Tips for Anticipating Switches in Competitors’ Strategies

Marketing Viewpoint by Ruth Winett

Tips for Anticipating Switches in
Competitors’ Strategies

A Stealth Approach to Competitor Intelligence

As OpenAI has discovered, a company's competitive advantage doesn't last forever. Most companies monitor their competitors. However, looking for early warning signs of changes is more effective than monitoring competitors. With monitoring you learn about the competition after the fact. With "foresight," or "early warning," you can anticipate competitors' new initiatives and respond effectively, according to Leonard Fuld, competitor intelligence expert.

The Wal-Mart Early Warning Example

A leading European grocer had seen warning signs that Wal-Mart intended to go into the grocery business. I was asked to investigate and found that Wal-Mart was organizing to sell groceries. Importantly, they were also heavily investing in computer systems. Wal-Mart soon required suppliers to apply barcodes to their goods. These were warnings that Wal-Mart intended to use IT and inventory management to become the preeminent low cost providers of groceries in addition to other goods.

Look for Early Warning Signs from Suppliers and Customers

Sam Walton of Wal-Mart and Michael Dell of Dell computers locked in suppliers and learned from them, according to Fuld. They also learned from their own customers rather than merely focusing on obvious competitors.

From your suppliers and your competitors' suppliers you can find out about surpluses, shortages, and evolving trends:

Shortages of parts and goods can mean that competitors are selling more and/or that they are introducing new products or entering new markets. "Artificial Intelligent companies are writing huge checks for chips, memory, specialized glass fiber..., and they have begun to outduel Apple in the race to secure components," which is eating into Apple's profit margins, according to The Wall Street Journal.

The end of tax credits for purchasers of electric vehicles, plus unsold EVs were early signs that vehicle manufacturers, such as Ford, Audi, and Honda would reduce or end production of EVs.

Shortages and surpluses can signify changes in customer trends that will eventually affect your business.

Track Your Own Customers

Track your customers, observing signs of product, technology, or marketing initiatives that can affect their need for your offerings.

Ask your customers about stealth competitors-- businesses in related industries or startups with breakthroughs that will appeal to your customers.

In addition, monitor competitors in your industry in the press, annual reports, and at industry conferences, looking for early warning signs. Watch for news of technical breakthroughs or the formation of new partnerships and alliances. Observe patterns in one representative company in your industry, as other companies in the same industry may react similarly. Build a "mental database" based on industry insights. This is a lesson that Fuld learned from Warren Buffet.

As competitive advantage doesn’t last forever, companies should look for warning signs that their advantage has eroded. Importantly, they should analyze the intelligence quickly and act without taking unreasonable risks, concludes Fuld.

Sources:

Leonard M. Fuld, The Secret Language of Competitive Intelligence, Crown Business, 2006.

"AI Boom Set To Erode Apples' Profit Margins," R. Winkler and Yang Jie, The Wall Street Journal, January 2, 2026.

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