Competitor monitoring, part IV
Why does competitor monitoring matter?
Competitor monitoring helps you notice a technological shift, a new business model, a growing competitor or changing customer expectations early, and a lack of it can cost more than an extensive analysis.
Business history shows that a lack of competitor monitoring can cost far more than preparing even a very extensive analysis. Companies lose their position not only because they have a worse product. Often the problem is noticing a technological shift, a new business model, a growing competitor or changing customer expectations too late. On the other hand, companies that watch the market early enough can use emerging signals as a prompt to grow, acquire a competitor, change strategy or enter a new category.
The examples of Kodak, Pixar, Dollar Shave Club and Netflix show that competitor monitoring is not just about checking other companies' prices and offers. Its real value appears when it helps answer the question: is something happening in the market that could completely change the rules of the game in a few years?
Why can a small competitor be the biggest threat?
A small competitor that meets an important need in a simpler, cheaper or more convenient way can grow in importance very quickly, so monitoring should cover not only today's leaders.
Large companies naturally focus their attention on other big players. Yet many market changes begin much lower down, with a small company, a new technology or a business model that does not initially look like a real threat. A smaller competitor may operate in a marginal market, serve a niche customer group or offer a solution whose scale is small at first. If, however, it meets an important need in a simpler, cheaper or more convenient way, its importance can grow very quickly. That is why monitoring should cover not only today's leaders. It is equally important to watch companies that are only just starting to stand out. When such a player appears, a large company has several options. It can try to compete with it, limit its growth opportunities, work with it or decide to acquire it. What matters most, however, is spotting it early enough.
What does Kodak teach us about competitor monitoring?
Kodak shows that information about a new technology does not provide an advantage on its own: the company still has to decide whether its current business model will work in the new conditions.
Kodak is one of the most frequently cited examples of a company that struggled to respond to change. Its story matters not because it lacked knowledge about the development of digital photography. The problem was much more complex. The new technology struck at a business model that had generated very high revenue for the company for years. This shows an important difference between noticing a change and drawing the right conclusions from it. Monitoring can indicate that a new technology, a substitute or a different way of meeting customer needs is emerging. The information alone, however, does not provide an advantage. The company still has to decide whether its current business model will continue to work in the new conditions. Sometimes, then, the biggest obstacle is not a lack of information but a reluctance to question your own success.
When is cooperating with a competitor better than fighting it?
When a smaller player has technology, a product or capabilities that a larger company lacks, the answer may be a partnership, an investment or bringing it into the company.
The appearance of an innovative competitor does not always have to lead to open warfare. If a smaller player has technology, a product or capabilities that a larger company lacks, one solution may be a partnership, an investment or bringing it into the company. This strategy is particularly important when a new product could become a substitute for the existing solution. The big player then faces a fundamental question: should it try to stop the change on its own, or use it to its own advantage? Competitor monitoring gives you time to make this decision before the innovation becomes so strong that your options for responding are much more limited.
When is acquiring a competitor better than building capabilities in-house?
Disney and Pixar show that an acquisition can give access to technology, people, a brand, customers or an organisational culture that would take many years to build from scratch.
A good example of an acquisition of strategic importance is the story of Disney and Pixar Animation Studios. Pixar was developing computer animation and building capabilities that increasingly influenced the direction of the whole industry. Instead of trying to recreate all these capabilities solely within its own organisation, Disney ultimately decided to acquire the company. From the perspective of competitor monitoring, this example shows more than the value of the transaction itself. Observing the market makes it possible to notice that another company is doing something important better, faster or in a way that suits audiences more. In that case, direct rivalry is not always the right decision. Sometimes combining resources delivers greater value. An acquisition can mean access to technology, people, a brand, customers, ways of working or an organisational culture that would take many years to build from scratch.
How did Dollar Shave Club win an edge in the razor market?
Dollar Shave Club focused on convenience and regular delivery in a subscription model, generated around USD 200 m in revenue in 2016 and was acquired by Unilever for around USD 1 bn.
One of the more interesting examples showing the importance of observing customers is the growth of Dollar Shave Club. For years the razor market focused mainly on successive product improvements, and large manufacturers competed on quality, brand and technology. Dollar Shave Club looked at customer needs differently. Instead of offering yet another generation of blades, it focused on convenience and regular delivery in a subscription model. So the company spotted not so much a product gap as a gap in the purchasing experience. In 2016 it generated around USD 200 m in revenue and was then acquired by Unilever for an amount estimated at around USD 1 bn. This example shows that a competitive advantage can be built not only through a better product, but also by changing the way the customer buys it.
What should competitor monitoring cover besides the product?
Competitor monitoring should also cover the way products are sold, subscription models, distribution channels, the language of communication, the customer experience and how a community is built around the brand.
The Dollar Shave Club story shows one more important thing. A competitor does not have to win because it has created a technologically better product. It can win customers through simpler purchasing, better communication, more convenient delivery, a different payment method or a stronger sense of belonging to the brand. That is why competitor monitoring should cover much more than the product offer. You should watch:
Sometimes that is exactly where an innovation starts that, over time, changes the whole category.
Why does acquiring a competitor not always bring its advantage?
Customers buy not just a product but also a style of communication, a sense of community, humour or the brand image, and these can weaken after a large corporation takes over.
The Dollar Shave Club story also has another side. After a large corporation acquired the company, it faced the challenge of preserving the brand's character. What worked well in a smaller, dynamic organisation cannot always be transferred directly to a large one. Customers do not buy just a product. They often also buy a style of communication, a sense of community, humour or the brand image. If these elements are weakened after the acquisition, the new owner may formally own the company while gradually losing some of what previously made it attractive. Monitoring should therefore cover not only a competitor's results but also the sources of its advantage. If a company does not understand why customers choose a given brand, acquiring the product or technology alone may not be enough.
What do Netflix and Blockbuster teach us about competitor monitoring?
A company can spend years analysing players operating by the same rules and miss that the biggest threat is emerging outside the existing model, as Netflix's subscription model was.
Another classic example is the rivalry between Netflix and the Blockbuster rental chain. The popular story of how Netflix was founded focuses on the problems associated with traditional film rental. From a business point of view, however, the change in the way content was consumed was more important. The subscription model met different customer expectations than a classic rental shop. This is where one of the most important lessons for competitor monitoring lies. A company can spend years analysing other players operating by the same rules and fail to notice that the biggest threat is emerging outside the existing model. Blockbuster had a recognisable brand, an extensive network of outlets and operated on a huge scale. All these strengths, however, were tied to a particular way of watching films. When the consumption model changed, some of its existing advantages began to lose their significance.
Why can a large company miss a change in the market?
A strong market position can, paradoxically, make a threat harder to see: a large company keeps developing its proven model, while a smaller competitor can experiment and attack a seemingly small segment.
The stories of Kodak, Blockbuster and Gillette lead to a similar conclusion. A strong market position can, paradoxically, make it harder to see a threat. A large company has customers, revenue, a brand and a proven business model. The natural reflex is therefore to keep developing what has worked so far. A smaller competitor, by contrast, carries no such burden. It can experiment, try new models and attack a segment of the market that initially seems too small for the leader to pay attention to. The problem starts when that segment stops being small. That is why one of the tasks of monitoring is to pick up signals that do not yet have much impact on financial results but may indicate the future direction of the market.
How can competitor monitoring be a source of inspiration?
A competitor may reveal a new way of communicating with customers, a distribution model, a technology, a direction for product development or a market segment the company had not considered.
Watching other companies is associated above all with identifying threats. Yet an equally important function of monitoring is inspiration. A competitor may reveal a new way of communicating with customers, a distribution model, a technology, a direction for product development or a market segment the company had not previously considered. This does not mean copying other people's solutions. It is about spotting signals. If several companies start developing a similar solution, this may indicate a change in customer expectations. If a small competitor is growing very quickly, check what its advantage is based on. If the leader acquires a company from a seemingly distant category, consider what strategic goal may lie behind it. In this way, competitors' actions become one of the sources of knowledge about the future of your own market.
Why is watching only your own company dangerous?
A company that watches only its own sales, customers and products may long fail to notice a solution developing nearby that will completely change how the market works in a few years.
A company that watches only its own sales, customers and products may for a long time fail to notice changes taking place outside its organisation. Results may still be good, existing customers may remain loyal and the current business model may still generate high revenue. At the same time, somewhere nearby, a solution may be developing that will completely change how the market works in a few years. This is exactly the scenario competitor monitoring should protect against. It does not guarantee that the company will always make the right decision. It does, however, help it see alternatives, new threats and directions of development earlier.
What questions does competitor monitoring help you ask?
Monitoring helps a company assess early enough whether to develop similar capabilities, start a partnership, consider an acquisition or concentrate its resources in a different direction, leaving time to respond.
The greatest value of monitoring does not lie in providing ready answers to every business problem. Rather, it helps you ask the right questions early enough for the company to have time to respond. Instead of focusing on a single signal, look at the market more broadly. A small competitor may start growing faster than the whole category, a new sales model may change customer expectations, and an emerging technology may become a substitute for the existing product. In such a situation the company should assess whether to develop similar capabilities, start a partnership, consider an acquisition or concentrate its resources in a different direction. The stories of well-known companies show that the difference between success and loss of position often begins at the very moment someone sees a change before everyone else.
Competitor monitoring lets you step outside your own perspective. It shows what is happening in the market, where a threat may come from and where an opportunity is emerging, before it becomes obvious to everyone.
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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