Walking down the street, some customers may choose to grab a to-go lunch from the coffee shop, while others prefer the restaurant. You both seek to solve the same pain points, but the means are different.įor example, a restaurant and coffee shop in the same neighborhood could be replacement competitors. Replacement competitors.Ī replacement competitor offers an alternative to the product or service that you offer. They may call a local painter to fix the mistakes. Consider someone buying supplies from Lowe's to re-paint their home -only to do a sloppy job. Indirect competition isn't necessarily a zero-sum game. Again, the category is the same but the product offerings differ. Here's another example - residential painters experience indirect competition with home improvement chains like Home Depot or Lowes. While they both seek to solve the same problem (feed hungry people), they provide different products to solve it. Indirect competitors are businesses in the same category that sell different products or services to solve the same problem.įor example, Taco Bell and Subway fall under the same category - fast-food - but they offer entirely different menu options. ![]() For example, if you buy a hamburger at McDonald's, it's not likely you'll swing by Burger King to buy another one. Since direct competitors sell similar products in a similar manner, this type of competition is often a zero-sum game - meaning, a customer that buys a competitor's product won't buy yours. For example, after the success of Twitter’s Periscope app, Facebook pivoted its focus to live video to keep up. So are a handful of realtors servicing one area.ĭigital companies also see direct competition. Two shoe stores in a rural town are direct competitors. But direct competition isn't exclusive to well-known national or international brands. Some famous examples of direct competitors include Apple versus Android, Pepsi versus Coca-Cola, and Netflix versus Hulu. They also vye for the same customer base. ![]() These are businesses offering similar (or identical) products or services in the same market. ![]() Direct competitors.Ī direct competitor probably comes to mind when you think of your competition. Here, we'll cover the three types of competitors to watch, and five ways to identify them. Some are direct, while others may take more time to uncover. But identifying the competition isn't always obvious. All businesses have competition - and knowing yours is key for innovating your products, services, and marketing strategies.
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