Competitive Analysis for Product Managers and Business Analysts

Table of Contents

In Brief

Competitive analysis is a major component of any strategic endeavor. This is especially true for tech business owners, product managers and business analysts.

This post depicts major business models helping to sketch insightful competitive analysis.

Two main perspectives correspond to the different business models:

The Business perspective
- Competitor analysis template
- Competitor Profile
- Competitor scorecard
- Competitor overview
- SWOT analysis
- Product lifecycle
- Competitor classification
- Competitor profiling
The operational perspective
- Capability Analysis
- Feature Analysis
- Imitability Ladder
- Competitive Differentiation Analysis

Introduction to Competitive Analysis for Product Managers and Business Analysts

Strategy and market research or market intelligence are very tied notions. This is particularly true for Product Managers. Indeed, a Product Manager is defined as the CEO of his product. Being a CEO implies being aware of all the ecosystem that is surrounding the product in question. This is key for making the right decisions and sketching the right business strategy.

In order to be aware of the surrounding ecosystem, and in order to have all the needed elements for taking the right strategic decisions, a Product Manager should master a highly valuable weapon, that is the ability to perform insightful market research.

Market Research is a broad discipline. Market research can provide various types of information. One can cite for instance: Market size and trend, competitive landscape, customer segmentation, pricing research, brand image and loyalty research etc.

In this post, the main focus is the competitive analysis research for Product Managers.

This type of market intelligence is key for Product Managers. Indeed, it determines numerous strategic decisions like: What is our main differentiator, what are the weaknesses of the competitors that we have to communicate on, what are the major future trends that our competitors are following and what corresponding actions should we take.

Competitive research is also a vital tool for being able to evolve among a Blue Ocean Ecosystem. In other words, this kind of research makes it very clear where to invest for innovation in order to craft very targeted products for very targeted customers that are not served well enough yet by the current market.

Business models and tools for performing Competitive Analysis for Product Managers and Business Analysts

In order to make a Competitive Analysis for Product Managers and Business Analysts, numerous tools and business models can be used. These tools correspond to 2 major groups depending on the perspective, the business and the operational perspectives:

Business perspective

The business perspective for sketching the Competitive Analysis for Product Managers and Business Analysts aims at having the big picture around the main competitors. In this framework, the focus is the team, the price, the perceived value, the brand image etc.

In this section, let’s list and explain the following business models and tools:

Competitor analysis template
Competitor Profile
Competitor scorecard
Competitor overview
SWOT analysis
Product lifecycle
Competitor classification
Competitor profiling

Let’s now take them one by one:

Competitor Analysis Templates

The Competitor Analysis Templates contains 2 axes: The Price and the Benefits. It may be counterintuitive but a product that is cheap should be put on the “High” side of the Price axis since it’s “Highly” competitive from this perspective. Obviously, an expensive product should be put on the “Low” side of the Price axis.

This model aims at: First placing the competitors following these 2 criteria, then placing your own product according to these same criteria in order to situate it with respect to its competitive landscape.

This visualization is very helpful strategically since it allows you to identify major differentiators of your product in just one glance. Once placed, your competitors can be then classified in 4 major groups depending on where they stand in the chat.

The most serious competitors are the “Leaders” that offer the best products at the best prices. You have to tend to be among this group. If not, you have to prepare a clear strategy to differentiate yourself from the offer of this strong class.

The least dangerous category of your competitors is the “Laggards”. This category corresponds to the providers of the least performant product yet the most expensive one. Better not to belong to this group and beating this category of your competitors is quite easy. Suffice to outline their weaknesses and oppose them to your strengths.

In the middle comes the 2 categories of the “Challengers” and the “Contenders”. The “Challengers” are low quality products that are cheap. The contenders are high quality products that are expensive. It’s not obvious to state what is the most dangerous category among these two to your product. It will depend mainly on your product positioning.

Competitor Profile Card

The Competitor Profile Card aims at presenting in a single card the main information about a given competitor. This analysis is generally performed at more advanced stages when the main competitors are already defined. It aims indeed at gathering deeper insights about the most threatening players.

The information contained in the competitor profile card corresponds to 4 categories:

Meta-data about the company: Date of founding, location, website
Intangible data: Mission, vision, objectives and brand image
Tangible data: Pricing book, customers, market share, founders, human resources
Latest news and updates

Competitor Scorecard

The Competitor Scorecard is similar to the Competitor Profile Card excepting that it’s meant to be more quantitative, and it encompasses in one single document a direct comparison between your product and the competitors’ products.

This comparison is performed from various perspectives like the Market awareness, founding team, customer experience, product quality and product technology. Different weights can be assigned to the different criteria to take into account the subjective prioritization of the analyzer.

Competitor Overview

The Competitor Overview is very similar to the Competitor scorecard with a major difference that it’s focused on a comparison of the companies whereas the Competitor Scorecard is focused on comparing the products.

The Competitor Overview compares directly your company against the companies of the competitors according to business criteria like: The company meta-data eg the website, the location, the number of employees etc. The Product portfolio aspect like the major features of the subsequent products and their market share. In addition to the marketing aspect like the brand image of the company.

SWOT Analysis

The SWOT analysis is a famous business analysis model among the tollset of Competitive Analysis for Product Managers and Business Analysts. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is generally made for a given company at a time. A SWOT analysis aims at defining attack strategies leveraging the Strengths and the Opportunities, defence strategies around the Weaknesses and Threats.

Here are practical examples of Strengths, Weaknesses, Opportunities and Threats that can help you filling out your SWOT analysis:

Examples of Strengths
- Brand awareness
- Expertise or experience
- IP or Intellectual Property
- Customer loyalty
- Founding team and human resources
- Unique value proposition or strategic differentiators
Examples of Weaknesses
- Employee turnover
- Outdated processes
- Lack of expertise or experience
- Shortage in resources
- Obsolete product portfolio
- Small market share
Examples of Opportunities
- increasing needs covers by the offered product
- Networking expansion
- New sales and marketing channels
- New markets
- New partnerships and acquisition
Examples of Threats
- High competition
- Political and international events
- Pandemics
- New legal rules
- Global and local economic crisis

Product lifecycle:

Product lifecycle is an analysis of the typical stages that any product goes through during its lifetime. Keeping in mind those stages makes it simpler to define a roadmap and to prepare adapted offensive and defensive business strategies depending on where the product is situated.

The 4 major stages of a product life cycle are: Introduction, Growth, Maturity and Decline. This analysis should be performed not only to your product but also to the products of your competitors. This helps in taking the right decisions regarding the product roadmap and the communication strategies regarding your product.

Depending on where the product stands, the actions required from the different business components will be very different.

For instance, at the introduction stage, market research is crucial for identifying the surrounding landscape, hence sketching a first consistent picture about the roadmap.

At the growth stage, the marketing effort is key for creating awareness and gathering vital feedback from the customers. This marketing effort should even start at the introduction stage.

At the maturity stage, the product development team and the customer service team play a key role for attending the highest levels of customer satisfaction.

At the decline phase, strategies and action should be identified in order to renew the offer and get back again to the introduction stage of the next generation of the product.

Competitors Classification:

When conducting a Competitive Analysis for Product Managers and Business Analysts, Competitors may be classified according to numerous criteria as seen previously. With the Competitor Classification schema, the classification criteria aim at expanding the competitive landscape to take into account even the players that do not seem to be competitors at the first glance.

Indeed, in this framework all the players that may take market share from you or any product that can be used instead of yours is considered as a competitor and put in a given category.

Let’s take the example of a baker. A direct competitor of the baker is another baker of the same area. An indirect competitor of this baker is the supermarket that offers ready to be baked break. A potential competitor is the Pizza restaurant that may one day propose bread to the customers that usually purchase their bread from you. Finally, a substitute to this baker is the floor and yeast provider that equips the customers of the baker with all what they need in order to make their own bread at home.

Consequently, the Competitor Classification schema proposes 4 major categories of competitors:

Direct competitors: With these ones you have to make sure that you have a clear differentiating value proposition against them
Indirect competitors: You have to make sure to not lose many customers because of them
Potential competitors: You have to make sure that you are setting a high barrier to entry for them
The Substitutes: You have to make sure that you are offering a much better product than they do

Operational perspective

The Operational Perspective of the Competitive Analysis for Product Managers and Business Analysts aims at focusing on the product itself and comparing it to the competitors’ offering. In this framework, the following frameworks are listed and explained:

Capability Analysis
Feature Analysis
Imitability Ladder
Competitive Differentiation Analysis

Capability Analysis

The Capability Analysis compares frontally the major features of your product against those of your competitors. The assessment is performed through 4 categories of capabilities: The unique capabilities, the best capabilities, the same capabilities and the poor capabilities.

Then, once the capabilities are compared according to these dimensions, each capability is assessed from the point of view of its importance in the eyes of the customers. This way, the perceived value of your solution is assessed quantitatively then compared directly against the perceived value of your competitors.

Feature Analysis

Feature Analysis is similar to Capability Analysis in the sense that it compares frontally your product to your competitors’ one. The main difference is that Feature analysis is highly focused on the features of the product without pre-categorize them.

This analysis model assesses the features in a quantitative and visual way. Generally, the Feature Analysis framework precedes the Capability Analysis one since it presents the features in a less categorized and more raw way.

Imitability Ladder

The Imitability Ladder aims at assessing objectively the barrier to entry of the competition with respect to the different features and capabilities that your product is offering.

The Imitability Ladder classifies the different features of the product according to 4 groups:

Cannot be imitated: This corresponds to the major strengths of your product, your absolute life insurance in the market. This may correspond to a historical advantage like being the first in the market, a unique location or a unique physical asset for example.
Difficult to imitate: These are also very important assets to your business but that can be copied one day. Examples of these assets are: Company culture, customer loyalty or brand image.
Can be imitated at a cost: This can be for instance your skilled human resources or the quality of your product.
Easy to imitate: This is a major leak to your business that should be cured ASAP. Examples of this are unskilled workforce or bad quality products.

Competitive Differentiation Analysis

A key notion when it comes to strategic planning is “Differentiation”. It’s vital to define and know your real differentiator in the market because this is what will determine the efficiency of your marketing communication and the depth of your product identity in the market.

Competitive Differentiation Analysis focuses exclusively on determining clearly the differentiation of your offer at its different levels. Particularly, the differentiation is assessed for those 4 categories of your product:

The basic offer: The benefits provided by your core product
The expected offer: The benefits as seen by your customers
The augmented offer: The additional benefits offered by your more premium version of your core product
The potential offer: The benefits offered by your upcoming features to be deployed in the future