Are Your Competitors Really Your Competitors?

We often see our competitors as our main rivals, and we try to destroy them. However, these competitors are actually our complementors, helping us and our industry to grow.

Most companies think that they know who they are competing against. The main competitors of a company are generally the companies that are of similar size and offer similar products or services. The best examples are Nike and Coke, Adidas and Nike, and McDonald’s and Burger King.

Furthermore, if we expand the scope of our competitive landscape, various types of competitors emerge. Indirect competitors, such as Uber compared to traditional taxis, offer alternatives satisfying similar customer needs. Substitute competitors, like Online Streaming Services, are replacing cable television. Global competitors, local businesses, and traditional competitors with established market presence pose distinct challenges. Vertical competitors operate at different stages of the supply chain, contributing to the diverse dynamics of competition in various industries.

Various business frameworks such as SWOT analysis, Porter's Five Forces, Scenario planning, and the BCG Matrix, are applied for strategic analysis to mitigate the risk of competitors. Nonetheless, a more significant threat may arise from disruptive forces; for instance, headphone companies like Sony and camera manufacturers such as Canon and Nikon never anticipated that their primary competition would emerge from the mobile phone industry.

Are Your Competitors Truly Just Competitors, Or Could They Be Your Complementors?

When it comes to fierce competition, Coca-Cola and Pepsi stand out. Their long-term rivalry, known as the Cola Wars, has spanned over a century. Has Their Rivalry Destroyed Each Other, Or Has It Helped Them To Grow?

We all know the answer to this question. Their intense rivalry has spurred constant innovations, revolutionized marketing creativity, and lowered prices. They have engaged a mass audience. If one of them makes a move in the market, consumers are engaged and eagerly anticipate the rival's response. Today, one cannot discuss one rival without mentioning the other. Although Pepsi and Coke have had their ups and downs, it cannot be denied that the success of their rivalry has transformed the entire industry. Their competition has also driven them to diversify their portfolios and introduce new developments.

If we look at substitutes that can replace them both Pepsi and Coke are the major player in that industry. Brands such as Gatorade, Powerade, Lipton, Nestea, Aquafina, Kinley, Dasani, AMP, Monster Energy, Tropicana, Minute Maid, and many more are associated with Pepsi and Coca-Cola.

Thus, Competitors are Complementors!

Competitors can be viewed as complementors rather than enemies if deepen our understanding of how businesses operate within complex ecosystems where collaboration and interdependence can lead to mutual benefits.

Industry Growth: In many industries, overall growth benefits all participants. Competitors can work together to expand the market, increase consumer awareness, and create more opportunities for everyone. As the industry grows, individual companies have the chance to thrive.

Technological Advancements: Competitors often invest in similar research and development areas. Collaboration on certain technological advancements or standards can be beneficial for the entire industry. For example, common standards can lead to interoperability, making it easier for consumers to adopt new technologies.

Supply Chain Collaboration: Companies within an industry often share common suppliers or face similar challenges in the supply chain. By collaborating on supply chain optimization or addressing shared issues, competitors can improve efficiency and reduce costs for everyone.

Regulatory Compliance: Companies within an industry are subject to similar regulatory frameworks. Collaborating on compliance efforts can reduce the burden on individual companies and ensure that the industry maintains a positive reputation.

Innovation Ecosystem: Sometimes, competitors can work together in innovation ecosystems. Open innovation models encourage companies to share ideas, technologies, and expertise to drive collective innovation. By leveraging each other's strengths, competitors can collectively advance the state of the industry.

Learning Opportunities: Competitors can provide valuable insights and learning opportunities for each other. Observing the strategies and practices of competitors can lead to industry-wide improvements as companies adapt and adopt best practices.

Consumer Benefits: A focus on delivering value to consumers can lead competitors to collaborate on common challenges, such as improving product safety, addressing environmental concerns, or enhancing overall customer experience.

In summary, the perspective that competitors can be complementors recognizes the interconnected nature of industries. While there will always be a level of competition, there are also opportunities for collaboration and mutual benefit that can lead to the overall growth and success of the industry.