Some more thoughts on competitive analysis here: http://www.brekiri.com/blog/?p=182.

Shuba: Not sure if this is helpful or not without knowing more about what your are actually doing, but try a more anthropological approach than what sounds like it may be more of a census taker’s approach. In other words, try to get in your target customers’ shoes by both observing how they address the problem(s) your trying to solve today and and asking broad, open-ended questions. There is a great post by Cindy Alvarez on this at: http://bit.ly/9BWVhk.

Once you’ve done this, brainstorm new ideas and concepts, prototype, test, refine, develop, deploy, rinse and repeat. Another good post on this phase is at: http://www.fictiv.net/process/.

Hope this is helpful.

Thank you!

I don’t think competitive analyses mean much but unfortunately a lot of people ask for them, right from potential investors to potential partners to potential employees. Generally it means that they have to justify their decision to a higher-up or get buy-in. It’s like that revenue plan. Most people should know they are subject to high rates of error, but ask for them anyway.

@Emmanuel – I confess to kitchen-sink charts myself

But to yours & Dave’s (& Scott’s) points – my grad school mentor liked to lay out what futurists call “cross-impact matrices” where you map product benefits against external environments… when it comes to the competitive landscape, you can see existing conditions… but it also lets you ask “OK, I can beat the competitors on *this* benefit but what if the world changes? Like if the competitors copy my move?”

Steve- thanks again for nudging us!

In your comment you made a point I can relate to very well. When looking at our feature set, it is really two distinct products combined. The first product is for the early adopters to get some traction. But for the real target mark we need to change our feature set even drop some features which are simply not fitted for a broader audience.

But on the other hand how else can you begin to understand the market? Though this is just one dimension, you need to start some place, the market is rife with uncertainty, what works for company A will not work for company B, it’s also hard to quantify fickle, which is what most customers really are.

In my experience doing user research (ie. actually getting out of the building and talking to people), I’ve found that one of the best ways to figure out how to differentiate from competitors is to watch people using your competitors’ products.

In general, it turns out that users are only using a fraction of the features being offered by competitors, and some of those features probably don’t work the way they want. Identifying and focusing on the few things that users actually need means releasing a much simpler and more intuitive product that only does what your customers want.

Even in the book Blue Ocean Strategy, the competitive analysis graphs were made only after the company had a firm grasp on what mattered to their customer. For instance, Southwest wanted to appeal to the low cost traveler and realized that this person doesn’t care about assigned seats or good meals. They just want cheap plane tickets.

I too have built several analysis tools and they always seemed to be an exercise in vanity.