Ichuan

Every week before a game, professional football coaches and players spend hours and hours preparing for the next week’s game. In addition to the time they spend working on their own skills and plays, they spend an enormous amount of time studying their opposition. They analyze their competition’s strengths and weaknesses, look at their own strengths and weaknesses, and then formulate their strategy based on that. If their team has a great running game, and the opposing defense is horrible against the run, they will choose to highlight their ground game. They have to first understand themselves, and then understand their competition to properly formulate a strategy.

The same is true in business. It is essential that you know your competition. Sometimes it’s easy to identify and combat your competition, but let me point out to you a few scenarios you may not have considered when sizing up your competitors and formulating your strategy. You can classify competition into three general categories: direct competitors, indirect competitors, and the dreaded “inertia.” To illustrate these three kinds of competition, let’s use weight loss products.

Let’s say you’re marketing an all-natural weight loss product that a person takes in the form of pills that metabolically “melts” fat away. Remember there are three categories of competitors — direct, indirect, and inertia. Who are your direct competitors? First of all, the other 50 to 100 products on the market that are pills that metabolically melt away fat. There are a ton of them. You could also include similar products, like weight loss shakes, weight loss skin patches, products that you drink, and things like that. These are all products that the customer could buy instead of yours that at least claimed to do the same thing.
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