In strategy, one of the most important concepts is that of indirect approach.
B. Liddell Hart says, "a direct assault on an unshaken enemy in position has no justification in history," and the same applies in marketing.
When our competitor launches their latest ad campaign, our gut tells us to launch one of our own. When they lower their prices, we lower ours. When they rebrand, we rebrand.
And yes, there are times when you may want to copy your competitor's approach, but we usually want to beat them.
So instead of copying them, Hart says that when our competitor moves, we must "avoid a frontal attack on a long-established position; instead, seek to turn it by a flank movement, so that a more penetrable side is exposed to the thrust of truth."
When they lower their prices, instead of lowering ours, we should promote our higher quality. When they rebrand, we should seek to build a legacy. When they launch an expensive TV campaign, we should look for more cost-effective media and blanket the customer with an opposing position.
Why? As Hart says, "The way to success is strategically along the line of least expectation, and tactically along the line of least resistance."
Meaning, your competitor has a limited budget, just like you do. So if they have an established position in which they've invested, they are spending less somewhere else. They are both less prepared, and because they believe it to be less important (or else they'd have invested more), you will face less resistance along that approach.
To give an example, if your competitor has invested heavily in TV advertising, it is safe to assume they are spending less somewhere else. So that might be a good time to heavy up on your social media advertising or AdWords, or even PR. If they have a strong commitment to social media marketing, you'll likely face little resistance in more traditional media.
If they have lowered their prices, they may expect you to lower yours. So by focusing instead on quality, you undermine their position.
If they have a fancy new brand, by focusing on legacy, you make their rebranding less valuable.
Of course this is extremely simplified, and every industry and business faces unique challenges and competitors. But simple lessons expose basic truths: your competitor expects you to have the same values that they do, and to invest in the same places they do.
So if you want to beat them, determine the media, channels, and messages your competitors value, and find their opposites—using the indirect approach.