Operating Principle
2–4 min read
A famous argument in business strategy pointed out that railroads didn’t fail because trains got worse. They failed because they defined themselves as being in the railroad business, rather than the transportation business, and missed cars, trucks, and airplanes entirely, because none of those competitors ever showed up on a list of “other railroads.”
The same narrow framing happens constantly. A firm watches its named, category-defined competitors closely, tracking their pricing and their moves, while the actual threat is quietly solving the same customer need from an entirely different angle, one that never appears on the competitive tracking list because it doesn’t share the same category label.
Operating Question
Why It Matters
Firms that define competition by category, rather than by the underlying need being served, build a competitive tracking system with a permanent, structural blind spot. Periodically asking what customer need you’re actually serving, and who else, in any category, might serve that same need differently, surfaces threats a category-based watch list will never catch.
Supporting Evidence
Theodore Levitt, “Marketing Myopia,” Harvard Business Review
Research Notes
Broadening the definition of competition too far can also be unproductive, treating everything as a competitor and losing focus; the discipline is anchoring to the actual customer need, not maximum breadth.
This is a distinct mechanism from low-end disruption; this insight concerns how competition gets defined and tracked, not how a specific entrant climbs a market.
Practical Actions
Define your competition by customer need served, not by product category or company name.
Periodically ask what else, in any category, could solve your customer’s actual underlying problem.
Review your competitive tracking list for blind spots created by category-based framing.
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