Understanding True Competition

As business leaders know - competition is out there.

But do we always really know just exactly who or what our true competition is.

In “The Contrarian Effect” by Michael Port and Elizabeth Marshall an interesting example is shared:

By offering low-cost fares, frequent flights, and fast, friendly service, Southwest quickly became a customer favorite — and a threat to the competition. Instead of focusing on its airline competitors, the company understood that the automobile was its true competitor and that it had to provide enough value for business travelers to decide to fly instead of drive. (p. 148, emphasis mine)

To be a true innovator and get a real competitive advantage we must first know who we are really competing against, and it may not always be what we think.

Quick Examples:

• Newspapers realizing that their true competition is not other newspaper companies, but actually people reading content online.  Many newspaper companies have found this out, but for many it might be too late, and others are trying to ignore it.
• Professional gym’s competition is not other gyms, but is rather the comfort of the couch, or doing something else that a client thinks and feels is more fun.  What can that gym do to change that reality to make their gym more fun, easy to do, and comforting?
• TV’s competition isn’t necessarily what’s on the other channel, but is really those who would prefer to watch it online, and with less ads and what they want to watch when they want to watch it.  This is the reason sites like www.Hulu.com exist.  People want the control and ease of choosing what they want to watch.  Some network companies are catching on and offer their shows online as well.

Question: who/what is your true competition?  How do you know that’s true?  And if it isn’t what is seems, what is it?

The answer will help you gain your competitive advantage.