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Benchmarking & Competitive analysis

Yaroslav Zhmikhov
Yaroslav Zhmikhov
October 26, 2021 3 min read 1124 views
October 26, 2021 3 min read 1124 views
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Stage 1: Business Research

Benchmarking & Competitive analysis

A process to help you find and evaluate direct and indirect competitors to gain a complete understanding of their strengths and weaknesses, which will help you gain a competitive advantage over them.

Stage 1: Business Research

Examples: Competitive analysis

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A process to help you find and evaluate direct and indirect competitors to gain a complete understanding of their strengths and weaknesses, which will help you gain a competitive advantage over them.

Benchmarking or comparison of indicators is the process of finding a standard or reference (best) solution to compare with a future or existing product.

Benchmarking is of 2 types:

  • Internal benchmarking. For example, this is when you compare your product characteristics with indicators for the past period or target (desirable) metrics.

Use the following methods: digital analytics, SWOT analysis, and process mapping.

  • External benchmarking. If very briefly, then this is the collection of various data from other products (companies). It is this type that we will consider in this article.

Competitors are usually divided into 3 main groups: direct, indirect, and potential competitors:

  • Primary (direct competitors) are companies that offer the same or similar products or services to the same consumer groups, such as iOS and Android (both products provide essentially the same services).
  • Secondary (indirect competitors) are companies that sell similar or different products to the same consumers, but differently (perhaps with less functionality), such as Meta Messenger and Slack (in both products, people can chat with each other).
  • Tertiary (replacement competitors) are companies that can expand their line of products, and services, or apply new technology to better satisfy their customers, and become your direct competitors in the future, such as DSLR cameras and iPhone (both are quality products for photo and video filming).

Competitive analysis is the identification of competitors and the evaluation of their strategies, which will allow you to determine the strengths and weaknesses in comparison with your product, service, or idea that has not yet been implemented.

To summarize, competitive analysis helps us understand:

  • What our competitors offer.
  • What is their monetization?
  • Strengths and weaknesses of the product. This will allow us to compare them with our capabilities.
  • Helps to identify types of customers and how those customers, who use competitors’ products, solve their problems.

The purpose of benchmarking

Find and implement the most effective practices, ideas, and trends that should bring your product into a more perfect form.

The purpose of competitive analysis

Increase product knowledge, soberly assess the strengths and weaknesses of competitors, identify threats, gaps in products or services, and generate new ideas, and find new business opportunities to gain a competitive advantage.

The value of benchmarking for a team

This method will help you find your competitors and then conduct a competitive analysis. You will also be able to collect trends (global, visual, and industry) which in turn will help the team imagine what the final product should be like.

The value of competitive analysis for the team

It will help you to see the following things:

  • What services do your competitors provide?
  • What functionality do they use to solve the problems of their users
  • Evaluate this functionality using heuristics to see errors made and assess usability to design the best solution.

Recommendation: do not blindly copy all the decisions of your competitors, try to understand “Why did they do this?” For example, there are 2 seemingly identical products, but some solution works in one, and not in the other. Think about it.

The value of benchmarking for business

It will allow the business to understand how its product differs from the products of other companies.

The value of this method is not only that the business does not need to “reinvent the wheel”, but that if you carefully analyze the achievements and mistakes of other designers, you can develop or improve your bicycle that will ride the roads of your business as efficiently as possible.

The value of competitive analysis for business

A well-researched competitive analysis will help businesses understand what our competitors are offering and how we can create a better product in the marketplace with broader offerings that address a wider range of needs.

Duration:

  • Preparation: up to 30 minutes
  • Main activity: from 2 to 4 hours to evaluate each competitor

Creating process:

If you are very lucky, you can find ready-made “Preparatory & Secondary research (Desk research)”, I wrote about this before. The studies or reports you find may contain competitive analysis.

Recommendation: check the data you find, as it may not be professionally done or may not correspond to reality due to outdated data.

Step 1. Setting the goals and tasks of the project

You can’t just go ahead and do a competitive analysis.

Every study is done for a reason.

Ask yourself and the team:

  • Why do you need to conduct a competitive analysis?
  • What do you want to achieve and what do you want to get as a result of competitive analysis?

Summarize the tasks that the business sets before you.

Step 2. List your competitors

How to do it? Everything is very simple. At the “Preparatory & Secondary research (Desk research)” and “Kick-off meeting & Stakeholder interviews” stages, you must find competitors, and if you couldn’t do it yourself, then ask the stakeholders a question:

  • Who are your direct, indirect, and potential competitors?
  • Why do you think so? Explain your point of view.

Stakeholders are the main source of knowledge since most of them do a lot of market research before applying to the company.

If you are told that there are no competitors, then this is not entirely true. There are always competitors, perhaps the stakeholders simply do not know about them.

If for some reason you have not found out about your competitors, and you can no longer do it, for example, a client has set a task for you, and will not be available for communication within the next 2 weeks, then you need to:

  • Prepare a list of keywords for search queries related to the industry you want to analyze.
  • Google.com is the first starting point. All searches must be done in “incognito mode” so that the search engine does not take into account your previous searches. Also, check the promotional search results.

Recommendation: Use Google Advanced Search.

  • Also, use such excellent services for finding competitors as Similarweb, Crunchbase, Trustpilot, etc., and for mobile applications, use Google Play and Apple Store.

Recommendation: analyze the reviews of the found competitors.

Step 3. Create a table, start analyzing features and recording data

If you need to analyze only the user registration process, then the table will not have the same structure as the analysis of the full product with all its sections, etc.

A feature is a special function, an unusual property, a “chip”, that is, something that is of value to the user.

Everything that you will analyze and record in the table depends only on your goals and tasks. Unfortunately, there is no universal method.

For example, in addition to analyzing features and product sections, you can also evaluate usability using Jacob Nielsen’s heuristics.

 
 

 

 

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