What Is an Indirect Competitor? (Definition and Examples)

Indirect competitors are businesses that offer slightly different products and services, but target the same group of customers with the goal of satisfying the same need. These are sometimes also known as substitutes. For example, hunger creates a need to consume food.

Entrepreneurship – Direct and Indirect Competitors

Examples of indirect competitors

To give you a better idea of what to look for, the following examples of indirect competitors are provided:

What is an indirect competitor?

An indirect competitor seeks to meet the same customers’ needs with their own brand of goods or services. A different product or service offered by your company’s indirect competitors competes with it. In the end, the same customer issue has conflicting solutions from both you and the indirect competitor. In order to satisfy a need, the customer may opt for your product or that of your indirect competitor.

Differences between direct and indirect competitors

There are several differences between direct and indirect competitors:

Products or services

The primary distinction between direct and indirect rivals is the goods or services they offer. Customers receive a solution from an unrelated competitor using a different strategy. As a result, the customer chooses one or the other. The same goods or services that your business offers are offered by a direct rival. Your business must describe how your product or service is superior due to this similarity. It might be more affordable or of higher quality, for instance.

Approach to a customer problem

Direct competitors and indirect competitors both have the same goals but different strategies. Both, however, address the desire or goal of a customer. As an illustration, if a client wishes to learn a new language, direct competitors provide the same service: tutoring. The difference is between which tutoring business the customer chooses.

In contrast, indirect competitors offer contradictory services or products. An in-person tutor provides a different method than a mobile app in the same scenario.


Your indirect rivals may offer their goods or services at a different price. Because the indirect rival does not provide the same products as your business, there is a price difference. As a result, there are differences in pricing between you and your indirect competitor. In order to attract customers, keep in mind that a lower price is more alluring to the average consumer.

Pricing differences between you and a direct competitor are probably smaller. This is due to the fact that you provide your clients with the same kind of good or service. Therefore, the range in price usually isnt significantly large.

How to manage indirect competitors

Keeping track of your indirect rivals will help you retain current clients and attract new ones. When you oversee indirect competitors, you interact with clients while developing your own company’s marketing plan. The strategies listed below can help you manage your indirect competitors and keep your business successful:

1. Establish your indirect competitors

Find out who your competition is when obtaining customers. Although identifying indirect competitors may be a little more difficult, you should be able to find out more about them through investigation and analysis. You may need to investigate both local and national or international indirect competitors depending on where your business operates.

For instance, if you run a fast-casual sandwich shop, your nearby fast-casual eateries that serve different types of food, like burgers, would be your indirect competitors. To find out how many restaurants in your neighborhood meet these requirements, you would need to conduct some research.

2. Analyze your indirect competitors

Understanding how to improve your own business requires first recognizing why your indirect competitors are indirect competitors in the first place. You assess what goods or services your indirect competitors offer and why when you examine them. Additionally, you should attempt to gain as much knowledge as you can about their offerings, including the price ranges, the variety, and the quality. Try to learn the number of units they sell and the number of customers they have.

3. Be persuasive with your customers

By making your product or service seem appealing and worthwhile to buy, you can persuade people by appealing to their desires. This could help you attract clients who were more likely to patronize an indirect rival than your company. To present your products in the most convincing way, find out more about your target market. Be prepared to answer customer questions with plenty of information.

4. Integrate your indirect competitors ideas

Because the customer must choose between the two businesses, think about incorporating a product or service from an indirect competitor into your own. To determine which products your indirect competitors sell that you could possibly use in your own company, learn more about them. When considering products, take into account production times, material costs, and labor.

Consider adding an agenda feature to your product, for instance, if your company sells stopwatch apps for smartphones and your competitor sells planners. As a result, your company’s product offers the customer more advantages.

5. Apply logic to your customers concerns

When addressing the reasons why customers are on the fence about buying your product or service, use logic. Use factual evidence and statistical data in your reasoning. Describe how using your product or service will benefit your client. Customers are more likely to choose your company’s product or service over that of an indirect competitor when they are fully aware of the benefits of doing so.


What are the 3 types of competitors?

Any business that provides the same thing as you is considered to be in direct competition, whereas a company whose goods or services differ from yours but may still be used to fulfill the same need or pursue the same objective is considered to be in indirect competition.

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