What can you learn from your competition and how can you learn it? I’m Mike Sandman and I’m going to be talking to you about learning from your competition.
The formal term for learning about competition is competitive intelligence. That sounds like it could be a synonym for corporate espionage, but it’s not. Understanding your market by observing and talking to competitors is something you can do legitimately. In these sessions, you’ll see what you can learn and how to use it. Let’s start with looking at what drives competition in the market. Competition varies from market to market, often driven by forces that are really beyond the control of competitors. If you look at a marketplace you can see that current competitors obviously take actions that are meant to protect their positions, but they’re not just responding to other competitors in the market, they’re also responding to the threat that new entrants will come in, they’re responding to the power of customers if customers have lots of choice, they’re responding to the availability of potential substitutes and to the power of suppliers. This model is called the five forces model, and it was developed by a professor at Harvard business school Michael Porter. It’s a very useful explanation of the ways in which outside forces affect competitors and make them compete in the marketplace.