7 Types of Competitors Every Marketer Has: A Lesson From The Godfather

Did you know you have 7 Types  of Competitors?

According to Michael Corleone in The Godfather Part III:

 “Never hate your enemies — it affects your judgment.”

Apply this useful advise to  your marketing  to assess your competitors and near substitutes.

Monitor your competitors to be able to develop effective strategies that achieve your business goals.

The hardest part?
Determine who your competitors are, since it’s not always obvious.

Why Pay Attention To Your Competitors

As the Godfather, Michael Corleone had it easy compared to today’s marketers when it came to knowing his competitors.

The lynchpin of any competitive assessment:
To select the brands and businesses to monitor.

But marketers often use a very restricted competitive set. As a result, their analysis doesn’t provide sufficient insights to accurately guide their strategic marketing planning.

To succeed, examine a wide range of competitors and near substitutes to develop your list of companies to track.

Pay attention to:

  • Existing players who have repositioned their brands or departed a category; and
  • New entrants into your category.


7 Types of Competitors Every Marketer Has

Like the Godfather, every marketer faces competitors. Fortunately for marketers, competitors fall into 7 types.

Use this list of 7 Types of Competitors, to assess your market and environment. In the process, you will improve your marketing.

Direct competitors

These companies sell the same products in the same markets and channels as your company. Don’t exclude a firm due to its size.

Similar competitors

These firms sell similar products and/or ancillary ones. Don’t overlook them since they could easily cross into your market by leveraging internal efficiencies.

  • These competitors may view their market either more broadly or more narrowly. They may use one or more different channels
  • Or, they may sell the same products to a different audience segments.

Dominant broad-line players

These are the major diversified merchants. They include big-box retailers like Wal-Mart, Costco and/or Home Depot as well as  online merchants such as Amazon and eBay.

Monitor their activity since they always look for new markets and opportunities. So they can easily enter your market without you knowing it.

Also, depending on your product and distribution channels, consider what other businesses may enter your market.

For example, Starbucks, a well-loved coffee brand with lots of retail outlets, could expand what they sell in their stores. They already sell coffee and related products.

Free or rented product alternatives

Pay attention to  free or low-priced alternatives. Depending on your product line, this may include  the public library or second-hand stores like Goodwill.

Many companies overlook these options. But in a weak economy, don’t underestimate consumers’ need to make tradeoffs.  For example, Warren Buffet, despite his wealth, lives way below his means.


Include suppliers and potential suppliers on your competitor list.

They have access to the raw materials that you and your competitors need.

Assess whether they’re considering:

  • Extending their offering to manufactured products,
  • Diversifying their product lines, and
  • Supplying more to your competitors.


Monitor your distributors and the companies you sell to.


  • Because they could decide to extend their product line backwards;
  • Or they could deliver your competitors products as well.

Also,  they may just filling their capacity to get more product out  so they don’t care how well and where the end retailer promotes it.

New market entrants

New market entrants can be difficult to discern before they open.

So pay attention to  new companies that sell products that compete directly or indirectly with yours.

Also these businesses  may be new to  your market. In particular be aware new players with the power to disrupt and/or change the market such as Apple’s iPad that has changed PC and netbook market or NetFlix that’s disrupted and changed the video rental market.

7 Types of Competitors Conclusion

Monitor the activity of these 7 Types of Competitors to understand what’s happening in your marketplace.

Then integrate this knowledge of your competitors into your marketing plans. This ensures that your strategies are protected and on track.

As a result, you won’t need to hate your enemies. Instead, you can  figure out ways to work around them. So Michael Corleone said, your judgment won’t be clouded by your emotions.

To make sure you consider all 7 Types of Competitors, include them in your marketing  and budget planning.

Happy marketing,
Heidi Cohen

Editor’s Note: This article was originally written on August 5, 2011 and updated on July 23, 2022.

Photo credit: Paramount Pictures; Francis Ford Coppola.

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