Who is your competition? The question seems so simple, but a company that defines its competitive set too narrowly can miss disruptive attackers and high-potential growth opportunities.
Take, for example, a recent article in the Wall Street Journal describing Apple's surprising entry into the video game market. A few short months ago, Apple launched the "App Store," where iPhone and Touch users can download a wide range of applications. Some applications are free, others cost a few dollars.
A recent visit to the App Store showed that seven of the top 10 applications are games. More than 2,000 games are available in the App Store. Developers are taking advantage of unique features in Apple's products--like an accelerometer that tracks motion--to develop engaging, entertaining games.
One video game manufacturer--Nintendo--is watching this development closely. One of its executives told the Journal, "Whether you chose to play on your DS [Nintendo's handheld console] or listen to music on your iPod, we're already in the same competitive space for time."
In the very next paragraph, a Sony executive displayed a different perspective, noting that Apple isn't a threat because "the consumer is using the mobile gaming on the iPhone and iPod Touch as a time waster."
Anyone who has tracked this industry over the past couple of years would find these answers predictable.
Read the rest on Scott's Harvard Management blog, Innovation Insights.