Companies succeed by building on their strengths, essentially by doing what they do well. But, sometimes a company’s competitors are doing more to move their business forward, and unless companies respond adequately, they risk falling behind while the competitor grows. So, it is important to pay attention to what competitors do.
Nonetheless, companies must not lose sight of what they do well, and they must recognize the importance of sticking to their own strengths. Sometimes, this can mean matching a competitor’s moves. Yet, in some cases, a company can be better off concentrating upon its own strengths and not necessarily following in a competitor’s footsteps. So, determining the appropriate response to competitors can seem like a balancing act.
In fact, which competitor leads and which one follows can vary, depending on the situation. A good example of this was written up in the March 19, 2025 Wall Street Journal article “P&G Overtakes Old Rival Unilever“ by Natasha Kahn and Sharon Terlep, which discusses consumer packaged goods companies Proctor and Gamble (P&G) and its rival Unilever. The article illustrates how which one leads and which one follows can vary from time to time. And, for these two companies, an activist investor had been influencing how they responded to their rival.
P&G has long been recognized in the marketing world as the stellar example of success in consumer packaged goods. Yet, the article reports, “Not long ago, P&G was in a sales slump and an activist investor was pushing the company to be more like its European rival” Unilever. The activist investor “said P&G was hopelessly mired in the past. He said the company should acquire smaller brands and bring in talent from the outside.” “He held up Unilever as an example of a more successful rival.” “P&G executives argued the future lay in the same fundamentals that had guided the company for 180 years.” This was “trusted brands…that can dominate their category.”
I’ll point out that, based on my many years researching business success and failure patterns, P&G execs were right that sticking with those fundamentals was what P&G needed to successfully steer the company into the future. My research finds that businesses succeed by building on their strengths, and those fundamentals are P&G’s strengths.
As the article explains, P&G did make some changes after the activist investor’s urging. Subsequently, during the pandemic, “P&G notched its biggest sales increase in decades, riding demand for household goods as cleaning-obsessed consumers stayed home.”
More recently, however, according to the article, the activist investor has encouraged Unilever to be more like P&G. He “pushed for changes, many following the P&G playbook.” The article tells how Unilever has since shed some brands and has been “shifting its portfolio toward higher priced products.”
A key lesson here is that analyzing and responding to competitors is a two way street. Awhile back, P&G was pressured to act more like Unilever. Later, however, Unilever has been encouraged to more closely follow in the footsteps of P&G. Ultimately, companies succeed by building on their strengths. Although they need to pay attention to what their rivals are doing, they must not stray from focusing upon their own strengths. Building on those strengths is what drives successful growth, even though how well a company performs compared to competitors can vary over time.
