How much should you care about competition?

Are you always looking over your shoulder at your competition? It probably depends on your situation. In the not-for-profit sector, competition sometimes sounds like a dirty word (despite the competitive realities of the sector). In other industries it’s a knock-down drag-out fight for market share – credit cards, cars, fast food, entertainment…

Competition, for all that it can be stressful to businesses, can bring many benefits – innovation, lower prices to the buyer, and opportunity.

But even if you are in a highly competitive arena, that doesn’t mean your competition should be your main focus. In fact, there’s a lot to be said for the notion that you shouldn’t focus on your competition at all – instead, focus on your customer.

I’m not sure you can’t have it both ways, though. Because when you look at your competition, you need to look at them through your customer’s eyes – otherwise you’re wasting your time. Look at your customer, then think about the needs or wants your product or service fulfills for them.

Then – and only then – look at the competitors (or substitutes) that could also fulfill that need. If you don’t look at it first from the perspective of the customer, that’s when you risk an arms race with a competitor over features the customer doesn’t want in the first place.

There are all sorts of benefits to keeping an eye on the competition, including using them to understand the whole ecosystem of your industry – customers, suppliers, complements, substitutes, regulators, and so on. Your competitors might be potential collaborators, allies, or partners.

There are times, though, when just keeping an eye out isn’t enough – when you should really invest some time and energy into a systematic analysis:

  • Before you commit to a strategy or make an investment. This is just straightforward due diligence but it’s surprising how often it’s overlooked. This should be part of strategic planning, whenever and however you do it, and particularly so if you are about to tackle a whole new set of  competitors.
  • To explain the otherwise inexplicable. Are your revenues taking a nosedive? Are your membership renewals suddenly shaky? Can you feel your voice getting weaker? If you don’t know why this is happening, time to take a look around.
  • When someone new enters the market – especially where there might be a range of competitive responses.

Competitive analysis doesn’t have to be exhaustive. Don’t boil the ocean. Don’t do a complicated grid comparing a zillion different competitors across a dozen attributes and call it good once that’s filled in. (At the same time, a single slide unsupported by actual research isn’t remotely adequate.)

Push harder. Focus on what’s important to your customer, what’s relevant to your own strategy and its potential to succeed or fail, and draw conclusions. Maybe that means taking drastic action. But it’s also a completely valid conclusion to see your competitor do things differently and do nothing about that insight – you’ve got your strategy, they’ve got theirs, let’s see how it plays out.

All in all, it’s better to know what’s going on than not know. The key, once you have a solid systematic analysis in hand, is in what you do with it.

If competition is on your mind, and you’d like to know how we can help you understand your industry landscape, please get in touch.

Image by tableatny on Flickr via Creative Commons.

Contact us at or call 416-737-3935 to discuss how we might be able to help.


We offer resources to help leaders of associations and other not-for-profits think about their approach to strategy and governance, from various perspectives.