Competitive Strategy: When to React to Rivals vs. Stay the Course

by Anne T Griffin, Fractional Product Manager

Your startup shouldn't be reactive to every move your competitors make, but you should understand how it fits into their strategy. In a landscape that is changing more rapidly every day, roadmaps are changing faster than ever. This can be related to changes in the market, funding, AI, or something else entirely. Regardless of what changes in the roadmap, it should always reflect your strategy.

While your strategy shouldn't shift every time a competitor changes theirs, you should follow your competitors to watch for shifts in their strategy and what they are choosing to focus on.

Ignoring your competitors is dangerous because you will miss important shifts in their strategy.

Making changes in reaction to every time they make a change means you aren't differentiated.

A Framework for Competitive Strategy

1. Identify who your competitors and alternatives are. The companies in direct competition with you are your competitors. Alternatives are companies that aren't directly competing with you, but are substitutes for your product. For example, if you're building a specialized project management tool for product teams, your alternatives might include general tools like Notion or even spreadsheets that teams might use instead of adopting your solution.
   

2. Understand What Their Strategy Is. If it's a new market, they may not even have a strategy. It's important to know what it is. Look at their product positioning, target customers, pricing, and how they talk about themselves. This helps you identify their true north star and differentiate accordingly.
   

3. Monitor Changes with Competitors. Set up alerts when your competitors are in the news, or you can set up an AI agent that regularly checks for news of your competitors and synthesizes if it may signal a change in their strategy. If you go the AI agent route, ensure it doesn't hallucinate.
   

4. Distinguish Signal From Noise. Not every product update or feature launch represents a strategic shift. Develop criteria for what constitutes meaningful competitive intelligence versus tactical moves that don't require your response.
   

5. Make Deliberate Strategic Choices. When you detect a meaningful shift in the competitive landscape, respond thoughtfully rather than reactively. Ask yourself: Does this change invalidate our core assumptions? Does it open new opportunities? Does it require us to accelerate certain roadmap items?

Remember that your primary goal is to solve real, painful problems for your customers. The most successful startups aren't just reacting to competitors, they're creating new value. Competitive analysis should inform your strategy, not dictate it.