>> It may be useful for some companies to think about competitors. That's why I didn't phrase it as a general rule. In particular it may be useful for more established companies to. If a startup has to, though, they're probably doomed.
Back around the mid- or early '90s there was a management theory trend of working to identify institutional best practices and of formally benchmarking https://en.wikipedia.org/wiki/Benchmarking institutions against peers (often competitors). I don't recall much detail about it at all, because I was only a teenager at the time and I only heard about it from the summaries you'd see in magazines like the Economist. But what I do seem to recall is that (like many another management-theory trend) it went through a phase of red-hot excitement to widespread skepticism and moderate disillusionment, and partly for the obvious reasons: benchmarking competitors usually can't on its own deliver much insight into how to outperform the current leader in any given area, and doesn't usually offer much of an insight into future opportunities or challenges. So (it seems) even for established companies there are limits to how competitor-focussed it's usually advisable to be.
(AFAICT—and again, I'm just someone who read about this stuff in magazines as a child—this kind of management-theory/theory-of-the-firm study and experimentation really was much more prominent in the public eye twenty-five or more years ago, and has faded from popular awareness since; maybe because the work itself is less common, and less influential on institutions, nowadays too. I think that's a pity, because it seems relevant to some supposedly-new things you see generating excitement nowadays, especially in the vicinity of the tech industry. For example the whole Valve structureless-or-notionally-structureless-organisation effort is probably pretty well prefigured in the work of a generation of management consultants who looked at and tried out all kinds of institutional structures or absences of structure beside the traditional corporate model, generally in pursuit of much the same ends—more innovation, more amenability to change, better decision-making—and with similar mixed-to-disappointing results.
That's all for now kids. Next week, the X-Files. ;) )