Information overflow is one of the biggest problems in the world. Today you can find a lot of information about any topic anywhere (well “almost” anywhere) instantly. There is abundance of information which has created a problem in itself i.e. how to use it without losing key data points? Companies have made fortunes by organizing, presenting and searching information.
Information abundance and availability has done great for the world. It has leveled the playing field in many ways. People can make informed decisions. You get the breaking news the same time as anyone else in the world. You can analyze the archives from years back just like anyone else. But even after having access to the same information some people can make better decisions than others. That’s because just having information is not enough. The important thing is how can you leverage the available information?
Information can be leveraged by converting it into knowledge. Knowledge is a result derived out of the information through perception, learning and reasoning. Knowledge is precious. It is actionable. The differentiating factor lies in how well you are able to extract the knowledge out of the information to make critical decision, how well can you apply the learning from historical scenarios to predict the future and how well you can apply analytical reasoning to reach to the optimal results.
Technology that plays a major role in organizing the information plays an equally important role in converting it into knowledge. Complex algorithms that would adapt with usage plays a critical role in knowledge generation. Another important element in this process is human input to absorb the knowledge and make decisions. The idea is to process the information and synthesize the data to derive intelligent conclusions. This is more of a cyclical than a linear process. A process where information flows in and gets processed, knowledge is extracted, decisions are made and the processing algorithm and decision-making process gets adapted based on efficacy of the results. The adapted infrastructure is used to further take information and produce knowledge.
How well you know your competition plays a major role in your success. But let alone knowing them, it’s not always obvious to mark the competition right. It’s like marking the target for a shooter. Even the ace shooter can’t win if she is not able to mark the target right.
Take credit card networks for example. There is Visa, Master Card, Discover and American Express. Primarily competition here is with cash and checks. These networks are in some way competing against each other as well, but their main competition is other forms of payment. If you look at all forms of payments as the whole pie, and credit (and debit) cards as a part of that pie, it makes sense for each of these companies to increase the share of cards based payment first and compete with each other next.
There are so many other examples where competition becomes clear when you look at the broader purpose your product is trying to solve. Vending machines compete against retail stores and outlets, Google adwords is primary competing against television channels and print media for ad dollars and so on.
One interesting case is to spot a competitor when the competition is not really trying to compete with you. Consider bottled water for example. Who are these bottled water manufacturers competing against? Their primary competition is free-flowing tap water. No one is marketing or selling tap water. It is free, it is always there and (in most cases) is abundant. Bottled water manufacturers want people to trust and drink water packed in a bottle more than the free-flowing tap water.
In each of the cases we discussed here, there is competition amongst competing brands in the same category, but we need to make sure we don’t lose the complete picture and miss the primary competition.
There is one special case where you are competing with a previous version of your own product. For example Office 2007 when released competed primarily against Office 2003. Same is true to a large extent in case of progressive releases of monopoly products like iPods. This makes competition more interesting because you are in a way competing against yourself. You are out doing yourself and maintaining pace against smaller competing brands.
Knowing the right competition can help you tune your marketing message accordingly, place your product in the market appropriately and do your future product development with the right target in sight.