Performing Competitor Analysis in Product Development
Competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors of the product you’re developing. This analysis highlights not just positive and negative aspects of the product, but also possible opportunities and threats. Some organizations call it product SWOT analysis.
Answering the question “Why do you want to perform competitor analysis?” is a critical aspect of performing competitor analysis. An organization gains competitive advantage only when it outperforms its competitors in a way that matters to the customer, so it’s important to ensure that the product has key differentiators that are a hit with customers.
Another area to analyze is the cost of the product. This is where extensive research needs to be done to arrive at a suitable price that caters to different market segments, customer personas, and economies.
A final aspect of gaining a competitive advantage is the stickiness of the product. This is different from possessing differentiating features. A product needs to be capable of getting customers addicted with its inherent purpose.
There are several approaches to performing competitor analysis. Below are a few I have explored and found successful in communicating feedback to stakeholders.
Star-based: Features and scenarios can be rated by giving star ratings—for example, a single star meaning poor and five stars meaning outstanding.
Points-based: Features and scenarios can be rated using a points system of either 1 to 5, similar to the stars, or in a rubric, with a number of points out of an ideal total being calculated.
Subjective feedback: Some stakeholders prefer detailed subjective feedback, as it can be easier to understand underlying analysis with written descriptions.
Competitor analysis should be initiated with a well-defined objective. Once it is complete, stakeholders must work toward fixing the gaps identified and building a better product. There are different approaches that can be used to perform competitor analysis, including as simple a method as visiting your competitor as a potential client and getting insider news. There are also professional organizations that do a great job of performing such analysis—it usually comes at a high cost, but the information is valuable.
Which method you choose is less important than what will be done with the results in the end. In my experience, few organizations invest a lot of time or money in performing competitor analysis, only to end up trashing the results in the safest product file. If you want to perform this analysis, be sure and be serious.
Anyone with fair knowledge and common sense can learn to do competitor analysis and evolve it over time as needed. The results should be shared with the appropriate stakeholders about the pros and cons of the product being developed, and hopefully you can make suitable improvements in subsequent releases.
Parimala Hariprasad will be presenting the tutorial User Experience Testing: Adapted from the World of Design and the session How to Design a Custom Mobile App Test Strategy at STAR WEST 2015, from September 27–October 2 in Anaheim, California.
