Why Companies Spend Money on Competitor Analysis

In the 1960s, IBM did something that seemed strange at the time: they hired an entire team that did nothing but analyze competitors' products.

This team's job wasn't to "copy" — it was to "understand": In which dimensions do competitors win? In which do they lose? How important are their winning dimensions to customers?

From this analysis, IBM discovered something critical: customers chose IBM not because it was "the best," but because "nobody ever got fired for buying IBM." In other words, trust and security mattered more than features. This phrase later became one of the most famous marketing maxims in business history, included in Rosser Reeves's *Reality in Advertising* (1961) and countless business school textbooks. IBM adjusted its entire marketing strategy accordingly — they stopped fighting on features and started fighting on trust.

By the 1980s, Competitive Intelligence had formally become a discipline. Harvard Business School's Michael Porter, in *Competitive Strategy* (1980), listed "competitor analysis" as one of the foundations of the Five Forces framework. He wrote: "The purpose of understanding competitors is not to imitate them, but to predict their next move."

Your hotel needs this kind of analysis too. Not to "imitate competitors," but to "understand why customers choose."