identifying competitors

The first step in analyzing your competitors is identifying who or what they are. Begin, as always, with the obvious: A simple list of known competitors operating in your sector.

Broaden this list by looking online. Who will you be competing with on the web? All your known off-line competitors may come online, but there may be new competitors as well. If you're a local business, you may face competition from national outfitters.

Now broaden your mind. Think about the user need you're addressing. What other sources will people turn to when confronting this need? Books? Magazines? Informational web sites? Trusted friends? (understanding user needs, p. 60)

You can, of course, put the web itself to use in identifying competitors. Begin by browsing the online directories, like Yahoo. Their hierarchical categories will let you see, at a glance, the other sites in your category. Pay special attention to any competitors who advertise in these areas or whose functionality is highlighted within the portal. These are probably your most significant competitors, or at least the ones hustling the hardest.

Search engines offer another convenient tool: Simply search on those keywords relevant to your site. Both the ads and the listings will point you toward potential partners and competitors.

Also, make sure you pay attention to what the big guys (Amazon, Microsoft, etc.) are doing. A competition with these 900-pound gorillas could be deadly, but a partnership could be a tremendous boost.

where competitors come from

Online competition often emerges from unexpected sources, because the web allows sites to expand vertically or horizontally with relative ease.

2 ways for competition to emerge:

• Vertical competition comes from sites that offer multiple services related to one topic.

• Horizontal competition comes from sites that offer a single service related to multiple topics or product categories.

Many sites start small, then expand either horizontally or vertically over time. Amazon, for example, started out as a bookstore and expanded horizontally, adding other product categories (CDs, software, toys, etc.). Babycenter, on the other hand, is a classic vertical site; it started out as an information resource for new and expecting parents, and added both community features and a store over time.

where to look for competitors

Not sure who your competitors are? Here's where to look:

• On Yahoo! Look at the sites listed in your category on Yahoo! or other directories.

• On a search engine. Do a search for keywords related to your site. Look at both the ads and the listed sites.

• On the newsstand. Look for magazines, books, and TV shows related to your site.

• Look at ads on your competitors' sites (or your own!) and in relevant publications.

• Find the latest industry ratings from Nielsen NetRatings or Media Metrix (how the rating systems work, p. 246).

• If you can afford it, research services like Nielsen offer hoards of helpful information, such as which sites your customers visit after leaving yours or which sites have a user base that overlaps with yours.

Required reading

Are you a large company threatened by upstarts?

"Identify your competitors before they destroy you."

Harvard Business Review (November 2000).

action section: who is your competition?

On the web, your competition may not be immediately obvious. It may come from companies in other industries or even other countries. But remember: There's always competition, even if it's only for your customer's time.

identifying competitors

Who are your known competitors?

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What sites might become competitors?

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The competition will be:

vertical

horizontal

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The competition will be:

vertical

horizontal

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The competition will be:

vertical

horizontal

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The competition will be:

vertical

horizontal

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The competition will be:

vertical

horizontal

Do any related sites have partnerships with portals?

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According to Nielsen NetRatings, what are the top-ranked sites in your category?

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When you search for the keywords that are most important to your site, which sites appear on the first page of the listings?

On Alltheweb:

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On AOL search:

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On Google:

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On HotBot:

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On Lycos:

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On MSN search:

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On Overture:

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On Yahoo!:

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