Competitive Analysis Benchmark Report

Introduction

One of the most important determinants of product success is the degree to which your product is different
or better than the competitor’s product. However, during our workshops, we invariably ask the following
questions:

1) Who are your competitors?

2) Which products do you compete with?
3) How do you go about comparing your products with your competitor’s products?
4) What are the strengths and weaknesses of the competitor’s product?
5) Are they making money?
6) What share of the market do they have?

You can come up with a long list of questions to ask. The challenge is whether or not you can answer the
questions. Do you have the competitive intelligence you need to get your job done, or do you have to do
all of the competitive data gathering and analysis yourself?

We Wanted to Learn More

We decided that we wanted to learn about the current state of competitive analysis, so we posted a survey
to our website and collected responses from November, 2007 until February, 2008. 235 people
responded to the survey roughly broken down by industry type: 12% from technology companies, 47%
from industrial and manufacturing companies, 9% from medical products/healthcare, 14% from consumer
products, 18% from services-based companies.

What We Found Out

One of the most remarkable findings was that only 21% of the respondents said there was a formal
competitive intelligence (CI) group in their company. This is difficult to comprehend. Other benchmarks
we’ve carried out over the years revealed much higher numbers. Does this mean that companies are
cutting back on research? Is it there a conflicting message from companies who assert they’re ‘market-
focused’ but are not investing in one of the most important research areas?

One could be disappointed in taking a glimpse at this situation and see that individual contributors don’t
have the benefit of a strong industry and competitive intelligence research organization to support them. In
many companies, there are indeed corporate functions that do some of this work in support of corporate
marketing planning. However, at the product or product line level, there is little support. On the other
hand, we do believe that product managers should be able to continually carry out product-level
competitive analysis. For example, we recently asked a group of participants in a workshop if they had

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their competitor’s products in their labs. They said they did not because there was no budget for this type
of expenditure. You can only imagine how we responded.

Further to this, we wanted to know if the respondents’ company had some type of industry and competitive
data repository or archive, either physical or online. Surprisingly, 67% said no. We asked if there was a
standardized competitor profile document or template available so that everyone carrying out competitive
research could be guided to find similar competitor characteristics. 59% said no. Then, when we asked if
it would be helpful in guiding your competitive analysis, to have a standard guideline or template, and 94%
said yes. Our recommendation would be for you and your colleagues to collaborate on the creation of a
standard template to guide your work in this vital area.

We also wanted to find out how often product managers were scanning the competitive horizon. 21% said
they scanned daily, 15% said they scanned 2-3 times per week, and 64% said they scan a couple of times
a month. Needless to say, we’re all busy. It may not be feasible to just scan trade publications and
competitor websites. 2-3 times per week is probably a good target. 41% of you said that you spend an
hour our less during each scanning session and 24% said they spent 1-2 hours. We like the 35% of
respondents who spend more than 2 hours at a time when carrying out competitive analysis activities.

Since product level competitive analysis is so important to product managers and their teams, we wanted
to see if you agreed – and you did – with 76% agreeing. However, less than 50% said that they were
doing a good job at this. Hand in hand with this, we wanted to know if you knew how each competitor’s
products were positioned. About half said you did and half said you didn’t.

In the next section of the survey, we wanted to learn about what was understood about the other marketing
mix elements of the competitor’s products, including pricing strategies, promotional activities, and
distribution channels. About 70% of the respondents believe that it’s important to know this. However,
when we asked how well you were doing at this, less than 50% said they were doing a good job at these
types of analyses. What this tells us is that while there is a belief that various competitive analysis
dimensions are perceived as very important, many people could use some help. We surmise that there
may be know-how issues, time issues, and data-availability problems.

One of the other questions we thought might be important focused on the segmentation models of your
competitors. Since more than 70% of you thought that it is very important to know these segmentation
models, only about 25% of you said you really understood the market segments that they were pursuing.
This is of particular concern to us because if a company is competing for similar customer types, it would
seem that all competitors would have a good sense of their customer constituencies.

In the last part of the survey, we asked people the kinds of things they would like to know more about in
relation to their competitors. Here are some of the ones described most frequently:

» Their marketing strategies

» Competitor pricing
» Competitor terms and conditions (in sales contracts)
» Market share
» R&D investment in products

Although most people thought these five items are most important, the main barriers to securing the most
complete data rests with time. 44% of respondents say they just have no time to do this work, 24% said
that there are no human resources available, 23% said that the people assigned to the tasks were
ineffective or that there were other barriers.

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Summary

These informal surveys, coupled with what we learn in our learning laboratories (our workshops), open
windows into ‘what’s happening’ with product managers and marketers in many companies, across an
array of industries. What we understand is that everyone is very busy. Resources that product managers
and marketers would like to count on to help in gathering and analyzing competitive data are in short
supply. When faced with these challenges, we need strategies to get the data and apply what we learn in
figuring out how to beat the competition. To this end, here are a couple of ideas for you to consider
adopting to make progress in becoming more competitive:

1) Create a profile for each competitor.

2) Pick apart each competitor’s product (tangible or intangible), feature by feature. Work on one
product each quarter. In a year, you’ll have four. Get team members involved so that everyone
knows what you’re up against.
3) Write a positioning statement for each competitor’s product – compare it to your own.
4) Take pictures of your competitor’s products. Show them side by side with yours. How does your
design or layout stack up?
5) Review each competitor’s website once a month to make sure you’re aware of any changes.
6) If you have a monthly product review meeting with your core team, ask each person to be
prepared to talk about something related to the competition. You’ll be surprised how this gets all
team members in talking about competitors – and about possible changes to your competitive
strategy.

This article is provided by Sequent Learning Networks in the interest of product management professional development. Visit
www.sequentlearning.com or call 212-647-9100 to learn more.

© 2008 Sequent Learning Networks

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