During the Cold War, America would fly spy planes over the Soviet Union to count how many bombers they had. Knowing exactly what the Americans were doing, the Soviets laid out hundreds of fake, wooden bombers to trick the Americans into thinking that they had a much bigger capability than they actually did. The problem was, America believed its own intelligence and built real bombers to counter the perceived Soviet threat.
It wasn't until after the fall of the Berlin Wall did we learn that, if we ever had gone to war with the Soviet Union, we would have annihilated them because our resources vastly outnumbered theirs. This massive unfair advantage would not have happened if it weren't for the good fortune of some bad intelligence.
Believing that your competition is stronger and better than you will pushes you to better yourselves. Whether real or perceived, believing you have a disadvantage forces you to find new and clever ways to compete. It's always the organizations that are resourced constrained that come up with the good ideas to win.
You can save money on competitive analyses by simply pretending that whatever your competition is doing, they are doing it better than you. This works no matter if you're the leader or the challenger. Instead of constantly trying to compare what you're doing to others, focus instead on constantly trying to improve yourself and the way you do things. You should believe, true or not, that there is always someone lurking on the horizon waiting to take advantage of you.
The greatest threat any organization can face is not its competition but its own success. With great success comes complacency - the false belief that you are the best and that you don't have to worry. The problem is, you'll only realize it's a false belief when someone else catches you by surprise. This pattern is repeated over and over and over. Wal-Mart, Microsoft and General Motors all believed that they were unbeatable...until a company who believed they were not as strong found a better way to compete with the 800lb gorilla.
