How often have you heard your sales team rip on a competitor? Maybe it was spurred by an article where one of their VPs was quoted saying something silly. Everyone on the team reads the forwarded email, laughs, and moves on. But you are a product manager. You know the difference between tittering gossip and true competitive analysis.
One way to know your actual advantage is to run a competitive analysis.
Competitive analysis is a vital part of strategic and product planning. It allows you to gauge your competitive advantage and drive your approach with real data and insights — not just a hunch. If you are new to product management and this all seems a bit foreign, do not worry. This analysis can be as simple as a quarterly deliverable to help you track your competition over time. Or, it can be a tightly focused look at a specific area.
The first step is to know who you are up against — the companies that are vying for customers in your same market. Once you know who they are, be careful not to get lost in the details, recording their every move. Instead, you want to focus on collecting key information: their products and services, market share, and strengths and weaknesses.
All of this will help you answer two core questions: How do our own products and services compare? And how can we differentiate what we offer?
The core questions may be simple, but there are different types of analyses which are used in different scenarios. This is one reason why we include competitor tracking built into Aha! — you can use our software to set up competitive profiles and then create visualizations to see how your product stacks up against the rest.
And if you are not yet an Aha! customer, you can start your competitive analysis right now by downloading one of our free competitor analysis templates. But before you get started, you might need a quick walkthrough of the different types of analysis out there.
So, here are some of the most common approaches, listed alphabetically:
A capabilities analysis is helpful for when you need to move deeper than a company-level comparison. This pits common product capabilities against each other so you can assess any advantage or capabilities that your product does not yet have.
Competitive differentiation analysis
You want to determine what makes your product unique so you can create a strategy that sets you apart from the competition. Use this analysis to visualize the value your product offers today and plan for the value you want it to offer in the future.
Markets change over time and you need a way to show how your product stacks up. A competitive landscape helps you do this by mapping your competitors against yourself — seeing where your company fits within a quadrant view of leaders and laggards.
The competitive overview is a comprehensive compilation of key information about your competitors. Think of it as a standardized approach that you can use over and over — organizing information ranging from basic (website, location, year founded) to more complex (mission, strengths, weaknesses). This overview can be referenced when you launch new features or used to help onboard new teammates.
Sometimes you just need a detailed look — a sort of one-sheet on each competitor. This is helpful for internal teams. Your marketing team might use them while planning new campaigns or sales can keep on hand for reference. Gathering this info in one place makes it easy to compare competitors and just see relevant information at a glance.
Removing opinion and emotion in favor of objective metrics can help you make better decisions. With scorecards, you can actually quantify the competition — scoring competitors on attributes like market awareness and product quality. From there, you can rank the competition and literally measure the threat.
Get a detailed view of how your product features compare to the ones in your competitors’ products. This is especially helpful as you are evaluating where to invest — map out what features the competition has and lacks, then include your own feature set. Indicate what progress you have made to quickly visualize work in progress that will add strong value.
The imitability ladder allows you to visualize where your product is strong and where it is vulnerable. For example, you might discover that a competitor could copy one of your most innovative features or steal your reputation with your customers. Once you are aware of any risks, you can create a strategy to mitigate them.
Value proposition analysis
Value proposition analysis compares the key messages your competitors use to communicate the benefits of their product. This way, you are able to see how they message their core value to customers and compare it to your own messaging.
You cannot assume that your product is the best solution — you need to plan for it to be.
Competitive analysis is good and helpful. Once you know a company’s strengths and weaknesses, you can use that knowledge to inform your own product plans.
However, obsessing over competitors and their moves is not going to make your product successful. The key is always to keep your focus on your customers.
How do you think about competitive analysis today?
Build product like you always wanted. See for yourself — start a free 30-day trial.