Many entrepreneurs learn over the years that they are not naturally systems/processes minded. They are creators, quick-starters, energy people. Founders usually get excited about the idea, and take action without proper systems in place and then find themselves in difficult situations afterward.
If you want to build an innovative product, it pays to study the landscape where you’re going to play. That’s why doing competitive research is critical for your business strategy.
Doing Competitive Research & Analysis is like peeling an onion. The more layers you peel, the more insights you reveal. It also might bring tears to your eyes if you realize that your product value proposition is not actually unique.
Why do I need that? I know my competitors well enough
Without a sober evaluation and understanding of how you stack up against competitors, the product can result in failing with attracting, retaining, and deepening the relationship with your core group of target customers.
To be competitive, you need to know what’s out there, what has worked, and what has not worked.
After all, you don’t want just to launch a product that copies all your competitors’ features as is. You need systematic thinking to organize information and cherry-pick critical features and opportunities that will create value for your customers.
Remember, partial research will lead to partial decisions. The devil is in the details you've just collected.
I’m sharing with you the Competitive Research & Analysis template I use in my strategy framework. It helps inform the strategic and tactical business decisions of your product.
To make your competition irrelevant, you must offer something unique that radically better their current options, and you’ll figure this out by diving into the spreadsheet and analyzing the raw data.
The end goal of this template is to extract your learnings into a form of brief, or presentation with recommendations.
Recommendations on how to use the template
Who are your top 5 competitors? Try to find at least 5 direct and 5 indirect competitors. Every organization has competition, direct or not.
I don’t buy when people tell me “We don’t have competition.” Anyone who can’t name 3-5 competitors is woefully misinformed.
Color-code the meaningful data points:
Use yellow to highlight the most common information (e.g., All competitors struggle with a feature)
Use green to highlight positive attributes (e.g., Highest monthly traffic)
Don’t use more than two colors to keep it simple.
Identify which factors give other products their competitive advantage.
Here are examples of different ways in which you can order the list of competitive products:
Highest traffic or most downloads (Put the most popular competitors at the top)
Newest to oldest in the market
Numerous features to minimal features
Largest to smallest in terms of funding, employees, offices, etc.
You are looking for commonalities and differences so that you and your team can truly understand why certain products are more successful than others.
Now you are ready to analyze each competitor by product attributes (See the example in the spreadsheet).
Look for trends, patterns, and gaps. Often, you will notice common patterns being repeated across many products within an industry.
Try to answer the following questions about each competitor briefly:
How is it competing against your value proposition?
If it’s a direct competitor, what is it doing great or particularly badly?
If it’s an indirect competitor, is it competing with a similar solution or is it going after a similar customer segment?
Write a final analysis - an easy-to-read (1page) summary of your competitive analysis along with your recommendations about how to move forward.
At this point, you should see which competitors are a success or failure. You can say which competitor is number one, number two, and who’s doing something impressive even if they’re farther behind in the marketplace race than others.
In short, your goal is to understand if there’s room to win, and that’s when you should outline the opportunities based on your research.
With this Competitive Research & Analysis template, you’ll be able to easily convert the raw data into actionable learnings and make recommendations about how to move forward with your business strategy.
A great analysis also reveals gaps and opportunities for your product to take advantage of in the marketplace.
If you have any questions, drop them in the comments below 👇🏻.
Thanks for reading!