How should product managers research competitors?

Competition is healthy. It motivates you to constantly find new ways to differentiate, meet customer needs, and ultimately deliver a better product. This is why the best product managers know how to effectively research and evaluate competitors.

Competitive research is the process of assessing the strengths and weaknesses of companies offering products similar to yours. Doing this type of analysis gives you a strong understanding of how your product is different from others on the market. And it can help you confirm the unique value that you provide. It is a key step in the strategic planning process. You need to know where you fit in and what opportunities exist before you can set goals and prioritize what to build next.

Competitive research can help answer these core questions:

  • "Are there other companies doing exactly what I (want to) do?"

  • "Are my potential customers getting a product or service at the level that they want or need?"

Thorough competitive analysis requires researching both direct and indirect competitors and digging into important aspects of their businesses — such as vision and positioning — as well as identifying strengths and weaknesses.

Direct vs. indirect competitors

Product managers should begin by identifying who and what your product is up against in the market. This gives you a strong understanding of how unique your offering truly is. First, you will want to document both direct and indirect competitors.

A direct competitor is a company that offers (more or less) the same good or service within the same market. Coke and Pepsi are direct competitors with each other. An indirect competitor is a company that offers a different type of product to serve the same need. For example, sparkling water is an indirect competitor to both Coke and Pepsi.

Evaluating both direct and indirect competitors is a valuable exercise. Understanding the strengths and weaknesses of your direct competitors can help you discover opportunities where you can stand out and gain a market advantage. And knowing how your potential customers are using indirect competitors indicates that there is a problem you could potentially solve more effectively.

How should I research competitors?

Once you have identified your direct and indirect competitors, you can start gathering key information about each one. You can find this information on company websites, third-party review sites, social media, and within industry news coverage.

Market

First, define the market landscape. A thorough market analysis confirms customer needs, industry changes, and fiscal opportunity. Acting on your competitive research requires a deeper understanding of where you fit within the broader market you share with them. Questions to answer:

  • Who is your ideal customer?

  • What is the size of the market of ideal customers?

  • How has this market changed in recent years and where is it headed?

Vision

Identify each competitor's vision — where they are headed and what they aim to achieve in the market. Most companies offer this information in some form on their website. When reviewing, assess how they present themselves to both customers and prospects. Questions to answer:

  • Why do these products exist?

  • Which problems do they aim to solve?

  • Are there any problems that these products do not seem to solve?

Positioning

Assess where your competitors see themselves within the shared market. The best place to find this information is in your competitors' marketing messages — anything on their own websites as well as external sites such as social media networks or industry news outlets. Questions to answer:

  • How do your competitors market their products?

  • What language do they use to describe what they offer in market?

  • Which core problems do they believe they solve?

Personas

Learn who your competitors' products are built for. While researching competitors and using their products, try to envision their user personas — the profile of their ideal customer. And revisit customer reviews to look for patterns. Questions to answer:

  • What are the job titles of competitors' typical customers?

  • What industry do target customers work in?

  • What are their target customer's skills and interests?

  • How do their personas differ from yours?

Differentiators

Determine what distinguishes each competitor's product from yours and the rest on the market. When doing your research, focus on the factors that are most important to your customers, such as customer service, integrations, and price. Questions to answer:

  • What are the product's key benefits?

  • Is the look and feel of this product superior to mine and others on the market?

  • Is the price lower or higher than the rest of the competition?

  • Does the product work better than the rest?

  • Does the company offer superior customer service?

Strengths

Aim to understand what drives your competitors to do what they do and where their products stand out. Take your competitors' product tours or even sign up for a free trial to understand all aspects of their offerings. Also look up the companies' founders on LinkedIn — many products are built out of deep, personal passion. Questions to answer:

  • What does the competition excel at?

  • What do they do better than you?

  • What unique insight and experience do the company's founders offer?

Weaknesses

You can also spot weaknesses in product tours or while experimenting in a free trial. You can gain the customer perspective by searching relevant online forums for reviews and insights on these products. Quora, Product Hunt, and LinkedIn are three potential platforms that offer unbiased opinions on what customers and prospects think. Questions to answer:

  • What do competitors' users struggle with?

  • Which aspects of these products are lacking?

  • What customer needs are these products failing to meet?

Document your findings in a central location that your team can access. Excel spreadsheets or PowerPoint documents are a good start. But many product teams also use tools like Aha! Roadmaps to document competitive research as a part of strategic product planning. This ensures that your research informs your goals, initiatives, and tactical work.

While competitive analysis is a key component of any good product strategy, it is important that you treat it as just a guideline. You should never make decisions about your product based solely on a desire to get ahead of your competitors. Instead, use your research alongside what you know is best for your customers and company to inform your decisions.

Product management dictionary
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