Recommended resources
The freely available resources this lesson will direct you to.
Hello. Last lesson mapped the firms a company relies on and the interfaces it controls. This lesson uses that map to answer a related question: who could win the customer’s work, spending, or relationship instead? The answer is rarely limited to companies selling similar products.
You will build a competitor set that distinguishes direct rivals from substitutes, credible entrants, and firms approaching from adjacent parts of an ecosystem. The aim is not the longest possible list. It is a set you could defend in a client discussion by explaining why each actor belongs, what might change its role, and what evidence you would check. Allow about 40–45 minutes, including the selected viewing and reading.
1. Define the contest before naming the contestants
“Who competes with ServiceNow?” is too broad a question. Competition looks different if the decision concerns IT service management, employee workflows, or a broader enterprise platform investment. The same parent company might be a close rival for one purchase, a partner for another, and irrelevant to a third.
Start by specifying five boundaries:
- Customer and job: Who is making the decision, and what outcome do they need?
- Unit of comparison: Are you comparing individual products, assembled solutions, contracts, or whole ecosystems?
- Geography: Where must the offering be sold, supported, and compliant?
- Time horizon: Who can compete now, and who might plausibly compete within, say, two years?
- Decision at stake: Is the question about winning new customers, retaining an installed base, setting price, or protecting a distribution channel?
Michael Porter’s The Five Competitive Forces That Shape Strategy, from Harvard Business Review, is a useful short reset. The first segment explains why rivalry alone gives an incomplete account of competitive pressure; the later segment emphasizes that defining industry boundaries is itself a strategic task.
The Five Competitive Forces That Shape Strategy
Watch these excerpts to frame the competitor set around the economic contest, rather than a familiar list of company names.
Watch competition's scope for the distinction among rivals, entrants, substitutes, and other sources of bargaining pressure. Then watch industry boundaries, focusing on Porter's warning that a useful assessment must also track how those boundaries are changing.
The distinction matters: a powerful supplier is not necessarily a competitor. It may constrain your margins without seeking the customer’s contract. Conversely, an internal customer team can be a meaningful substitute even though it is not a software vendor.
The image below offers a compact structure for the work: identify actors, classify their roles, compare them on decision-relevant dimensions, and show how the landscape may move.
2. Classify actors by how they threaten the position
Umbrex’s Competitive Landscape Mapping Framework supplies a practical taxonomy and mapping process. Read it as a way to discipline inclusion, not as a requirement to treat every ecosystem participant as a rival.
Map Market Dynamics with Competitive Landscape Framework
Read Umbrex’s framework for its actor categories, comparison dimensions, and method for moving from a name list to a decision-useful map.
In Section 3, “How the Competitive Landscape Mapping Framework Works,” begin at the explanation that the framework combines a taxonomy with visuals. Read the taxonomy through the end of “What You Map (The Taxonomy).” Continue through “How You Map (The Dimensions)” and “Typical Visual Artifacts”; focus especially on which dimensions would reveal real overlap rather than superficial similarity. In Section 5, “How to Apply the Competitive Landscape Mapping Framework: Step-by-Step,” read steps 1–7, beginning with scope through patterns. Stop after “Identify patterns and dynamics”; the later implementation steps are not needed for this lesson.
For a defined customer decision, use four principal labels:
Direct rivals offer a comparable way to perform the job and regularly contend for the same decision. Similar features are not enough: test whether the same buyer would put the offerings on a realistic shortlist, whether their sales overlap in the chosen market, and whether winning one commonly means losing the other.
Substitutes achieve a sufficiently similar outcome by a different means. An enterprise might buy a workflow application, build a solution using configurable tools, or outsource the work. These options need not have equal capabilities to constrain one another. A substitute can cap what customers will pay for a specialized offering or remove the need to buy it at all.
Potential entrants do not yet compete meaningfully for the defined decision but have a credible path to doing so within the stated horizon. Relevant evidence includes access to the target customer, transferable capabilities, a workable route to market, and an economic reason to enter. Technical ability alone is a weak entry case.
Ecosystem adjacencies are current partners, complementors, distributors, or gatekeepers whose existing position could let them redirect demand or expand into the job. They belong on a watch list, not automatically in the active rival set. Last lesson’s control-point tests help here: an actor with customer access, an important interface, or scarce data may have a more plausible path than one with a vaguely related product.
These labels describe a relationship to a particular contest, not a permanent identity. A firm can be both a complementor and a competitor. Its role can also differ by solution: an assembled offering built on its tools might substitute for a specialist suite, while a separately sold, comparable suite would be a direct rival.
3. Test adjacency instead of assuming it will become rivalry
Platform businesses make competitor boundaries especially fluid. A company that owns a customer relationship may add a new capability; a platform may move into a complementor’s space; a partner may start offering the customer an alternative route to the same outcome. None of those moves is inevitable.
In Marshall Van Alstyne and the Platform Revolution, from the MIT Initiative on the Digital Economy, watch the discussion of why looking only at existing product attributes can miss a future challenger. Treat the examples as an argument for investigating customer relationships and community access—not as proof that every large platform can enter every adjacent market.
Marshall Van Alstyne and the Platform Revolution
Watch this segment to see why a company’s access to users or a network can matter more to future entry than its current product category.
In anticipating rivals, follow the shift from comparing product attributes to asking who controls the connection with users. As you watch, distinguish a route into a market from evidence that entry has actually happened.
BCG’s Four Strategies to Orchestrate a Digital Ecosystem gives two concrete mechanisms: extending an ecosystem into adjacent offerings and competing with complementors. The latter can create a conflict, but it can also damage the platform if other partners become less willing to participate.
Four Strategies to Orchestrate a Digital Ecosystem | BCG
Read BCG’s examples to identify plausible paths from ecosystem participation to competition, while keeping the article’s examples separate from claims about what those firms are doing today.
In “Step One: Grow the Platform,” find the subsection “Expand into adjacent markets.” Read adjacent expansion, ending with the payment-service example. Then, in “Step Four: Maximize Ecosystem Monetization,” locate the bullet “Compete with complementors” and read partner competition. Focus on both the entry mechanism and the condition that limits its attractiveness.
A useful adjacency assessment therefore has two sides. First, ask what the actor could reuse: customers, distribution, identity, data, developer relationships, infrastructure, or an installed workflow. Then ask what it would still have to overcome: product gaps, implementation complexity, channel conflict, regulation, weak customer trust for the new job, or a business model that makes entry unattractive.
That second side prevents a common error in industry analysis: listing every hyperscaler, AI company, and payments firm as an imminent competitor simply because each possesses money and technology. A defensible entry claim specifies a path, incentive, constraint, and observable signal.
4. Build a two-layer set: active competition and monitored change
Consider an illustrative assessment of enterprise IT service-request management for large organizations in one defined national market over the next 24 months, with ServiceNow as the focal company. The decision is which alternatives could affect its ability to win or retain this particular work. It is not an assessment of everything either ServiceNow or another named company sells.
An initial set might look like this:
| Actor or option | Provisional role | Why it belongs—and what would change the judgment |
|---|---|---|
| Atlassian’s Jira Service Management | Direct rival | It can be considered for the same IT service-management decision. Confirm overlap in the customer size, procurement scope, and market being studied rather than assuming all customers view the offerings as interchangeable. |
| An internal team assembling a solution with configurable tools, potentially including Microsoft Power Platform | Substitute | It offers a different build-and-operate route to handling requests. Compare full implementation effort, governance, and ongoing support—not just software license prices. |
| A managed-service provider taking responsibility for the service outcome | Substitute, when the buyer can outsource that outcome | The buyer may shift spending from software and internal operations to a service contract. If the provider merely implements the focal software, it is instead a complementor. |
| An AI-native firm proposing to automate request resolution | Potential entrant | Its promise addresses part of the job, but place it in the active set only if it can meet the buyer’s requirements and is actually competing for comparable work. Pilots and qualified bids would strengthen the case. |
| An implementation partner with close access to the buyer | Ecosystem adjacency | It may currently increase the focal platform’s value. Watch whether it develops its own repeatable alternative, steers customers toward another stack, or continues to earn more by partnering. |
This is deliberately a provisional map, not a ranking of current market shares. Notice what it excludes. A cloud infrastructure provider used by a vendor is not automatically an IT service-management competitor. Its capacity and terms could be important dependencies, but inclusion in this competitor set requires a credible mechanism for winning the defined customer decision or changing its allocation.
The example also illustrates why the unit of comparison matters. “Microsoft” is too coarse a label for the internal-build option: the proposed substitute is an assembled solution operated by the customer, not a claim that all of Microsoft directly competes in every IT service-management procurement. If evidence later shows a Microsoft-led offering regularly bidding for the same complete scope, its classification for that scope should change.
Across software and platforms, the same logic yields different maps. A commerce marketplace may face another marketplace as a direct rival, a merchant’s direct-selling channel as a substitute, and a payment or discovery partner as an adjacency with a possible expansion path. An AI-native application may compete directly with another application while facing an in-house build as a substitute and a model provider as both dependency and possible entrant. Rebuild the set around the contested job; do not transfer labels wholesale between sectors.
5. Make the set defensible with evidence and explicit exclusions
A strong competitor set is a small analytical record, not just a slide of logos. For each included actor, capture:
- Threat mechanism: Does it win the same purchase, eliminate the need for it, enter later, or control an adjacent route to the customer?
- Overlap: Which customer segment, use case, geography, and buying decision are actually shared?
- Capability and access: Can it deliver the required outcome and reach the buyer on acceptable terms?
- Evidence and confidence: What is observed, what is inferred, and what is still unknown?
- Change signal: What event would warrant moving the actor from watch list to active competitor—or removing it?
Use evidence appropriate to the claim. Customer shortlists and competitive bids are especially informative for direct rivalry. Buyer interviews, total-cost comparisons, and observed build-or-outsource decisions test substitution. Hiring, partnerships, launches, pilots, and qualified bids may support entry—with different levels of confidence. Partner agreements, channel behavior, and product expansion can clarify an adjacency. Public announcements can establish intent; they do not by themselves establish customer adoption.
An explicit exclusion is equally valuable: “Included as an infrastructure dependency, but excluded from the active competitor set because we found no evidence that it offers or bids for the defined outcome in this market.” Such statements expose the boundary choices behind the map. Where evidence is thin, use ranges or a confidence label rather than giving speculative entrants the same status as observed rivals.
Finally, choose visuals to answer the decision, not to decorate it. A category tree makes the direct-rival, substitute, entrant, and adjacency layers clear. A comparison matrix can show segment overlap, solution scope, route to market, and proof of traction. An ecosystem map is better when partner access or gatekeeper rules explain the threat. Record meaningful changes—such as an entrant winning its first comparable bids—in dated notes so the map does not become a static snapshot.
Conclusion
A defensible competitor set begins with a precisely defined customer contest. Direct rivals seek the same decision; substitutes solve the job differently; entrants need a credible path into it; and ecosystem adjacencies merit monitoring when their existing relationships could support a move. Keep active competitors distinct from watch-list actors, and document the evidence that would change your classification.
That completes this module’s foundation in industry economics and competitive analysis. Next, you will turn to the enterprise technology estate—mapping systems of record, engagement, workflow, data, and intelligence—where many of these competitive overlaps originate.