides and determining what potential substitutes could provide the same benefits. Stretching your thinking with this strategy exercise will identify various potential non-traditional competitors.
- A second strategy exercise is to look at the “parts” that make up your business, then identify who else could put those same parts together (potentially through outsourcing) to quickly enter your marketplace. For example, a restaurant might be generally described as performing food creation and delivery functions to get food to diners. Convenience stores can provide comparable delivery mechanisms/locations for food. A well-established fast food chain could potentially be threatened by a smaller competitor partnering with a big convenience store chain to grow its market presence significantly.
- Another strategy exercise is determining who else serves your customers in complementary or even unrelated ways. If any of these organizations could use relationships with your customers to grow a presence and compete more directly in your market, they’ve got to be considered potential competitive threats.
Using these three exercises for strategic thinking will better prepare you to anticipate and position your business against competitive threats your potential competitors may not even realize as opportunities yet. – Mike Brown