4 Types of Competitors To Watch Out For
When you think of your business’s competitors, who are you considering?
There are four main types of competitors who may be in the running for your customer base and market share. Firstly, direct competitors – those that offer the same product with the same goal as your own. For Coca-Cola, it’s Pepsi; for Mac, it’s PC – these are the competitors that are most easily identified, and often seen as a biggest threat.
Indirect competitors are those that offer a different product, but with the same goal and consumer resources. One example of this is the hotel industry versus Airbnb. While travellers previously reached to hotels for their temporary lodging at a moderate-to-high price, Airbnb came into the scene offering home-shares that are not only less expensive, but are unique, home-y, better reflect the local community, and offer more than just a typical bed-and-bath combination. (Glusac, 2016)
Replacement or potential competitors are those that offer a different product and have a different goal, but use the same consumer resources. When Uber and Lyft came into the transportation scene, they threatened the taxi and limousine industries. However, their shared customer base still has alternative choices, such as taking public transportation, or even walking. The challenge with these competitors is not convincing people to use Uber or Lyft over a traditional taxi; it’s convincing them to use this type of service at all.
Then, there are SEO competitors – those that compete with you in search engine results. Take Airbnb: If you search for “vacation rentals”, Airbnb is not first, second, or even third result you will find. Their SEO competitors include other sites such as HomeAway.ca, Trip Advisor, and Expedia.ca. SEO competitors can include any of the previous three types of competitors mentioned, or even unrelated topics could be the ones taking valuable attention away from your site.
There’s also a fifth competitor that you may not even realize exists – your customers. Customers are constantly evolving, as are their needs and desires. When you look too closely and solely to the competition, you may make the mistake of trying to one-up what competitors are doing for customers rather than finding new ways to fulfil your customers’ changing needs. In order to stay relevant and successful, you need to listen to your customers, watch for trends and changes, and adapt your own model to suit the ever-changing consumer landscape.
Bonchek, M. & Cornfield, G. (2016). Focus on keeping up with your customers, not your competition. Harvard Business Review. https://hbr.org/2016/04/focus-on-keeping-up-with-your-customers-not-your-competitors
Glusac, E. (2016). Hotels vs. Airbnb: Let the battle begin. The New York Times. https://www.nytimes.com/2016/07/24/travel/airbnb-hotels.html