How To Identify And Analyze Indirect Competitors In Business

Imagine this: You’re hanging out with your family, trying to decide between streaming a new movie at home or heading out for pizza. While a restaurant and a streaming service might not seem like rivals, they’re both vying for the same thing: your family’s disposable income and leisure time.

Every business has competition—but it’s not always just the first few names that come to mind.

This is the essence of indirect competition. But what are indirect competitors, exactly? They are businesses offering different products or services but competing for similar customer needs, goals, or resources.

Ready to see how indirect competitors could influence your next big strategy? Let’s dig in. 📝

How to Identify and Analyze Indirect Competitors in Business

⏰ 60-Second Summary

Here are the steps to identify indirect competitors:

Understand your market: Expand your vision. Look beyond direct competition and explore similar and adjacent industries. Your indirect competitors may emerge from there

Spot trends: Keep an eye on market shifts and emerging opportunities

Track customer needs: Pay attention to how your customers’ preferences are changing

Analyze competitor data: Use insights to visualize trends and identify gaps

Stay adaptable: Be ready to tweak your marketing strategies as new competitors emerge

Collaborate and plan: Work with your team to brainstorm ways to outsmart direct and indirect competition

Employ research tools: Use ’s rich features like Whiteboards, Docs, and Dashboards to identify, research, and build strategies against indirect competitors

What Are Indirect Competitors?

Indirect competitors are businesses that don’t offer the same product or service as yours but still target a similar audience or fulfill a comparable need.

For instance, coffee shops might indirectly compete with coworking spaces since both provide environments for work and socializing.

Recognizing indirect competitors helps businesses gain a deeper understanding of the broader market. It reveals where your potential customers might allocate their resources and offers insight into how to position your offerings more effectively.

Indirect competitors share these defining traits:

Serve different industries or markets

Fulfill similar customer needs or desires

Target the same audience but with distinct products or services

Compete for shared resources like time, money, or attention

🔍 Did You Know? In markets with too many similar products, over-choice can overwhelm customers. According to research from Columbia Business School, when consumers are faced with too many options, they are less likely to decide on anything.

Direct vs. Indirect Competitors: A Comparison

Understanding the differences between direct and indirect competitors is essential for crafting effective strategies. Here’s a quick comparison:

Aspect	Direct competitors	Indirect competitors
Definition	Offer the same or similar products/services	Provide different products/services but target the same audience
Industry overlap	Function within the same industry	Operate in different industries
Customer needs	Address identical or closely related needs	Fulfill similar needs in different ways
Examples	Two clothing brands competing for style-conscious shoppers	A clothing brand and an electronics store competing for disposable income

How to Identify Indirect Competitors

Competition in business often comes from unexpected places. The challenge lies in uncovering these hidden players and understanding how they intersect with your audience’s choices. Without a clear process, it’s easy to miss important insights.

, the everything app for work, helps you approach this task with clarity and efficiency. From organizing research to visualizing connections, offers the tools to tackle each step effectively.

Let’s break it down. 👇

Step #1: Define your audience’s needs and preferences

The first step in identifying indirect competitors is understanding your audience deeply. What do they value? What problems are they trying to solve? Think about their goals, pain points, and habits.

For example, a boutique fitness studio might attract individuals who value health, convenience, and community.

When you examine these details, you might realize that competitors include other fitness studios, wellness apps, meditation platforms, or even local cafés offering a social experience. The goal is to map out the broader ecosystem your audience engages with.

Docs

Docs acts as your digital notebook, allowing you to organize all your audience insights in one place. Create detailed audience personas, outline their preferences, and list any patterns you observe.

The collaborative features let your team contribute to these profiles in real time, ensuring everyone’s insights are captured. If you’re analyzing fitness enthusiasts, create a Doc to list their preferences, such as workout types, preferred times, and spending habits.

Tag team members with @mentions to add insights or highlight emerging trends.

💡 Pro Tip: Use Porter’s Five Forces to analyze competitive dynamics in your industry. This framework helps you assess factors such as the threat of new entrants, the bargaining power of suppliers and buyers, the threat of substitutes, and industry rivalry to shape your business strategy.

Step #2: Research your industry and market trends

Once you understand your audience, explore your industry and current market trends. Identify businesses that influence your audience’s decisions, even if they belong to different industries. This step helps you recognize patterns and align your strategy with evolving consumer behavior.

For example, if you’re a meal delivery service, you might notice indirect competition from grocery delivery apps, restaurants with takeout options, or even food blogs offering DIY meal prep ideas.

Whiteboards

Whiteboards make brainstorming and visualizing data effortless.

Use them to map the market landscape, connect trends to audience behavior, and illustrate how competitors overlap. Whiteboards offer drag-and-drop functionality, allowing you to create a dynamic and editable visualization of your research.

For example, you may create a Whiteboard to create a flowchart showing how consumer preferences shift between meal delivery, grocery services, and home-cooked meals. Add sticky notes for trends, arrows to show connections, and tags to categorize indirect and direct competition.

Further, the Market Analysis Template can help structure your research. It offers pre-built sections to record audience demographics, goals, and behaviors, saving time and ensuring consistency.

Step #3: Identify potential competitors

Now that you’ve gathered audience insights and market data, list potential indirect competitors. Think beyond obvious choices to include businesses that fulfill similar needs in different ways.

For example, a coworking space might compete indirectly with libraries, virtual meeting platforms, or conference arenas depending on what the audience values most—cost, ambiance, or networking opportunities.

Dashboards

Dashboards help you track, compare, and analyze competitors efficiently. You can customize cards to organize data, monitor key metrics, and visualize real-time trends.

For instance, you may set up a Dashboard to track data such as customer reviews, pricing structures, or promotional campaigns for your potential competitors. This will help you quickly spot patterns and gaps.

🧠 Fun Fact: While Airbnb and hotels both offer accommodations, Airbnb is often seen as an alternative to traditional hotels, focusing more on unique, personalized, and often affordable stays. This indirect competition has caused hotel chains to rethink their strategies, with some adopting new ‘boutique hotel’ concepts to attract more diverse travelers.

Competitive Analysis Template

The Competitive Analysis Template allows you to organize and compare data from multiple competitors systematically. It also allows you to analyze competitors’ strengths, weaknesses, opportunities, and threats, helping with a SWOT analysis.

It stands out because you can visualize data with charts and graphs, making it easy to spot trends.

Competitive analysis templates like these don’t just collect data; they help you turn the data into actionable insights. Based on your findings, you can create strategic plans that leverage your strengths and address areas for improvement.

Step #4: Brainstorm competitive strategies

Once you have a solid understanding of your audience and potential competitors, start brainstorming strategies to position your business effectively. Focus on what makes your offering unique and how you can appeal to your audience’s priorities.

To get a kick-start, use the Points of Difference (POD) framework to understand what makes your brand unique and gives it a competitive advantage.

Brain

Brain enhances brainstorming sessions with AI-powered suggestions. As you document strategies, the tool provides real-time input to refine ideas, improve language, and identify potential opportunities.

It helps simplify complex information, making your plans actionable and clear.

Let’s say you’re using this AI competitor analysis tool to outline strategies for a coworking space. While you write, the AI might suggest ways to emphasize networking opportunities or highlight cost-effective membership plans.

💡 Pro Tip: Craft a go-to-market strategy to introduce and promote a product while staying ahead of indirect and direct competition. It involves understanding your target audience, defining your unique value, selecting the proper sales channels, and creating marketing campaigns that differentiate you in the market.

Step #5: Automate competitor tracking

Competitor analysis isn’t a one-time task. It requires constant monitoring to keep up with market changes.

Set triggers to automate repetitive tasks and stay updated with Automations

Automation saves considerable time here.

You can automate notifications for competitor updates, such as changes in pricing or new campaigns. It’s also simple to set triggers to assign tasks, update workflows, or notify your team of critical insights.

For instance, you can create an automation that flags updates in a competitor’s promotional activity and assigns a task to your marketing team to analyze its impact.

🧠 Fun Fact: Many competitor analysis efforts follow the 80/20 rule (Pareto Principle), in which businesses focus on the 20% of competitors who make up 80% of the market activity.

Strategies to Address Indirect Competition

Dealing with indirect competition requires more than just keeping an eye on direct rivals. You must adapt proactively to shifting market dynamics, understand customer behavior, and differentiate your offering.

Here are four strategies that can help you stay ahead. ✅

1. Understand your unique selling proposition (USP)

Your USP is what sets you apart from the competition. It’s essential to highlight what makes your product or service unique, especially when facing indirect competition.

Whether it’s quality, convenience, or customer service, your audience should know why your offering is the best choice. Regularly revisit your USP to ensure it remains relevant and strong in a changing market.

🧠 Fun Fact: The rise of streaming platforms like Netflix, Hulu, and Disney+ has indirectly affected cable TV providers. Even though these platforms don’t directly compete with cable (as cable provides live programming), they have significantly eroded the traditional TV model by offering on-demand, flexible entertainment.

2. Adapt to changing customer needs

Indirect competitors often emerge as customer preferences evolve. For example, a rise in interest in sustainability may create indirect competition for a business that didn’t previously consider eco-consciousness when developing its offerings.

Continuously monitor customer feedback and research market trends to identify when shifts are happening. Stay flexible and ready to pivot your strategies to meet these needs.

3. Expand partnerships and collaborations

Collaborating with other businesses can help you strengthen your position against indirect competition. Partnerships can provide mutual benefits, such as increased reach, enhanced credibility, and shared resources.

Look for opportunities to team up with companies that complement your offering or share your target audience.

🔍 Did You Know? Price wars between competing companies can be fierce. A well-known example is the airline industry, where companies often drop their prices drastically to attract customers when a new competitor enters the market. Some companies even offer ‘loss leaders,’ products sold at a loss to draw customers in.

4. Improve customer experience

When faced with indirect competition, the customer experience becomes even more important.

Enhance every touchpoint of your customer journey, from ease of use to personalized service. Investing in a seamless, positive experience can turn your customers into loyal advocates, making it harder for indirect competitors to lure them away.

🧠 Fun Fact: Companies like Blue Apron and HelloFresh provide meal kit services that indirectly compete with fast food chains. While fast food is quick and convenient, meal kits offer a slightly healthier alternative with more customization, forcing fast food to rethink their product offerings.

⚡️ Template Archive: Check out our industry analysis templates to dive deep into your market and uncover indirect and direct competition.

Why Businesses Should Monitor Indirect Competitors

Monitoring indirect competitors is crucial for staying ahead in the market.

Here’s why:

Trendspotting: Keeping an eye on indirect competition helps you spot emerging market shifts before they become mainstream. Identifying new business opportunities early lets you capitalize on trends and stay relevant

Long-term strategy: Regularly tracking indirect competitors allows you to anticipate changes in customer behavior and needs. These shifts help adjust your long-term strategy and protect your market position against potential threats

Adaptability: Indirect competition may not always appear as a direct threat, but it can shift the market in unexpected ways. Being aware of these shifts prepares you to pivot your strategies quickly

Level Up Your Competitor Research With

Keeping track of indirect competitors is a smart move for staying ahead. It lets you spot trends, adjust to customer shifts, and fine-tune your strategy before change hits. Regularly checking in on these competitors keeps you proactive and ready for anything.

makes it simple to organize and track competitor insights. Use Docs to gather everything in one place, Dashboards to visualize data, and Automations to save time.

Everything you need to stay ahead, with , the everything app for work.

Everything you need to stay organized and get work done.