Competitive Analysis to Make your Products Thrive 💪🏻

Hey Impactful PM! It’s Aneesha :)

Every product manager dreams of their creation becoming the go-to solution. It's not just about beating the competition, it's about validating your vision and delivering exceptional value to your users.

But in today's saturated markets, simply hoping for the best isn't a strategy 👀.

Here's the million-dollar question: Who are you truly up against? Who are those stealthy competitors vying for the same audience and the potential revenue you've meticulously planned for?

More importantly, why are users choosing them? What are they doing exceptionally well (or terribly wrong) that's influencing buying decisions?

This is where competitive analysis steps in, and it's about to become your new best friend. Forget guesswork – we're diving into practical, actionable steps to get you the answers you need. 😎

Product Managers don’t work on guesswork. They work on data-driven decisions to build products that users love.

Data analysis is a superpower for product managers ✨

Introducing Data Dynamics Dispatch, your free newsletter to learn modern user research and business data analysis techniques, strategies, and concepts from scratch to build products that cater to user needs.

Benefits of effective data analysis for PMs:

• Spot the gaps in the market, identify trends through market research reports, and anticipate the right user needs.

• Decipher user behavior through website analytics, A/B tests, and user surveys to plan the right features to build.

• Go beyond assumptions, reduce risks, and make concrete data-driven decisions.

Upskill your user and business analysis skills from today!

Why Learning About Your Rivals is Key? 🔑 

Learning about your product’s rivals is not about blind imitation. It is more about making informed decisions using your strategic intelligence, building an awesome product, and achieving sustainable success.

Here’s in more detail why you should learn about your rivals.

Helps you make informed decisions 🎯

When you have crucial insights about your competitor’s patterns, strategies, strengths, and weaknesses, it makes it easier to find a focus for your strategies.

You get to identify unmet customer needs and develop products that fill those gaps, ultimately propelling market differentiation.

Example ✅: Consider a running shoe company. Analyzing competitor strengths might reveal a brand known for great cushioning. This knowledge lets you focus on a different strength, like breathability, to attract runners who prioritize that feature.

Capitalize on rival’s shortcomings 🥊 

When you’re actively tracking your competitor, you’re very likely to identify threats and shortcomings that your rival may be facing at the moment or in the future.

This analysis will help you prioritize the right features and gain a clear competitive advantage.

Example ✅: Say you're developing a note-taking app. You discover a competitor's app allows creating folders, but users complain it lacks strong search functionality.

This insight reveals an opportunity to prioritize a robust search feature in your app, giving you a competitive edge and enhancing user experience.

Reveals market trends 📈

Competition analysis acts as a window into broader market trends.

Identifying competitor responses to these trends allows you to not only stay relevant but also anticipate future market shifts and adapt their product roadmap accordingly.

You can learn a lot more from your competition. Let’s now look at how to do it right.

Step-by-step approach to conducting a thorough competitive analysis 🧐 

You need both an eagle's and a mole’s eye to conduct an in-depth and result-driven competition analysis.

Identify your Competitors 🎭️

1. Direct Competitors ➡️ 

These are your arch-rivals (meaning chief competitors) – the companies with products that most closely resemble yours. They target the same customer segment and offer similar features, vying for the same slice of the market pie.

Example ✅: Say you manage a video conferencing app. Your direct competitors would be other video conferencing solutions with similar functionalities, targeting businesses or individuals who need to hold virtual meetings. Eg: Zoom and Google Meet.

2. Indirect Competitors ↩️ 

These aren't carbon copies of your product, but they offer solutions that might partially satisfy your target audience's needs. While not head-to-head competition, they can still impact your user acquisition and retention.

Example: Continuing with the video conferencing app, indirect competitors could be project management tools with built-in video chat features. These tools might not be the primary choice for video conferencing, but they offer a substitute for basic video communication needs, potentially swaying some users away from your app. Eg: Zoom and Microsft Teams.

The best framework to use here is the Porter’s 5 Forces model:

Gather Information About Competitor Products ℹ️

There are many smart ways you can gather your competitor’s information. Here’s a quick list of them:

• Websites & Marketing Materials: These resources provide valuable insights into their product offerings, pricing strategy, target audience, and brand messaging.

• Customer Reviews: Analyze reviews on app stores, social media, or product review websites to understand user sentiment and identify pain points.

• Financial Information (if publicly available): This can reveal a competitor's market share and growth rate, indicating their overall success.

• Become a User: If possible, test your competitor's products firsthand. This provides a deep understanding of their user experience (UX), strengths, and weaknesses.

Analyze Competitor Strengths and Weaknesses 💪

Your competitor's strengths and weaknesses are key to crafting an epic strategic game plan 🎳.

Here's where the mighty SWOT analysis comes in. It's a framework that allows you to dissect each competitor across four key areas:

Strengths 🏋️‍♀️: These are your competitor's advantages that give them an edge in the market. Here's what to look for:

• Product Features: What unique features or functionalities do they offer?

• Brand Recognition: Do they have a strong brand reputation or loyal customer base?

• Marketing and Sales Strategies: How effectively do they reach and acquire customers?

• Pricing Strategy: What pricing models do they use? Are they particularly attractive or pose a challenge?

• Customer Service: Do they excel in providing exceptional customer support?

Weaknesses 🤒: These are your competitor's shortcomings that you can potentially exploit to gain an advantage. Consider:

• Product Limitations: Are there any missing features or functionalities in their product?

• Negative Customer Reviews: What are common pain points or frustrations users express?

• Internal Inefficiencies: Are there any areas where their operations might be lacking?

• Limited Marketing Reach: Do they seem to struggle with reaching your target audience?

Opportunities 🔮: These are external factors that your competitors can potentially leverage for growth. Look for:

• Emerging Market Trends: Are there new trends or technologies they could capitalize on?

• Customer Needs Not Currently Met: Are there unmet needs in the market they could address?

• Expansion into New Markets: Do they have the potential to expand their reach geographically or to new customer segments?

Threats ☠️: These are external factors that could potentially hinder your competitor's success. Consider:

• New Entrants: Are there disruptive new players entering the market with innovative solutions?

• Shifting Customer Preferences: Are there changes in user behavior that could negatively impact their product?

• Technological Advancements: Are there emerging technologies that could render their product obsolete?

Take a deeper dive at competitor’s strategies and moves 🤿 

Let’s explore some areas where you can track and learn from your competitor’s moves.

Customer Acquisition and Retention

• Marketing Channels: 
  
  Where do they focus their marketing efforts? Do they rely heavily on social media advertising, content marketing, influencer partnerships, or a combination? Analyze which channels seem most successful for them in attracting new users.
  

• Promotional Offers: 
  
  What tactics do they use to incentivize new users? Do they offer free trials, discounts, or freemium models? Understanding their acquisition strategies can help you refine your own approach to attract customers.
  

• Customer Engagement Strategies: 
  
  How do they keep users hooked on their product? Do they offer loyalty programs, exclusive content, or in-app features that encourage continued use? Analyzing their retention strategies can inspire ways to keep your own user base engaged and coming back for more.

Communication Channels

• Website and Blog Content: 
  
  What messaging do they convey on their website and blog? What tone of voice do they use? How do they position their product and its benefits? Analyzing their content strategy can give insights into how they communicate with their audience and the key messages they want to convey.
  

• Social Media Presence: 
  
  How active are they on social media? What platforms do they prioritize? What type of content do they share? Analyze their social media presence to understand how they interact with their audience and build brand awareness.
  

• Customer Support Channels:
  
  How do they handle customer inquiries and complaints? Do they offer multiple support channels like email, phone, or live chat? Analyzing their customer support approach reveals how they prioritize user experience and address customer concerns.

Pricing Model

• Pricing Structure: 
  
  What pricing model do they use (subscription, pay-per-use, freemium)? What are their different pricing tiers and what features do they offer at each level?
  
  Analyzing their pricing strategy can help you determine the optimal pricing model for your own product and ensure you're offering competitive value.
  

• Promotional Pricing: 
  
  Do they offer discounts, coupons, or special deals? How frequently do they adjust their pricing? Understanding their promotional strategy can inform your own decisions on using pricing as a lever to attract customers.

Benchmark your Product Against Competitors 🖲️

Once you've analyzed your rivals, it's time for a head-to-head comparison. Here's where a competitive analysis matrix comes in. This is a table that visually compares your product against key competitors across crucial factors:

• Features: List the core functionalities of each product.

• Pricing: Compare pricing models and highlight any differences in tiers or value propositions.

• Target Audience: Identify the customer segments each product targets.

• Customer Reviews: Analyze user sentiment towards each product, pinpointing strengths and weaknesses.

A Win/Loss Analysis focuses on analyzing why you win or lose sales deals, specifically against competitors. It helps you understand customer decision-making and refine your sales approach.

Read here on how to use the Win/Loss matrix for competitor analysis.

That’s all for today !

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Cya!
Aneesha ❤️ 

Connect with us on LinkedIn:

• Areesha Shaikh

• Aneesha S

• Twice the Impact PM