Rethinking Competitive Product Analysis

Rethinking Competitive Product Analysis: Why Feature Comparison Isn’t Enough

Initial Draft of Post

Many product managers fall into the trap of comparing features when analyzing the competition. But focusing solely on features misses the point. True competitive advantage lies in understanding and meeting customer needs better than anyone else.

In this post, we’ll explore a powerful framework for doing just that. This approach, which we call competitive product analysis, is an internal process that focuses on how well a product meets customer needs, moving beyond simple feature checklists. This is different from general competitive analysis which looks at market share, branding and other aspects.

The Problem with Feature-Based Comparisons

We’ve all seen those comparison charts: your product versus the competition, a long list of features, with check marks and X’s. Often, these grids are designed to highlight your product’s strengths and downplay its weaknesses. They often focus on what you think is important, not what your customers actually care about. For example, highlighting a new feature might be interesting during a demo, but it’s useless if that feature does not solve any real customer problem. Comparing the technology your product is built on or the amount of data it can store may be irrelevant to your customers’ needs.

Introducing Competitive Product Analysis

Competitive product analysis is a focused approach that looks at how well a product meets customer needs. This process is primarily internal and should be objective and comprehensive. It helps you understand how your product stacks up against the competition, not just in terms of features, but in terms of capabilities that address specific customer needs.

The Four Pillars of Competitive Product Analysis

When conducting a competitive product analysis, make sure to capture these four elements:

• Need: What is the desired outcome that provides business value for a specific persona? This is about the “why” behind what the customer wants to achieve. Needs will vary from persona to persona. For example, instead of a need being “I want to upload a file” a better approach is “I want to make sure that my employees can access information when they’re outside of the office”.

• Capability: What does your product need to do (in non-technical terms) to allow that need to be met? This goes beyond specific features and looks at the essential functionalities. A capability is different from a feature. For example, a capability could be the ability to get data out of a system, while the features are the different ways that can be accomplished, such as PDF exporting, XML exporting, API.

• Evaluation: How does your product compare to competitors on each capability? Use an objective and consistent scale like “High,” “Medium,” and “Low,” or a numerical scale or other consistent way to evaluate the competition. This consistent scale is important to evaluate competitors fairly.

• Commentary: Provide context and explanation beyond just the evaluation. This section offers insights into what a competitor does or what your product needs to include to close any competitive gaps. This information is valuable for making decisions about your product roadmap, or for resource allocation.

Example: Project Management Software

Let’s imagine you are a product manager for a project management software company that we will call “ProjectWise,” and you want to improve the product to better serve remote teams. You have two main competitors, “Competitor X” and “Competitor Y.” Here’s how a competitive product analysis could look:

• Need: A project manager (persona) needs to ensure that their team can access project information regardless of their location.

  • Capability: Off-network access.

  • Evaluation: ProjectWise has high capability, competitor X has high capability, and competitor Y has medium capability.

  • Commentary: Competitor Y requires users to log into the application from the office every week, hindering remote use.

• Need: Team members need to easily communicate and collaborate on project tasks.

  • Capability: Mobile capabilities.

  • Evaluation: ProjectWise has iPhone support, Competitor X has iPhone and Android support, and Competitor Y has only iPhone support.

  • Commentary: While iPhone support covers most use cases, Competitor X also supports Android which may be an issue for certain users.

By focusing on the capabilities and how they meet the needs of the customer, this analysis goes beyond feature comparison, and uncovers key areas where the product can be improved.

Common Mistakes to Avoid

When gathering information, avoid these common pitfalls:

• Starting with easy sources: Don’t just rely on your competitors’ websites or search engines. Explore a wide range of sources.

• Relying solely on digital resources: The most useful information can be obtained by going to events, talking to customers, and doing interviews.

• Taking information at face value: Consider the source’s bias. Be objective and evaluate all information based on the source and other criteria.

When assessing the gathered information, don’t:

• Skip the analysis: Don’t react to information without thoroughly analyzing it.

• Focus only on product feature comparison: Instead focus on customer needs.

When you have completed the assessment of your product, keep in mind:

• Avoid analysis paralysis: Set deadlines and make decisions instead of getting stuck in data. The goal is to take action based on the analysis.

• Don’t limit your insights to product features: Competitive analysis can improve sales, marketing, and positioning.

How to Get Started

You can start doing competitive product analysis right away by creating a simple spreadsheet with the four pillars, and filling it with information gathered from research. You can then use this information to prioritize features and make informed decisions about the product roadmap.

Conclusion

Competitive product analysis is more than just comparing features. It’s about understanding customer needs and assessing how well your product meets those needs compared to the competition. By focusing on capabilities and outcomes, you can gain a significant competitive advantage and create products that truly resonate with your target audience. This type of analysis helps to prioritize features, and make more informed decisions based on customer needs