How to identify ‘Indirect Competitors’ who are solving the same problem

Indirect competitors don’t hurt you because they look similar — they hurt you because they solve the same underlying problem in a different way. When a rival offers an alternative path to the same outcome, customers compare you even if you don’t compare yourself. The problem isn’t your product; it’s the narrow definition of your competitive landscape. If your analysis focuses only on category‑defined rivals instead of intent‑defined rivals, you’ll never see who’s quietly absorbing your demand.

Understanding the difference between category competitors and problem competitors is the key to finding them.

Category Competitors: The Obvious Layer

Category competitors are the ones that look like you. They signal:

• similar features
• similar positioning
• similar messaging
• similar market labels

This creates tunnel vision. You track the brands that share your category — even if they don’t share your customer’s intent.

When category focus replaces problem focus, your competitor map becomes narrow, not accurate.

Problem Competitors: The Indirect Layer

Problem competitors are the ones solving the same underlying need. They signal:

• alternative solutions
• different formats
• different pricing models
• different user journeys

This creates threat. Customers don’t care about categories — they care about outcomes. Anyone who delivers the same outcome is a competitor, even if they look nothing like you.

When problem competitors replace category rivals, your real competition becomes who solves the need, not who shares the label.

Summary of Differences

Feature	Category Competitors	Problem Competitors
What it signals	Similarity.	Substitution.
Focus	Market labels.	User intent.
End Result	“We know our category.”	“We know who steals our demand.”

In short:

Indirect competitors aren’t in your industry.

They’re in your customer’s decision process.

Category Competitors vs. Problem Competitors: Five Real-World Examples

Example 1: A Dry-Cleaning Service

Category competitors:

A dry-cleaning business traditionally monitors other dry cleaners in its area. It compares turnaround times, prices, garment services, opening hours, and pickup locations because these are the businesses it considers direct competitors.

But the customer’s underlying problem may be broader: “How can I keep my work clothes looking professional without spending time washing, ironing, and maintaining them myself?” A customer asking that question may consider several alternatives that would never appear on a dry-cleaner’s competitor list.

The dry cleaner is defining competition according to the service category rather than the outcome the customer wants.

Problem competitors:

A clothing-care subscription service offers customers scheduled collection and delivery of garments, while a home laundry service offers washing, drying, and ironing. Neither business looks like a traditional dry cleaner, but both can remove the same underlying burden: keeping a customer’s clothes clean and ready to wear without doing the work themselves.

A customer who values convenience may choose one of these alternatives without ever comparing traditional dry-cleaning businesses against each other.

The real competitive question is not who cleans clothes the same way, but who removes the same problem from the customer’s life.

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Example 2: An Orthodontic Clinic

Category competitors:

An orthodontic clinic defines its competitive landscape around other orthodontic practices. It monitors their treatment options, practitioners, locations, prices, and patient reviews because those are the businesses it expects prospective patients to compare.

But the underlying problem for an adult patient may not be “find an orthodontist.” It may be “I want my teeth to look straighter without having obvious braces.” That outcome can be addressed through more than one professional route.

If the clinic only tracks orthodontic practices, it can miss businesses offering alternative solutions to the same desired result.

Problem competitors:

A cosmetic dental practice promotes minimally invasive cosmetic treatments that can improve the appearance of mildly misaligned teeth without presenting itself as an orthodontic provider. For a patient primarily concerned with appearance rather than correcting a complex bite problem, that practice can become a genuine alternative.

The two businesses may have different clinical scopes, treatment models, and professional categories. Yet from the customer’s perspective, they can enter the same decision when the desired outcome is a more attractive-looking smile.

The indirect competitor appears when customers substitute one route to the desired outcome for another.

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Example 3: A Mobile Phone Repair Shop

Category competitors:

A mobile phone repair shop normally monitors other repair shops. It compares their prices for screen replacement, battery replacement, diagnostics, turnaround times, and warranty policies because those businesses offer the same type of service.

But a customer with a damaged phone is not necessarily trying to buy “phone repair.” The underlying problem is “I need a functioning phone without dealing with the cost or disruption of replacing it.”

That problem can be solved without visiting a repair shop at all.

Problem competitors:

A refurbished-phone retailer offers customers a replacement device at a lower cost than purchasing a new phone, while a mobile-phone trade-in service lets the customer exchange the damaged device and move to another handset. Neither is a repair business, but both provide an alternative path to the same practical outcome: getting the customer back to a usable phone.

A repair shop that only tracks other repair businesses therefore sees only one portion of the customer’s actual decision.

The customer’s problem determines the competitive set; the method used to solve it does not.

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Example 4: A Home Staging Service

Category competitors:

A home staging company considers other staging companies its direct competitors. It compares their furniture inventories, styling packages, fees, photography partnerships, and turnaround times because those businesses provide the same named service.

But the homeowner is not necessarily trying to buy “home staging.” The underlying problem is “How do I make my property more attractive to buyers so it sells more effectively?”

That outcome can be pursued through several different routes.

Problem competitors:

A property photographer offers a service focused on creating stronger listing imagery, while a decluttering and organization specialist helps homeowners remove visual distractions and present rooms more effectively before the property goes on the market.

Neither provider is a home staging company. Yet both can absorb part of the demand that would otherwise lead a homeowner to hire a staging service, because each addresses the broader objective of making the property more appealing to prospective buyers.

A category competitor sells the same intervention; a problem competitor offers another way to achieve the same result.

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Example 5: A Septic Tank Pumping Company

Category competitors:

A septic tank pumping company traditionally monitors other septic-service providers. It compares pumping prices, response times, service areas, and maintenance packages because those are the companies offering the same conventional solution.

But the homeowner’s underlying problem may be “I need to stop dealing with recurring wastewater problems on my property.” Pumping the tank is only one possible response to that problem.

If the company defines competition only around pumping services, it can miss alternatives that solve the underlying issue differently.

Problem competitors:

A homeowner dealing with repeated septic problems may instead invest in a septic-system replacement or an alternative wastewater treatment system. Those providers are not competing with the pumping company through identical services, but they can eliminate the recurring problem that causes the homeowner to call for pumping in the first place.

For a customer tired of repeated maintenance costs, the relevant comparison may therefore be between continuing to pump the existing system and investing in a different long-term solution.

The indirect competitor becomes visible when you stop asking “Who offers my service?” and start asking “What other purchase could make my service unnecessary?”