First, I’d like to highlight that this post was inspired by a talk I gave back in 2022 at The Market and Competitive Intelligence Conference organized by The Institute for Competitive Intelligence (ICI). I can’t emphasize enough how much value Rainer Michaeli and his team added to the CI community throughout the last two decades with their expertise, conferences and trainings. Thank you!
In a fiercely competitive market, it's easy to view the competition as the problem and an obvious cause for failure. But what if we reframed our perspective? What if competition was actually the key to unlocking our greatest potential? The reality is that businesses can not only survive but thrive amidst fierce competition. To illustrate it, let’s talk about ice cream!
The Great Ice Cream War: A Sweet Victory for Virevent
Imagine a quiet street in Montreal, with several established ice cream shops but only one player dominates the street: Virevent. Against all odds, Virevent not only competes but dominates, winning the local "ice cream war". How did they do it?
Virevent's success wasn't accidental. It was the result of a carefully crafted strategy built on a deep understanding of their customers and a relentless focus on delivering a superior experience.
Here are some of the key ingredients to Virevent's success:
A Unique Value Proposition: Virevent didn't just sell ice cream; they sold an experience. Their homemade-style ice cream, with unique and rotating flavors, made customers feel like they were getting something special.
Customer-Centricity: From providing masks during the pandemic to the owner personally opening the door for customers with their hands full, Virevent demonstrated a genuine care for its patrons. They paid special attention to both adults and children, with small tables, chairs, music and games for the little ones.
Agility and Resilience: Virevent was quick to adapt to changing circumstances, such as the pandemic, and was one of the first to provide masks to customers. This demonstrated their ability to be agile and resilient in the face of challenges. They stayed open while showing genuine care for their customers.
A Strong Brand and Go-to-Market Strategy: Virevent built a simple yet memorable brand and actively connected with customers through social media. Their pricing was affordable and slightly below the market average, making them an attractive option for families.
Strategic Partnerships: To keep their flavor selection fresh and exciting, Virevent partnered with suppliers from outside Montreal, even sourcing some flavors from as far as Sri Lanka.
Why Do Companies Fail? The Enemy is Often Within
While Virevent's story is a testament to the power of a well-executed strategy, many companies falter in the face of competition. The reasons for failure are often internal. He points to several common pitfalls, including:
Weak Leadership and Bad Culture: A lack of clear direction from the top, coupled with a toxic culture of groupthink, vanity, and arrogance, can stifle innovation and lead to poor decision-making.
The "We've Arrived" Syndrome: Past success can be a dangerous trap. Companies that become complacent and believe they have "arrived" are often the most vulnerable to disruption.
Ignoring the Signals: A failure to listen to customer feedback and market signals is a recipe for disaster. It wasn't Uber that disrupted the taxi industry; it was the bad customer experience. Similarly, Airbnb didn't disrupt the hospitality industry; the lack of availability and high prices did.
The Illusion of Knowledge: Perhaps the most dangerous pitfall of all is the illusion of knowledge. As Stephen Hawking famously said, "The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge".
The Path to Success: The 10 Areas To Improve
So, how can companies avoid these pitfalls and achieve lasting success? First, we must be open and willing to be different and do things differently. Business success is for those companies willing to continuously learn, adapt, iterate, and pivot when needed. All of that requires a deep understanding of markets, customers, competitors and their buyers.
Here are some key areas for to learn about:
1. The WHY
“When the why is clear the how is easy.” - Jim Rohn
As Simon Sinek's described in his "Golden Circle", the WHY is central. Companies need to identify their own WHY. It is maybe the most important thing to know about the company. Not only that WHY of your competitors. It will help you to understand their HOW and WHAT.
2. The Value Proposition
Good companies learn about their customers unmet needs then offer solutions to their “hair on fire” problems, not the other way around. It is usually a good idea to find problems then create solutions for them, not the other way around. Yet, many companies still believe in their genius without any market nor customer validations. For successful companies, the performance is more about strong value propositions and how well those are responding their customers needs.
3. The Culture
Culture Eats Process For Breakfast
They have a strong culture of excellence. It is not about bringing your dog to the office. It is not about free lunch and coffee. Successful companies focus rather on ensuring their core values are the same as their operating values as Alan Weiss would put it.
Many companies claim values but those are forgotten as soon as those are written. Those “values” looks good on reports and walls but unless practiced in the real world those are just BS.
Maybe to best illustrate the point about culture, Reid Hastings, Co-Founder of Netflix said it best his book No Rules Rules, “Great culture is stunning colleagues”.
Talent density matters more than free lunch.
4. The Brand
People Buy Your Brand Before Your Product
Obvious you might say but people and organizations buy brands before they buy products. The biggest success of Apple wasn’t the iPhone, it was the brand they were able to build. In the same category, no other brand can really compete with Apple so far. People pay premium for that. Decades after Steve Jobs and Steve Wozniak built the company, people are still in love with the brand. This is very hard to achieve and it can’t happen by mistake. Strong brands are built. Don’t believe me? Take a few minutes to listen to Steve Jobs himself talking about brand marketing:
5. The Experience
Whole Product: Think experience beyond features.
Good companies’ products start and end with the experience in mid. Some of their favourite activities: Product Discovery, User Research, Experimentation, Extreme Experimentation, Failing forward, Iteration, Design Sprints, Design Thinking are just few of them. As a competitor analyst, Don’t only learn about competitors features. Learn about the way they build products (release cycles).
Learn about their agility and velocity. Learn about their users’ behaviours, satisfaction and frustrations. Products are built by people. Analyzing whole products gives you so much more than just comparing competitors feature-for-feature to build a “comparative” webpage.
6. The Product
The Whole product beyond features set. Problems with product design are problems with the organization. They iterate, experiment with customers, fail forward, improve
As a competitive intelligence professional, compare a competitors’ capability and feature according to:
The Feature: What it does?
The Experience: How it does it?
The Interface: How it looks like?
7. The Agility
“Be Formless and Shapeless like water.” Bruce Lee.
Instead of blaming the competition, good companies adapt, iterate, learn, pivot, or persevere when the WHY is strong. They usually have their business models well defined, and continuously enhanced / revisited to fit their market realities and customers evolving needs. As a competition analyst, and if you want to have a deeper understanding of your competitors, reverse engineer their business models. You will learn a lot about how they are doing business and whether their approach is working or not. It intelligence is out there waiting for to pick it up.
8. The Buyer vs. The User
The economic buyer makes the sale, the end-user makes the renewal
Learn about competitors’ buyers personas. Learn even more about their users personas. Learn about the behaviours of both buyers and users of competitors’ products. They care about the buyer and even more about the end-user. The buyer might not be the end-user.
Take care of both the buyer and the end-user. Take buyer makes the sale, the end-user make makes the renewal. Loyalty increases the Lifetime Value (LTV) of the customer. LTV increases revenue.
9. The Distribution
They nourish the awareness stage with Top-of-Funnel (TOFU) activities
As a competitive intelligence professional, Compare competitors’ go-to market efforts from the top to the bottom of their funnel. Provide a similar picture to your own GTM / Sales Funnels. More specifically, you need to understand what they are doing at the different stages of the prospect journey:
Awareness Stage with Top-of-Funnel (ToFu)
Consideration Stage with Middle-of-Funnel (MoFu)
Decision Stage with Bottom-of-Funnel (MoFu)
If you want to learn more about TOFU, MOFU, and BOFU, do your homework ;)
10. The Price
Keep it clear, Keep it simple, Keep it transparent!
As simple as it seems, too many companies still lose deals and customers due to their poor and confusing pricing practices. Some companies make an uphill battle for the prospects to get the amount they’ll have to pay. By the time they get back to the prospect with a quote, the prospect has already signed with the provider of the next best option.
In other instances, they make the pricing so confusing that it looks impossible for the customer to really understand what they are going to pay. We crave simplicity. We crave clarity. Also, no one wants to justify a budget for a product and service without a clear idea of what the total bill will be. How about taking pricing out of the conversation? How about focusing on your product value rather than price negotiation? Simplicity always wins in the long run.
While not holistic, focusing on these areas and embracing a mindset of continuous improvement, or "Kaizen" (Kai = Change, Zen = Good), businesses can build a sustainable competitive advantage. It is not complicated, it is obvious but seeing the obvious and doing something about requires the openness and willingness to change. That is the least obvious part for many.
The Power of Competitive Intelligence
Competitive Intelligence (CI) is not a high-level search for talking points to trash talk about competitors; it's about developing a deep understanding of your markets, your competitors (inside-out), and more importantly your own organization (inside out). By reverse-engineering your competitors' business models, analyzing their value propositions, and learning about their product development processes, you can get more serious about identifying opportunities for differentiation and innovation.
Final Thoughts: Competition as a Catalyst for Growth
The key takeaway is a powerful one: competition is not something to be feared nor overlooked, but rather something to be embraced. It pushes us to be better, to innovate, and to deliver more value to our customers. By focusing on our own organizations, building a strong culture, and relentlessly seeking to improve, we can not only survive but thrive in even the most competitive of markets. So, the next time you feel the pressure of the competition, remember the story of Virevent and ask yourself: how can I use this as an opportunity to become the best version of myself?
