Direct competition is a linear way to look at the business world, and compare a company with other similar companies, in the same industry. An example is comparing Netflix with other streaming services. On the opposite hand, the indirect competition looks at the core asset, and potential long-term overlaps. For instance, Netflix’s main asset is attention, and if you look at attention you might compare Netlfix with other services, beyond streaming, like perhaps TikTok.
Direct competition case study
In a direct competition scenario, you take the current customer base, define a market, and industry, and based on that look at overlaps with other, similar products.
For instance, if you’re Netflix, you compare yourself with other streaming services:
Indirect competition case study
Another way to look at the competition.
For instance, if you’re Netflix, instead of looking only at the current customers’ overlap, you might want to check where attention is moving.
Based on that you reassess the long-term competition landscape:
It doesn’t mean that you now need to compare yourself to TikTok, rather try to understand what content model and framework TikTok uses to create a loyal users base.
And according to that, revise the business strategy to come up with new ways to conceive content, just like Netflix had done itself, a decade before.
Read: Netflix Business Model
- Business Competition
- Business Models
- Business Model Innovation
- Product-Market Fit
- Digital Business Models
- Sales And Distribution Lessons
- Business Development
- Market Segmentation
- Marketing vs. Sales
- Distribution Channels