08 February, 2015

Competitor Analysis: A Simple How-To Guide To Get Started

Competitor Analysis is an assessment of the strengths and weaknesses of current and potential competitors of the product in hand. This analysis highlights not just positive and negative aspects of the product, but also potential opportunities and threats. Some organizations vaguely call it product ‘SWOT’ analysis.

Competitor analysis can be done at multiple levels. One can just pick a super set of all features available across the products that are comparable and map each product’s capability against that feature. Additionally, comparison can be done at a technology level. For e.g. comparing Teradata with other data warehouse products. Some comparisons can be done across specific market segments as well.
  1.      Product Features
  2.     Technology
  3.      Market segment
  4.      Geographical areas
  5.      Others
Competitor Profiling
Answering the question, “Why do you want to perform competitor analysis?” is a critical aspect of performing competitor analysis. This in turn leads to identify several key indicators based on which this exercise can be carried out. Few indicators that are instrumental in performing competitor analysis are listed below:
  1.      Industry / Domain
  2.      List out potential competitors / competitor products
  3.      Users of competitor apps (to understand why these users like the competitor more)
  4.      Competitor’s market share and why they may be ahead
  5.      Competitor’s strategy (sales, marketing, branding, promotions, advertising)
  6.      Social media presence for mass market apps
  7.      Areas they excel at where the product is lagging way behind
  8.      Cost / Distribution factors
An organization gains a competitive advantage only when it outperforms its competitors in a way that matters to the customer. It is hence important to ensure that the product has key differentiators that are clearly a hit with customers. This doesn’t mean that one has to rain all the features into single product and offer a gigantine mixture of all solutions in one place. Dell, for example, is known for mass customizations depending on stakeholders needs.

Another area is the costing aspect of the product itself. Customers are constantly wondering if they can find a great quality product that solves a problem or unmet need at a very cheap price. They are constantly on the lookout for organizations that are cheaper in pricing. This is where extensive research needs to be done and arrived at a suitable price that caters to different market segments, customer personas and economies.

The last aspect of gaining a competitive advantage is w.r.t the stickiness of the product. “What’s sticky about your app?” can make or break any product. This is different from possessing differentiating features. For e.g., “What’s so addictive about Facebook that people would chuck filling timesheets and chat with friends online at the cost of organizations money?”. Products need to be capable of getting customers addicted with its inherent purpose.

If someone is smarter than you, make him your friend. If he can’t be your friend, buy him out and kill him. A series of acquisitions and mergers in similar market segments is a testimony to the fact that many organizations aim to create a monopoly in the market either by buying them out or owning their technology to move forward faster.

Different Approaches to Competitor Analysis
There are several approaches to performing competitor analysis. I have listed a few I have personally explored and found it successful in communicating apt feedback to stakeholders

  Star Ratings based
       Features/Scenarios can be rated by giving star ratings – single star meaning poor
       and five stars meaning outstanding

       Points based
       Features/Scenarios can be rated using a points system of 1 to 5 per feature or scenario
      Subjective feedback
      Some stakeholders prefer detailed subjective feedback as it’s easy to understand
      underlying analysis using this feedback instead of using symbols/numbers i.e., stars and points

Implementation Example
Consider a simple example of performing competitor analysis of Flipkart.com website with Amazon. In using a mix of approaches (2) and (3) listed above. One can start with identifying the purpose for this exercise. For the benefit of this article, let’s say the purpose is to "Identify features where flipkart.com lags behind amazon.in"

To accomplish this, make a list of all features available on both websites. Analyze every feature in detail on both websites and associate a rating to it. You can also provide subjective feedback explaining which feature is better and/or why you think that feature is better.

At the end of the exercise, this is how the competitor analysis document snippet looks like.

In some cases, you can also make a list of different tasks and measure their efficiency using metrics like ‘success of getting task done’, ‘time taken to complete the task’, ‘customer satisfaction level’ and so forth.

Customer Touch points testing is one metric to capture for main product and the competitor product. This helps analyze how the organization handles user complaints, escalations or queries. Media like call, email, chat, service requests, feedback and recommendation tools and so forth.

Once this activity is done for all features, an overall rating can be arrived at as shown below.

Additionally, we can provide a summary report of our findings and elaborate on Product Stickiness.

Competitor analysis should be initiated with a well defined objective. Once it is complete, respective stakeholders must work towards fixing the gaps identified and contribute towards 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 professional organizations which do a great job of performing such analysis, which comes at a high cost, yet valuable enough. Which method one chooses is less important over what will be done with the results in the end. In my experience, few organizations invested lot of time and performed competitor analysis, only to pack those results and trash them in the most safest product file. If you want to perform this analysis, be sure and be serious.

To summarize, anyone can learn to do competitor analysis in simple steps mentioned above and evolve it over a period of time. The results can be shared with appropriate stakeholders about the pros and cons in the product at hand and make suitable improvements in subsequent releases.



  1. In my practice so far, I have not seen an analysis happening for the competitor's especially when in comes to context of product being tested and the competitor's product. I see the data being collected on a available subjective and adjective basis. This is data but can be an information that's the question.

    What is done using this data? A report is formulated saying this is your product and the other competitor's product. Here you stand from this data. But the information still goes uncovered. This thought keep hitting me when I hear this word "Competitor Analysis" from testers and from my programmer friends.

    For example, a 5 star rated app by 10000 user can still be generating low revenue or stakes while the app which has gained lot of critics. Like a hotel in streets of Bengaluru which will be filled with people (morning, noon & evening) when compared to other restaurants who also serve food. Where is the value here? What analysis should each of these competitors want to make now? When judging the quality is difficult, the brand name come into picture.

    But most of the analysis or analysis report I have seen, has failed and don't realize to build information which has DECISION MAKING PATTERN BY CUSTOMER/USER. Without this it is not a Competitor Analysis report. Recently, I was having a talk with one of the senior management people in visualizing the problems in a product and the fix that was coming in. Obviously the competitor's were in picture. But I had one question for them and me and everyone out there see in discussion -- "What is decision making pattern you are going to change with this?" I wanted to forget the technical stuffs, design stuffs, experience stuffs and opinions, for a while but wanted to know how all this influences one to go with the product. Since, because, I have refactored my code to be fast enough than before it does not mean, I make better leap in market; because I listen to customer now, I make a jump leap in the growth. This is missing in the reports and in education to testers and any others who works on this aspect. Another relative example to see this, I want to buy a headphone; which one will I buy now? I want to carry my headphone wherever I go, which one will I pick now? I want to buy a headphone that suits to money in my pocket and for the stuffs & environment I will be into, which one will I buy now? The decision making pattern goes missing. Off late, I hear this is stuff of sales & marketing team, they will do it and not the engineering team. If the design is not good enough to influence the decision making and identification of that pattern, I feel there is a gap in the engineering. The same I see in the Competitor Analysis report that goes out from testing teams, because the testing team (including me) will be very biased in looking at the stuffs doing this task and so the companies are.

    I learn, doing the analysis report in the space of engineering is not a straight task. It is beyond the SWOT and listening to users for their ratings, words or experience. I wished sharing this little info.

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