The One Assumption Marketers Can’t Afford To Make About Their Competition
No brand is an island. Whether you acknowledge it publicly or not, the odds are that at least one company exists that poses a threat — or at the very least, an alternative — to the product or services that your company offers.
While some degree of competitive head-to-head is inevitable, many marketers and strategists make one common mistake when evaluating their competitive universe: they consider only existing competitors.
Direct competition with existing competitors may be the most pressing and obvious of competitive forces, but according to Harvard Business School Professor Michael E. Porter, rivalry among existing competitors is just one of five key competitive forces that should impact your strategy for achieving superior performance.
In 1979, Porter released his groundbreaking publication “How Competitive Forces Shape Strategy,” which outlined the five main competitive forces that shape strategy. According to Porter, competition is often too narrowly defined to include only core competitors.
In addition to rivalry among existing competitors, Porter’s Five Forces framework includes: threat of new entrants; bargaining power of buyers; bargaining power of suppliers; and threat of substitutes.
Applying Porter’s Five Forces Framework To Your Content Strategy
While the competitive impact of suppliers’ bargaining power exists largely beyond a marketer’s domain, the remainder of Porter’s Five Forces are especially acute competitive forces that marketers can and should evaluate.
Consider the threat of new entrants, for example. Social networks and new marketing technologies have lowered the barriers to entry for brands to communicate with target audiences and distribute content at scale. Given the opportunity, a nimble new competitor can get into market and gain a significant share of voice on key digital channels in a matter of months.
For marketers, protecting against the threat of new entrants on digital channels requires a vigilant understanding of what your target audience cares about and the best ways to reach them. (Hint: TrackMaven can help — learn more here.)
Consider Luxottica, the luxury and sports eyewear company with approximately 7,000 optical and sun retail stores in North America, Asia-Pacific, China, South Africa, Latin America and Europe. Up until 2010, Luxottica had a virtual monopoly on the eyewear industry — that is until an eyewear upstart called Warby Parker entered the market.
The year 2010 also brought the launch of a new photo-sharing social network — Instagram. Over time, the combination of new entrants and the introduction of new digital marketing channels proved a challenge to Luxottica — take a look at Warby Parker’s complete dominance in share of interactions on Instagram versus Luxottica below.
So, what’s a competition-wary marketer to do in the face of these major competitive forces? According to Porter, the central tenet of any competitive strategy is not being the best — it’s delivering value. Read more on Porter’s take on why being unique is better than being the best here.
For more proactive marketing tips, you might like 5 SMARTer Marketing Goals For The New Year.
Kara Burney is the Content Marketing Maven at TrackMaven, the Competitive Intelligence platform for Digital Marketers. Have content marketing questions or topics you'd like covered on the TrackMaven blog? Tweet her your ideas! See more of Kara's posts
