A competitor analysis is one of the essential activities you should undertake before launching a new product or business. At Brainmates, we follow a six-step process to evaluate the competition and use those insights to make informed product decisions.
Why Competitor Analysis Matters
As Product Managers, having a solid understanding of our competitors and their movements in the market empowers us to make better strategic choices. A well-executed competitor analysis helps us anticipate and respond to threats, identify opportunities, and ultimately deliver greater value to our customers.
Importantly, competitor analysis is not the same as a product comparison. While it may include references to product types, its purpose is to evaluate the strategic strengths and weaknesses of your rivals not to list out every product feature. Two different products can address the same customer need in different ways. That’s why this process is about understanding the broader competitive landscape.
Brainmates’ Six-Step Competitor Analysis Process
Step 1: Define Your Market
Start by clearly articulating the market you serve:
- Who are your current customers?
- What problem does your product solve for them?
Many products serve more than one segment, each with different needs and behaviours. Establish these segments early to understand which competitors are relevant to each. Consider both demographic and psychographic factors when defining your market. This will help you identify nuanced segments that may need to be targeted differently.
Step 2: Identify Your Direct Competitors
With your market segments defined, list your direct competitors. These are businesses offering similar products or services within the same geographic or digital footprint. For example, if you sell dog grooming kits, you’ll want to include other companies that sell similar kits in your region.
If the market is saturated, focus on the few competitors that pose the most significant threat. Also consider emerging players or adjacent offerings that could disrupt your market, just as Netflix did to Blockbuster, or Uber to traditional taxi services.
Step 3: Collect Competitor Intelligence
Begin your research using a range of reliable sources:
- Company websites, marketing materials, and annual reports
- Analyst reports and industry journals
- News articles and blog posts
- Feedback from your customers, sales team, or ex-employees
- Networking events, conferences, and trade shows
According to Hugh Davidson in Even More Offensive Marketing, competitor intelligence can be grouped into three categories:
- Recorded data: Published and readily available (e.g. annual reports)
- Observable data: Derived from observation and synthesis (e.g. pricing, campaigns)
- Opportunistic data: Gathered through conversations or informal channels (e.g. suppliers, customer reviews)
This categorisation helps validate your insights and weigh their reliability.
Step 4: Summarise Competitor Strategy and Positioning
Once you’ve gathered your data, organise it into a simple comparison table. Suggested headings include:
- Company name and description
- Product purpose and high-level functionality
- Price and pricing model
- Target market(s)
- Strengths and weaknesses
- Market strategy (e.g. price leader, niche player)
- Estimated market share
- Sales volume (if known)
- Threat level to your business
For added depth, consider creating a value curve model to visualise where competitors over- or under-deliver on key customer attributes. This can help highlight potential whitespace or opportunities to differentiate.
Step 5: Compare Competitors with Your Offering
Now it’s time to interpret the data. Ask yourself:
- What story is emerging?
- Where do we stand relative to our competitors?
- Are we ahead, on par, or lagging?
Compare this analysis to your product strategy and positioning. Use these insights to refine your roadmap, adjust messaging, or highlight competitive advantages. Sharing your findings with cross-functional teams, especially marketing, sales, and leadership, is key to driving alignment and action.
Step 6: Keep It Current
Markets evolve quickly. Review and update your competitor analysis every six months or more frequently if your industry is particularly dynamic. A current view of the competition provides valuable external context to inform both strategic planning and tactical decisions, such as feature prioritisation or go-to-market strategies.
However, a word of caution: don’t let competitor obsession distract from your primary goal of solving real customer problems. Competitor analysis should inform, not dictate, your product decisions.
Conclusion: Make Competitor Analysis a Strategic Habit
Competitor analysis isn’t a one-off exercise. It’s a critical discipline that supports long-term product success. By deeply understanding your market, keeping a close eye on industry players, and consistently evaluating your product’s position, you gain the strategic foresight to stay ahead.
But remember: your ultimate goal is not to chase competitors. It’s to lead your market by delivering meaningful value to your customers. Let competitor insights sharpen your thinking, not narrow your vision.
Whether you’re launching a new product or evolving an existing one, make competitor analysis a regular part of your product management rhythm and use it to inform bold, customer-centric decisions.
