3 minute read
Competitive strategy, including identifying your competitors’ strengths and weaknesses, helps businesses gain unique market advantages. Finding weaknesses in your competitors’ strengths can help you create lasting, successful business solutions.
Competitive strategy is more than just figuring out how to differentiate your product or brand in the marketplace. To create lasting strategies that differentiate your brand, don’t just focus on your competitor’s weakness. Instead, work to find the weakness in their strengths and position your product as a solution to that weakness. In this article, we explore the characteristics of competitive strategy, strengths, and weaknesses and explore how Barnes & Noble has used this strategy to carve out a unique place in the bookselling market.
Keep reading to learn more, or use the links below to jump to the section that most interests you:
- What is Competitive Strategy
- Finding Weaknesses in Competitors’ Strengths
- Real-World Example: Barnes & Noble vs. Amazon
Competitive Strategy
A competitive strategy is how businesses evaluate competitors and gain an advantage in their market. Competitive strategy may include identifying opportunities and executing tactics that help the business increase its products’ value, connect with new or existing customers and markets, and grow or gain revenue. Product managers are often responsible for conducting competitive analysis.
When building a competitive strategy, it’s important to distinguish between a weakness and a weakness in a competitor’s strength. Businesses can implement two primary tactics: capitalizing on competitors’ weaknesses or finding weaknesses in their strengths.
Finding Competitors’ Weaknesses
Your strategy might be short-lived if it relies on taking advantage of your competitor’s weaknesses. Once your competitor realizes you are gaining an advantage because of its shortcomings, it will focus on fixing them. Your competitor can acquire a company, license a new product or tool from a third party, or update its roadmap to fill the gaps. Although this might be a solid short-term tactic, once your competitor addresses the weakness, you must again shift your strategy to stay competitive.
Finding Competitors’ Strengths
A competitor’s strength, on the other hand, is generally not something it wants to change or “fix”:
- The strengths of large enterprise vendors, like IBM, HP, SAP, and others, are based on their breadth of offerings and lack of silos.
- The strengths of hosting companies like Rackspace and Amazon lie in remote hosting and cloud-based applications.
- Companies like Google make new products available regularly to drive innovation.
Finding Weakness in a Competitor’s Strength
The challenge for their competitors is to find the weaknesses in those strengths:
- Do the more prominent enterprise vendors have compelling offerings for small, one-off opportunities? Have they sacrificed best-of-breed solutions for generalized, one-size-fits-all products customizable only through high-cost professional services?
- Does IT want to move all applications to an off-site hosting provider? Would some applications provide better security or performance if they were available on-premises?
- Will Google support new apps for the long term? Can you bet your business on new technologies that may not stick around?
Those weaknesses might manifest as problems for your competitors’ or your market. If you take the time to identify the shortcomings of your competitors’ strengths, you can focus on creating products that solve those problems. Because they are problems with your competitors’ strengths, your competitors are less inclined to pivot or change their solution, making it less likely that the core problem behind your solution changes.
Additionally, because you looked to the market to find a unique, pervasive problem that people are willing to pay for a solution to, this helps ensure the longevity of your product.
Real-World Example: Barnes & Noble vs. Amazon
One well-known example of finding a competitor’s weakness in its strength is the historic battle between Barnes & Noble and Amazon.
Barnes & Noble’s strength lies in its brick-and-mortar customer experience. In the 2010s, it was known for personalized service, including on-site coffee and bagels and comfortable browsing areas. While this created a cozy, indulgent, and community-focused experience, this strength was a weakness for busy professionals who didn’t want to go to a store to buy a book.
Amazon identified this market and optimized the selection and purchasing process for users who didn’t want (or have time) to visit a bookstore. By enhancing its online selling options, Amazon quickly became a world leader in bookselling.
Despite a decade of lagging sales, Barnes & Noble staged a comeback. Bolstered by interest from “BookTok” and renewed interest in in-store shopping post-pandemic, Barnes & Noble redesigned their store layouts to encourage browsing and improve the discoverability of niche books. These strategic changes coincided with record sales and a footprint expansion, including opening dozens of new stores in 2023. Although Amazon’s strength was the ease of online ordering, Barnes & Noble recognized an opportunity to foster community connections in their bookstores and appeal to the desire for in-person browsing.
Ultimately, best way to build a compelling sales strategy for your product is to arm your sales team with talking points acknowledging a competitor’s strengths and then counter them. That’s the beauty of finding the weakness in a competitor’s strength.
