Competitive Product Analysis: Why You Need It and How to Perform It

A competitive product analysis is an attempt at assessing how well you are doing relative to the competition. It is a strategy that involves the identification of your key competitors and an assessment of the strengths and weaknesses of their products for you to see how yours compare.

With this competitive analysis, you take into account multiple aspects, ranging from functionality to use cases, reliability, sales, and marketing. It not only helps you to see how your product stacks up but also to get your product strategy right.

How Can You Find a Competitive Product Analysis Helpful?

The following are some of the ways you can benefit from doing a competitive product analysis:

It makes your USP clearer – This evaluation can go a long way in helping you decide the best way to position your product and market it to the customer. It lets you spot your product’s unique value proposition relative to those offered by the competition.

It guides what to include – Through an effective competitive analysis, you will be better able to know what functionality to provide. What are the minimum features your product must have to please your customers? What was previously sufficient for your minimum viable product (MVP) might no longer be. This evaluation can enable you to detect if this is the case.

It lets you in on what the competition is doing right – A competitive product analysis can make it possible to identify those things that your competitors excel more in than you. This information will guide you on actions to take to match them and even do better. You could lose customers if your product lacks a key capability that a rival provides.

It helps you know what’s trending – You can know what’s generating waves through a competitive analysis. This exercise gives you a chance to learn of the moves that are being made by the competition. What new technologies are your competitors adopting? What topics are generating an increasing interest? Good trend identification can enable you to discover emerging markets for your product.

It allows you to identify opportunities – Just as a competitive analysis lets you know what the competition is doing right it also reveals what they are getting wrong. This can unmask new opportunities that you can take advantage of.

Among the other benefits of good competitive product analysis is right pricing. It lets you assess if your price is right in the market or for buying new product management software.

How to Perform a Competitive Product Analysis

What’s the best way to approach your competitive analysis? This can be rather confusing for many people because there’s no standard process for performing it.

We highlight below some key steps that should feature in your analysis.

Determine the competition

You should start by first identifying the other companies you’re competing against. The focus should be more on your direct competitors – those offering similar products to your target market.

However, you should also monitor those offering non-similar products that can potentially serve a similar purpose. This is more to see if they’re turning into more direct competition.

Assess your product

It is helpful to also hone in on your product. The fact that a competitive analysis seems to center on your competition doesn’t mean you shouldn’t look inward. What does your product excel in and what can you do better? This provides a benchmark against which you assess solutions by the competition.

Analyze the competition’s product line

Proceed to assess the products that your competitors provide. Evaluate the quality of offerings and ask some probing questions.

What types of products are these? Do customers buy them once or recurrently? What market share do your competitors control? What opportunities are there for differentiation?

Your competitors may offer multiple products. In such a case, pay more attention to the core or flagship solution – possibly that generating the most revenues.

Examine websites and collateral

Take some time to look through the websites and collateral of the competition. These can give you an idea of what they have up their sleeves.

Check product pages on websites to identify USPs, uses cases, and messaging. Watch videos hosted on a company’s website or posted on third-party platforms, such as YouTube. Check help documentation, tutorials, and press releases to get answers you don’t yet have to some questions plus hints.

Evaluate marketing and sales strategies

How do your competitors market and sell their products? You need to find this out in your analysis. Websites and collateral offer probably the easiest means of determining marketing and sales strategies. Take note of processes, channels, locations, resellers, discount programs, and revenues, among others.

Give attention to pricing

Do not forget to consider what the competition charges for similar products or services. The information you glean should be used to ensure that what you charge, including shipping costs, is as competitive as possible. If you must charge more, your sales team should be able to explain convincingly why that is so.

Check social media

In your analysis, use social media to get a clue of what your competitors are up to. Investigate their engagement rates and how they guide engagement. What sorts of content do they post and how often?

Also, pay close attention to the social networks they use and the respective engagement rates on these platforms.