Competitive Monitoring Strategies: What to Do When You’re Not First

In the business world, there’s a constant obsession with being first. The first company to launch a product, the first to enter a market, the first to adopt a new technology. This “first-mover advantage” mentality has dominated business strategies for decades, forging the belief that whoever gets there first holds all the advantages.

However, the reality is much more complex. Not being first doesn’t automatically mean losing the competitive battle. Google wasn’t the first search engine, Facebook wasn’t the first social network, and Apple didn’t invent the smartphone. All these companies arrived after their competitors, but they managed to dominate their markets using smart competitive monitoring strategies.

As far back as 1993, a study by researchers Peter N. Golder and Gerard J. Tellis revealed that companies that adopt an early follower strategy often have a higher probability of success than pioneers. Analysing 500 brands across 50 product categories, they found that 47% of the companies that introduced a product first failed, whereas only 8% of those that entered the market shortly after suffered the same fate.

Despite this, in industries like technology, the promise of disruptive innovation continues to be a powerful magnet for investors. This keeps the strategic dilemma alive: Is it better to pave the way or to perfect the path that others have already laid out?

This article explores how to act strategically when you’re not the market leader. You will learn that being a follower can become a real competitive advantage if you know how to leverage your position.

What is a competitive monitoring strategy and why is it crucial?

A competitive monitoring strategy refers to the business strategy where a company observes, analyses and responds to the actions of market leaders. A “market follower” is a company that consciously acknowledges it is not the leader in its industry, but seeks to maintain or improve its competitive position through specific strategies.

There are different types of market followers, each with distinct characteristics and strategies:

• The adapter takes the leader’s innovations and adjusts them for different market segments or geographical areas. Its strength lies in the ability to customise proven solutions for new contexts.
• The imitator directly reproduces the leader’s successful strategies, but aims to do so more efficiently or economically.
• The specialised niche follower identifies specific market segments where it can dominate, even if the overall leader is larger. This allows it to create unique value propositions and develop deeper relationships with specific customers.
• The eventual challenger uses its follower position as a springboard to eventually challenge for market leadership. These followers accumulate resources, learn from the leader, and wait for the right moment to launch a direct competitive attack.

In addition, there is also the concept of the “fast follower“, which describes companies that let others innovate first, but then quickly adopt and improve upon those innovations to gain a competitive advantage. This approach requires agility, analytical ability, and speed of implementation.

The Follower’s Advantage: It’s Not Always a Bad Thing to Be Second

Contrary to popular belief, being second in a market can offer significant advantages that leaders do not possess. Understanding these advantages is fundamental to developing successful competitive monitoring strategies.

The first major advantage is the opportunity to learn from the leader’s mistakes. Market pioneers take on all the risks of experimentation. They invest large sums in product development, market education and demand creation. During this process, they inevitably make costly mistakes. Followers can observe these mistakes from a privileged position, learning what works and what doesn’t without shouldering the associated costs. Essentially, the market leader becomes their free testing laboratory.

Followers also enjoy greater agility and innovation. Leading companies, especially large corporations, often develop complex bureaucratic structures that slow down decision-making. Followers can be more flexible and experimental. They can test new ideas quickly, pivot when something isn’t working, and adapt their strategies in real time.

The ability to focus on specific niches is another significant advantage. Market leaders often have to maintain a broad value proposition to satisfy as many customers as possible. Followers can identify specific market segments where they can create exceptional value and develop a deep understanding of particular needs.

Finally, followers have greater freedom to create unique and differentiated value propositions. They are not limited by past product decisions or the need to maintain consistency with an established brand. They can completely reimagine how value is delivered in their industry.

5 Key Competitive Monitoring Strategies

1. Smart Imitation Strategy

The smart imitation strategy goes far beyond simply copying what the leader does. It’s about observing, analysing and improving upon the market’s successful innovations. This strategy requires a robust competitive intelligence system and rapid execution capability.

The first step is to establish a continuous monitoring system for the leader’s actions, including product launches, price changes, new marketing campaigns and strategic moves. The key is to identify which innovations are gaining real traction in the market versus which are simply experiments.

Once a successful innovation is identified, the fast follower must analyse it in depth to understand the underlying principles that make it work. It’s not about superficial copying, but about understanding the logic of the value it provides to customers. Speed of implementation is crucial in this strategy.

2. Differentiation and Niche Strategy

This strategy recognises that it is not necessary to compete directly with the leader on their main turf. Instead, it identifies specific market segments where it can create superior value and establish a dominant position.

Effective differentiation begins with a deep analysis of unmet needs in the market. While the leader focuses on satisfying the needs of the mass market, there are always segments with specific needs that are not being adequately met.

The follower must develop distinctive capabilities that allow it to better serve these specific segments. This might include specialised technical expertise, unique service models, or a deep understanding of the needs of particular customer groups.

3. Flanking Attack Strategy

A flanking attack involves competing indirectly with the leader by addressing the same fundamental customer problem but from a completely different angle. This strategy can be particularly effective when the leader is focused on defending its position in its main market.

For example, while the leader competes on technical features, the follower can compete on ease of use. While the leader focuses on functionality, the follower can focus on customer experience. This redefinition of the battlefield allows the follower to avoid direct competition while capturing significant value.

4. ‘Guerrilla Marketing’ Strategy

Guerrilla marketing tactics are especially effective for followers with limited resources who need to generate maximum impact with minimal investment. This strategy focuses on creativity, timing and precision rather than the volume of investment.

Guerrilla marketing requires a deep understanding of customer behaviour and the identification of key moments where a small but well-executed intervention can generate a large impact.

The element of surprise is fundamental to this strategy. The follower must be able to act in a way that captures attention and generates conversation without giving the leader time to respond effectively. This requires agility in planning and execution, as well as a willingness to take calculated risks.

5. Disruptive Innovation Strategy

Disruptive innovation represents the most ambitious strategy for a follower, as it seeks to fundamentally change the rules of the game in the industry. This strategy is not about incrementally improving what already exists, but about creating new ways of delivering value that make traditional approaches obsolete.

Disruption typically starts in the less attractive segments of the market, where existing solutions are overly complex or expensive for customers’ real needs. Over time, the disruptive solution improves and begins to compete effectively in the more attractive market segments.

Common Mistakes When Following a Leader

Copying Without Understanding the Value

One of the most frequent mistakes is superficial copying without a deep understanding of the value being created. Many companies see a leader’s successful innovation and rush to replicate it exactly, without understanding why it works or the underlying principles that make it successful.

This blind copying leads to poor implementations that fail to capture the real value of the original innovation. Customers may perceive these offerings as cheap imitations, damaging the follower company’s reputation.

Lack of a Clear Identity

Focusing exclusively on following the leader can result in the loss of one’s own corporate identity. Companies that fall into this trap become “me-too players” that never develop distinctive value propositions or unique capabilities.

This lack of a clear identity makes the company vulnerable to any change in the leader’s strategy. Developing a unique identity while following a leader requires a careful balance between using observation of the leader as input for your strategy, but not as the entire strategy.

Underestimating the Time to Market

Many followers significantly underestimate the time and resources needed to enter a market effectively. They see the leader’s success and assume they can replicate it quickly, without considering all the investment, learning and capability-building that were necessary for that success.

This underestimation leads to inadequate planning, insufficient resources and unrealistic expectations. When reality doesn’t match expectations, many companies prematurely abandon their follower efforts, missing out on valuable opportunities.

Failing to Innovate or Listen to the Customer

The final, and perhaps most critical, mistake is to become a passive follower that never innovates or develops an independent understanding of customer needs. These companies become completely dependent on the leader’s innovation, losing the ability to create their own value.

A lack of its own innovation means the follower is always reactive, never proactive. It can never surprise the market or create a sustainable competitive advantage. Furthermore, by not developing direct relationships with customers, it misses the opportunity to identify unmet needs that could become opportunities for differentiation.

Success Stories and Lessons Learnt

Samsung is one of the most impressive examples of a successful competitive follower. In the 90s, Samsung was considered a lower-quality electronics brand. Instead of trying to compete directly in the mass market, Samsung began by identifying specific niches where it could offer differentiated value.

When the smartphone era arrived, Samsung applied its smart follower strategy. It allowed Apple to establish the market with the iPhone, but quickly developed a response that improved on several aspects of the original product. The Galaxy line was not a simple copy of the iPhone, but an evolution that offered larger screens, more customisation options, and more accessible prices.

Google is another fascinating case. When it launched its search engine, the market was already dominated by Yahoo, AltaVista and Lycos. However, Google identified a fundamental opportunity: the existing engines weren’t good enough at finding relevant information. Instead of competing on the same dimensions as the leaders, Google completely redefined what it meant to be a search engine.

These cases demonstrate common principles in successful following: the importance of strategic patience to develop capabilities, the importance of differentiation over simple copying, and the importance of the right timing to make moves when the market is ready.

Conclusion

Competitive monitoring strategies represent a real and proven opportunity for companies that are not leaders in their markets. The key is to understand that being a follower does not mean being passive or inferior, but rather being strategic, smart and patient in building a competitive advantage.

Successful followers combine careful observation with their own innovation. They learn from leaders but do not imitate them blindly. They develop distinctive capabilities that allow them to create unique value for specific customer segments, maintaining an agility that makes it easier to respond quickly to emerging opportunities.

Choosing an specific strategy will depend on factors such as available resources, existing capabilities and long-term objectives. The important thing is to recognise that a competitive follower strategy, when executed correctly, can be as effective as market leadership.

The future will not necessarily belong to those who arrive first, but to those who execute best. Competitive follower strategies provide a proven path to that success.