Stop Watching Your Competitors—Start Understanding Their Next Move

Stop Watching Your Competitors—Start Understanding Their Next Move: Weekly Winning Strategies
Most don’t fail because they’re bad at competing. They fail because they don’t understand what “competition” really is. Some imagine “competitor analysis” as detailed spreadsheets. They track product launches, ad campaigns, and price changes. These tactical moves are easy to spot. Or they think of competitor pricing. They’re also easy to misunderstand. So stop watching your competitors.

Think of it like this: when you focus on your competitor’s last move, you’re reacting to a snapshot of the past.

Their strategy—the forces behind their next three moves—is invisible to you.

You don’t win by reacting. You win by understanding what’s coming next. Market leaders aren’t fixated on what their competitors have just done. They focus on why those moves were made and what they signal about the market’s direction.

Competitor analysis isn’t about copying tactics. It’s about understanding the motives behind your competitors’ strategies. Use that insight to position your business for long-term success.

Common Mistakes in Competitor Analysis
To improve your competitor analysis, first, recognise the simple truth. Most businesses do it wrong. Here’s the harsh reality: most people spend their time and energy on surface-level data.

A sole focus on the Visible
Most companies track external moves. A product launch, a marketing campaign, or a new pricing model. These are the obvious things that happen after key decisions are made. The problem? You’re too late. These moves are the outcome of weeks or months of planning. If you’re only reacting now, you’ve already lost.

Over-Reliance on Tools
“We need to do competitive intelligence, buy access to some platform and look to see what insights we get from it.”

Here’s a hard truth that many don’t want to hear: your tools aren’t enough. And AI isn’t enough, either. Often, the response to “we need to do competitor analysis” is to buy access to some software platform, load it with data, and wait for insights to appear. That might sound efficient, but it’s fundamentally flawed.

If your competitive intelligence comes primarily from monitoring tools or AI-generated dashboards, then all you’re doing is looking at what’s already happened. You’re not digging into why it happened, nor are you thinking about what’s likely to happen next. No competitive intelligence platform is going to tell you that.

Tools are just that—tools. They don’t give you answers on a plate. To gain true insights, you have to use them as starting points, not solutions. You must analyse, think critically, ask tough questions, and connect the dots yourself. Otherwise, you’re just collecting data with no real strategy for turning it into actionable intelligence.

Copying Instead of Understanding
Another misstep is mimicking competitors. They drop prices, so you drop prices. They add a new feature, so you scramble to do the same. But copying doesn’t build competitive advantage—it erodes it. Why? Because you’re always playing someone else’s game. Instead of leading, you’re following.

Ignoring Market Drivers

Competitors don’t live in a vacuum. External forces influence them. That’s changing customer preferences, supply chain disruptions, emerging technologies, and economic shifts. If you’re not studying these dynamics, you’re missing the point and the next advantage.

A Better Framework for Competitor Analysis to Stop watching your competitors
If tracking obvious moves and copying tactics doesn’t work, what does? Companies that thrive in competitive markets analyse their competitors like chess players. They don’t obsess over the last move—they study the patterns and constraints shaping the game itself.

Here’s a simple framework to use:

1. Understand Their Constraints
Every company operates within certain boundaries. They may have cash flow problems. Or they suffer from internal inefficiencies or a lack of skilled talent. Constraints that limit options. The better you understand these weaknesses, the easier it is to predict their next move.

Example: If a competitor just raised prices, ask yourself: “Why?” Did their costs go up? Are they repositioning as a premium brand? Or are they trying to boost margins before a downturn? Understanding the “why” tells you what’s likely to happen next.

2. Study Market Forces
Instead of focusing only on competitors, shift your attention to the broader market. What external factors are pressuring them? Supply chain challenges? Regulatory changes? Shifts in customer behaviour? Your competitor isn’t immune to these forces. Studying them helps you anticipate where the market—and your competitor—might be heading.

3. Analyse Their Long-Term Strategy
Companies rarely make moves in isolation. A product launch or price cut is often one piece of a larger strategy. Look for patterns: Are they doubling down on a certain customer segment? Expanding into new geographies? These patterns reveal their priorities and their long-term play.

Strategic Blind Spots to Avoid
Even when companies adopt a better framework, there are still blind spots that can derail competitor analysis. Let’s look at three key areas where businesses often fail to look deeper:

Blind Spot #1: Reframing the Market
Your competitor isn’t just trying to compete in your market. They may be trying to redefine it entirely. For example, Tesla changed what customers expect from electric vehicles. They didn’t just compete with traditional carmakers. They reframed the market by prioritising range, charging networks, and direct-to-consumer sales.

If you only look at current products, you’ll miss that competitor changing the game.

Blind Spot #2: Second-Order Effects
Most businesses stop at first-order analysis: “They launched a new feature; we need to match it.” However, competitive moves often trigger second and even third-order effects. A price cut may attract new customers but strain their margins. A new product may win headlines but cannibalise their existing revenue streams. Look for these ripple effects—they often reveal hidden vulnerabilities.

Blind Spot #3: Overlooking Weaknesses
It’s easy to get intimidated by competitors’ successes but remember: no company is invincible. Every move comes with trade-offs. A competitor might win customers with aggressive discounts, but at what cost? Sustainability? Margins? Brand equity? Spotting these weaknesses creates opportunities for you to differentiate.

Examples of Winning Analysis
When Amazon entered the grocery market with Whole Foods, competitors panicked. Industry experts wrote thousands of words about how Amazon would transform retail. More competitors panicked. Retail CEOs and related industries had to show investors an action plan to react. They brought consultants who told them they had to change. Using AI and other tech to replace human customer service in buying. Industry experts wrote even more words to look even more clever. They assumed Amazon would use its size to slash prices and dominate. A closer look at Amazon’s long-term strategy revealed something deeper. They weren’t trying to “win” groceries in the traditional sense. They were building a distribution network for their broader logistics play.

Competitors who focused only on price wars missed the bigger picture: Amazon was reframing the grocery business as part of its ecosystem. The companies that adapted thrived by emphasising in-store experiences, niche products, or hyperlocal supply chains.

The lesson? Winning isn’t about reacting to moves. It’s about understanding the strategic intent behind them.

Thinking better
Most people treat competitor analysis as a checklist: They track their moves, copy their playbook, and try to stay a step ahead. But that approach misses the point. Competitor analysis isn’t about reacting faster—it’s about thinking deeper.

What’s driving your competitor’s actions? What external forces are pressuring them? How are they trying to shape the market? These are the questions that matter.

So, Stop watching your competitors
Here’s the takeaway: Stop watching your competitors. Start understanding them.

Because in the end, those who win aren’t the ones that react. They’re the ones that anticipate.

Now, ask yourself: What’s one competitor move you’ve been reacting to lately? And what does it tell you about their constraints, priorities, and next steps?

Take the time to answer those questions. Your competitive edge depends on it.

https://www.octopusintelligence.com/stop-watching-your-competitors-start...