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Competitor analysis

Summary

Competitor analysis identifies the strengths and weaknesses of competing products or services before starting work on prototypes. A 10 minute tour of each of 4 to 10 of the most popular competing products showing how typical tasks are achieved is presented to a half day meeting of stakeholders. The competitive advantages of each product are discussed, and a short summary of the market position is generated at the end of the meeting. Alternative methods are market surveys or lab tests of competitor products

Benefits

  • To discover the strengths and weaknesses of competing products or services,
  • to develop a list of issues that need to be addressed in order to compete effectively
  • to gain consensus among a group of project stakeholders.

This method may also result in a list of desirable features that the new product could include.

Method

Planning

The main objective of the planning phase is to obtain access to four to ten competitor products.

The first question is always: what is a competitor? A context of use analysis of the intended product is important as it will identify the users, the tasks, and the context in which the product is planned to be used. A product is a way of satisfying a user need. A fundamental mistake in competitor analysis is to focus on the enabling technology and not on the user need to be serviced. What products or services are already on the market which satisfy the user need you are interested in?

If you are dealing with web-based products or products advertised on the web then a useful methodology is as follows:

  • obtain a set of keywords which describe the service you intend to offer
  • search the web using at least ten different search engines with this set of keywords
  • make a list of the top ten sites from the results of the different search engines

If your results are too diffuse (i.e., there are no clear winners) then your set of terms is most probably too vague. If your results are too clear cut (i.e., all the search engines agree) then your set of terms is most probably too conventional.

This method is useful for identifying not only web based but also desktop products. However, using it for identifying desktop products only results in a list of products; using it for websites results in a list of URLs (some of which may require registering to access).

If the products cannot be identified on the web then you must use conventional search and current awareness techniques to identify the competitors: look in the latest trade magazines for instance.

It is also useful to ask domain experts or the marketing department to review the list of competitor products to ensure that the most important competitors are represented.

This stage ends when you have acquired access to the most popular competitor products (i.e. if they are software you have to purchase them and possibly also get licenses; if they are web sites you may need passwords for some of them.)

Running a competitor analysis

Using this method, the set of stakeholders involved in the project are the basic expert panel. Their direct opinions on the strengths and weaknesses of the competitors are elicited during a meeting that should last half a day (3 hours maximum.)

In preparation for the meeting,

  • Establish a general set of actions you will do with each product or site, based on the context of use analysis.
  • Carry out these actions with each application. Deviations from the basic sequence will be inevitable as each application will have features that differentiate it.
  • Take frequent screen-shots as you go: doing even a well-rehearsed demonstration with a live product is time consuming and distracting. Clips of action sequences can be used but they often provide too much detail.
  • Insert your screen-shots into a presentation application such as PowerPoint.

Unless the applications are extremely large, each guided tour should not take more than 10 minutes.

You are now ready for the meeting. At the meeting, outline the methodology you have used, and show the presentations. If you have preferences for particular applications, make them explicit and explain why, so that the meeting can form their own opinions. After each presentation, guide the discussion as follows:

  • What is the unique selling point (competitive advantage) of this application?
  • What is done very well in the application?
  • What are the flaw(s) of the application, and why do they occur?

At the end of the presentations, encourage the meeting to go back and review the applications, in order to arrive at

  • A series of short statements characterising the competitive field.

It may be useful to look at applications of limited popularity at this stage to check that the assumptions generated about the most popular applications are correct, but this may take up too much time and the interest of the meeting may be lost.

Reporting

The basic minimum reporting is a

  • statement of the conclusions from the meeting

This should be circulated to all stakeholders and be made part of the project documentation. Depending on the level of formality required in your organisation, the following items may also be included as part of the reporting:

  • detailed minutes of meeting
  • transcript or summary of your presentation at the meeting
  • copy of your presentations.

More Information

Nielsen, J., and Mack, R.L. (Eds.), Usability Inspection Methods, John Wiley & Sons, New York, NY, 1994.

Alternative Methods

Problems of access to competitor products are usually the over-riding consideration in deciding how competitor analysis is carried out.

If you have access to marketing survey expertise, then a market survey involving questionnaires, interviews etc., is a good alternative method. The survey should seek to find out (a) what are the most popular products, (b) why are these products popular, and (c) what are the issues the popular products do not address.

If you have access to a sample of established users of a good representative range of competitor products, then a usability survey, including a standardised user satisfaction questionnaire, is recommended.

It is possible to do formal usability tests of competitor products that will also establish baseline usability requirements, but as this is resource intensive it is usually only possible to test a limited number of competitor products.

Next Steps

After a competitor analysis, the project should be able to move to requirements and prototyping activities.

Case studies

The development of the Usabilitynet site used a version of Competitor Analysis. The report and conclusions may be found offsitehere.PDF.

Background Reading

For information on marketing plans, see offsitehttp://www.marketitright.com






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