The Art Of Competitor Research
What is Competitor Research
Competitor research involves analysing key market players to understand their products, propositions & strategies. Effective competitor research enables businesses to build strategies that avoid disruption, beat the competition, identify unmet innovation opportunities and better service customer needs to ultimately win in their market.
Dispelling Myths
There are some common misconceptions of the value of competitor research:
1. “You should focus on your users, not your competitors”
2. “If you only focused on your competitors no innovation would ever happen”
A quick rebuttal to these before we continue…
1. “You should focus on your users, not your competitors”
There is no doubt that focusing on your users is critical to adopting and retaining users of your product. If you’re not solving a real customer problem, no one is going to use your product, but critically if you’re not solving that problem in a better or cheaper way than their current provider then users aren’t going to adopt your product. Competitor research ensures you are “solving the problem in a better or cheaper way”.
Furthermore, there is very little “pure innovation” in the world nowadays and very often, someone, somewhere has already solved the problem you are exploring. One of the many use cases for competitor research is that it can help identify how others have solved similar problems and inspire teams to create products and design services.
2. “If you only focused on your competitors no innovation would ever happen”
The famous quote that resonates with this point is from Henry Ford, “If I had asked people what they wanted, they would have said faster horses”. Ford is completely right and this forward thinking innovation has created some of the household names we know today that have created clear unique product innovations; Tesla, Google, Apple, Facebook to name a few.
Here, we must note that effective competitor research looks outside of just products and services and into the underlying needs of competitors and wider market users. If you can spot where your competitors' users struggle then this presents both an opportunity to beat your competitor and potentially to create completely innovative products and services. In the Ford Motor Company example, a focus on the underlying need of ‘getting from A to B faster and more comfortably’ helped provide this innovation opportunity.
There is also an underlying theme in these responses that competitor research is only one data point and input into the wider strategies required to build successful businesses. Be sure to leverage multiple data sources & tools before building a business strategy.
The value of good competitor research
Conducting effective competitor analysis is critical to building and maintaining successful businesses. Overall the value lies in 4 key areas:
Spot gaps - Identify unmet needs in the market and spot innovation opportunities in the fast evolving world.
Avoid disruption - Identify competitor strategies to avoid disruption, maintaining and growing competitive advantage over time.
Inspire solutions - Inspire designs and overcome business challenges by learning lessons and adapting from the best-in-class solutions across the industry
Tailor messaging - Create marketing & sales content based on the wider market influences and situation to differentiate your product