Competitor monitoring, part II
What is competitor monitoring for?
Competitor monitoring supports business decisions: setting prices, developing the offer, marketing communication and expansion into new markets.
Competitor monitoring is more than an add-on to strategy or a collection of curiosities about other companies. Its real value lies in supporting business decisions: setting prices, developing the offer, marketing communication and expansion into new markets. Well-run analysis helps you understand how the market is changing, spot emerging trends earlier and judge which competitor moves to follow and which to avoid. The market constantly sends signals. Prices, products, brand communication, customer expectations and business models keep changing. Some companies react to these changes quickly, while others notice them only when sales start to suffer. Competitor monitoring helps to close this gap. Gathering information is only the first step. What matters is understanding what is happening around the company and what this means for its strategy.
How does competitor monitoring help spot market changes early?
Monitoring tracks where the market is heading: if several players start taking similar steps, it may signal an emerging trend, giving the company time to prepare a response.
One of the main functions of monitoring is tracking where the market is heading. A single change in a competitor's offer may not mean much. If, however, several players start taking similar steps, it may signal an emerging trend. This applies to products and services as well as prices, distribution methods, marketing campaigns and customer communication. A company that notices such a change early enough gains time to assess the situation and prepare a response. Monitoring can also be a source of inspiration. This does not mean copying competitors' ideas. What matters more is seeing which solutions appear in the market and how customers react to them. Sometimes the most useful lesson comes from an action that failed rather than one that succeeded.
How can you tell if a competitor's strategy really works?
Audience reactions to a competitor's campaigns and communication show whether its message works, and social media mean this reaction can now be observed almost instantly.
A particularly valuable source of information is the market's reaction to competitors' campaigns and communication activities. An advert may look attractive from the company's point of view, but only audience behaviour shows whether its message actually works. Social media mean that this reaction can now be observed almost instantly. Comments, discussions, changes in the tone of communication or modifications to a campaign may indicate that the original message was not properly understood. Sometimes a campaign starts with a simple, bold message, and a few weeks later the brand begins to explain its offer in much more detail. Such an evolution may be the result of customer reactions and a signal for other companies operating in the same category. Competitor monitoring therefore shows both what a company communicates and how the market receives that communication. For a company preparing its own campaign, this is valuable knowledge. It can help you avoid mistakes that someone else has already paid for.
Does competitor monitoring reduce the risk of business decisions?
Competitor monitoring can form part of due diligence, allowing decisions to be made on a broader and better documented picture of the situation, although it does not guarantee they will prove right.
Market analysis has one more, less often discussed dimension: it can form part of due diligence when making business decisions. Board members make decisions under uncertainty. Not every decision will succeed, even if it seemed justified at the time. What matters, however, is how the decision was prepared. This is where the Business Judgement Rule comes in. For members of a company's management and supervisory boards, it means that an unsuccessful business decision does not necessarily breach the duty of due care, if the decision was made in loyalty to the company, within the limits of justified business risk and on the basis of information, analyses and opinions appropriate to the circumstances. Well-prepared market or competitor monitoring can be one element of such a decision-making process. The difference is fundamental. A decision made on intuition, without checking the market environment, is one thing. A decision preceded by an analysis of prices, customer behaviour, competitor activity and changes in the industry is quite another. Monitoring does not guarantee that every decision will prove right. It does, however, allow decisions to be made on the basis of a broader and better documented picture of the situation.
Pricing decisions require knowledge of the market
The first area in which competitor monitoring can have a direct impact on business is pricing policy. A product's price does not exist in a vacuum. Customers compare it with alternatives, other companies' offers and the value they believe they receive in return. Value and price are not the same thing. Customers buy, above all, a solution to a specific problem or a way of meeting a particular need. Only on that basis do they assess how much they are willing to pay for the value offered. That is why the market has both very cheap devices and flagship phones or professional cameras costing many times more. All of them may perform a similar basic function, but customers judge their quality, capabilities, brand, ease of use or prestige differently. Monitoring competitors' prices should therefore answer more than the question how much do similar products cost? A far more important question is: what value do competitors offer at that price, and how does the customer perceive it?
Competitor analysis supports the development of products and services
The second important area is decisions about the offer. Changes introduced by competitors may be the first signal that a new need or technology is emerging in the market. The actions of leaders and of companies that are only trying to win such a position are particularly important. A new product feature, an additional service, a change in the sales model or entry into a new category may at first look like an experiment. Over time, however, they may become the standard for the whole market. The history of many sectors shows that the advantage was often gained by companies that spotted such signals early enough. Good examples are the development of digital photography and of renewable energy. In both cases, technological change gradually transformed entire markets. Companies that treated the first signals as a passing curiosity may have been surprised by the pace of transformation. Those that started analysing new solutions earlier had much more time to adapt their strategy. Competitor monitoring should therefore not be limited to checking rivals' current offer. You should also watch experiments, pilots, new product lines, investments and technologies that are only just starting to appear in the market.
Competitor monitoring helps build more effective marketing
The third area is marketing communication. The offer, price and marketing are closely linked. Even a very good product may struggle to sell if the company cannot properly explain its value to the customer. That is why one of the most important questions during monitoring should be:
What language do competitors use to speak to our shared customers, and does that language really work?
You can analyse, among other things, how benefits are presented, sales arguments, advertising content, the communication channels used, customer reactions and changes introduced in successive campaigns. The main test should not be whether the marketing team or the board likes the advert. The final judge of the offer is the market. This is especially important for new ventures. One of the biggest threats to start-ups is the gap between what the founders consider a great product and what customers actually need. A company may be convinced its solution is unique, while the market does not see a good enough reason to pay for it. Observing competitors and their customers' reactions makes it possible to notice such gaps sooner.
How does competitor monitoring support expansion decisions?
In sectors that develop through consolidation, you need to analyse where the whole industry is moving, as successive players scaling up, entering new markets or joining forces may change the rules of competition.
Monitoring can also matter when making decisions about expansion. In many sectors, markets develop through consolidation. Companies acquire competitors, enter new markets, scale up their operations and build corporate groups. A good example is the automotive industry, which went through an intensive consolidation process at the turn of the 1990s and 2000s. For some manufacturers, scaling up, alliances and acquisitions became a way of staying competitive. In such conditions, observing a single competitor is not enough. You need to analyse the direction in which the whole industry is moving. If successive players are scaling up, entering new markets or joining forces, this may mean a change in the rules of competition. A company that notices this too late may find that its current scale of operations is no longer sufficient.
Who exactly should you monitor?
You should monitor the group of competitors, whether direct, indirect or substitute, that matters most for a specific business decision, considering market share, similarity of offer and pace of activity.
One of the basic problems with competitor monitoring is choosing the companies that are really worth observing. It is impossible to track every company operating in the market effectively. The broader the list of competitors, the greater the risk of producing a huge amount of data that leads nowhere. That is why the starting point should be a market analysis and determining which group of competitors matters most for a specific business decision. These may be direct, indirect or substitute competitors. The most important question, however, is:
How might the actions of selected companies affect our business?
Only the answer to this question lets you draw up a sensible list of companies to watch.
Market share and recognition
The first criterion may be the competitor's position in the market. You should watch companies that set the tone for the whole category, hold a significant market share or have a brand capable of influencing the behaviour of customers and other companies. A leader's actions often reach beyond its own organisation. A price change, a new sales model or the introduction of a particular feature can trigger a reaction across the whole market.
Similarity of offer and target group
The second criterion is similarity of offer and customers. If a company wants to better tailor a product or its communication to a specific audience, it can be particularly valuable to observe companies competing for exactly the same customer. You can then analyse the offer as well as the language of communication, reach channels, promotions and the way the product is positioned. Such a comparison shows both what competitors are doing and how they try to persuade the shared customer to choose their offer.
Pace of a competitor's activity
The third criterion should be market activity. The largest competitor is not always the one that needs to be watched most closely. Sometimes a much more interesting source of information is a smaller company that launches new products very quickly, invests heavily in marketing or experiments with new sales channels. The pace of activity may be the first signal of a change in competitive position. This also matters when planning your own communication. A company should know how active other players are and how crowded the space is where it will try to reach its audience. Simply increasing the marketing budget does not guarantee visibility if the brand communicates in a space where competitors invest much more and operate on a far larger scale.
What is the biggest mistake in competitor monitoring?
The biggest mistake is treating monitoring as an end in itself. A report containing dozens of pieces of information about competitors may look impressive, but its value is small if it does not help answer a specific business question. Should we change the price? Should we expand the offer? Should we modify our communication? Should we enter a new market? Is a competitor really gaining an advantage? Is a trend emerging that we need to respond to? These are the questions that should determine the scope of monitoring. A well-conducted competitor analysis makes it possible to spot changes earlier, understand customer behaviour better and reduce the risk of decisions made solely on the basis of intuition. It can suggest when to act, but just as often its most important conclusion will be a decision not to do something. That is its strategic value. Competitor monitoring gathers information about other companies, but its purpose is better decisions about your own business.
Audio material generated using artificial intelligence based on the webinar "Competitor monitoring in 3 simple steps" held on 28 July 2026, hosted by Rafał Wiśniewski, Managing Partner of MarketHub Sp. z o.o.; edited by Katarzyna Kucia
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