Roger L. Martin wrote a blog post titled Strategy and Competitors: Should We Pay Attention to Them? (19 June 2023).
Hat tip to Prof. Bruce Clark: for bringing this post to my attention with this tweet: “You can pay too little attention to competitors. And you can pay too much. Roger L. Martin on seeing properly and finding the right balance.”
« The Argument Against Paying Attention to Competitors. The way leaders achieve and maintain their leadership is through uniqueness. They do things differently than anybody else in their space, and that enables them to have a superior value equation. They either generate superior value at similar cost or similar value at lower cost due to a unique set of choices. »
« In driving school, you are taught that you will instinctively steer your vehicle in the direction that you are looking… Similarly, that is what can happen if you stare closely at competitors… And if a given competitor is succeeding at something, you are tempted to imitate… All the time invested in imitating will take away from energy invested in uniqueness. »
« Rigorously benchmarking competitors — as many companies do with a dedicated competitor intelligence department — is likely to do more damage than good. Obsessing about competitors and simply mimicking anything that works for them is a recipe for the kind of convergence that I hate. »
« The Argument For Paying Attention to Competitors… You don’t want a competitor to get the jump on you in a way that provides it with the seeds of advantage…. The biggest competitive danger is not knowing what a competitor is up to. »
« The Optimal Territory in Between. As with listening to customers, the answer to the question of whether you should pay attention to competitors lies somewhere between the extremes. »
« if a competitor is working on answering questions you haven’t yet recognized that you should be asking, you are in trouble. »
« When Gain took off from being a tiny southeast regional brand to become the #2 US laundry detergent (after its family member Tide), its competitors should have been asking, what did P&G see about consumers that none of them did? The answer was that there is a sensorial segment that cares more about the scent of their cleaned laundry than anything else. »
« When BMW’s and Mercedes-Benz’s started showing up in Walmart parking lots, mainline retailers should have been asking, what is wrong with our model of well-to-do shoppers that would make this an impossibility? »
« The key is to ask what competitors are seeing, not obsess about what they are doing. Focusing on what they are doing will lead to convergence which is bad for all. Focusing on what they are seeing will spur you to ask better questions and get to new and valuable insights faster. »
« ask yourself whether something that your competitor is doing suggests that it sees something about customers in your business that you haven’t yet seen and therefore are not yet working on. Or is it utilizing a technology to serve its customers that you haven’t yet seen as viable for use. »
« If you conclude that it is an interesting customer insight or a promising technology, don’t jump immediately to how to replicate. Think about how you can meet that customer need distinctively or use that technology distinctively. The Porsche Cayenne didn’t replicate the Ford Explorer. But it recognized, even though the auto press was outraged that a venerable sports car company was making an SUV, that drivers wanted a different kind of Porsche… While traditionalists excoriated Porsche for launching its SUV, it now sells five times more SUVs than sports cars in the US market. »
Roger L. Martin is the former Dean of the Rotman School of Management at the University of Toronto. He is the author of Playing to Win: How Strategy Really Works and When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency.
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