Where do you look?Posted: April 4, 2014
April 4, 2014
When you’re looking to see what’s going on with the competition, sometimes you have to look beyond the competition. But where?
One place you should always consider, even if it’s done infrequently, is at key suppliers to your competitors, as well as your own key suppliers. It is a well-established competitive strategy principle for firms to consider expanding downstream or upstream. That means a next generation of competitors may be coming from just inside your industry rather from outside of it.
Let me give you one real example. A company was faced with a problem. A very large company, operating in an adjacent industry, was reported to have just acquired a small manufacturing plant from a competitor. The company was, needless to say, distressed – this meant that a small competitor might be suddenly transformed into a new, powerful competitor –without notice!
But there was notice – this might’ve been anticipated. Going back several years, research would have disclosed that a key supplier to the plant that was sold had been purchased. Who purchased it? The very same large company that later purchased the plant. And that big firm indicated, at the time of the relatively low profile purchase, that it intended to expand its new business.
So in terms of doing your competitive intelligence, remember to look around. But also raise your head and look beyond your competitors. Look over that boundary, at your customers, your competitors’ customers, your suppliers and your competitors’ suppliers, for that is often where the next generation of your competitors will come from.