Competitive analysis is a great way to determine, how much effort you will need to put into your venture to make it a success. Unfortunately enthusiastic entrepreneur often give it a short drift. Competitive analysis to me is the reason of your product’s success (or failure ) .
Competitive analysis needs to be built into product discovery. It need not wait till the end of the phase when you have completed your product and now you are heading out to sell your product. It is probably a little late by then.
Most of the known markets today are saturated and there are plenty of me too products. There are thousands of products on the shelves of a retail market vying for your attention. How does an entrepreneur then help customer make a pick? Competitive analysis can help you determine where your product can stand out the most.
Competitive analysis may start with your area of interest. Let us say you are interested in creating value for the local retail chains. You want to reduce the time an average buyer takes to get his items billed.
Determine if indeed there is a demand for your product
You know saving time of the buyer is important in your mind, but is it important enough for both retailer and customer? Do you have a case study where you can demonstrate that there is indeed a need for such kind of product? That builds up the case for adoption of your product.
Are there enough players?
If you have struck an idea and find that there is no competition, there could be two reasons
A) It is indeed a brand new idea
B) The potential of idea is so small that no serious player has explored the possibility of venturing into that space.
Both are difficult situation because both will need you to develop the market that hardly exist. Are you prepared for a long haul? Do you have the monetary capacity to make it worth it?
Are there a lot of players?
It is usually easy to start into a market ( not necessarily win it) where there is overcrowding. Maybe there is enough space for a new mobile phone vendor. It is hard to compete in top space with giants but there might be space at the bottom. However a lot of players mean that there is enough competition at every level. The skill of competitive analysis is to then determine a niche area which you can dominate.
Is your product in direct competition with a giant?
Direct competition means death knell for your product , unless you can clearly demonstrate a value proposition in your product that is markedly different from the leader . That means attacking a leader on its weak points. It is really very hard to do and as a competitor you need to have deep pockets similar to your competitor. It is better to compete in a small niche where you are not threatening the leader unless you achieve a critical mass.
Competitive analysis against free?
If there is a popular free product which is good and popular, it is really hard to compete with it . The best way to compete with a free product is to create a product that improves weak areas of the free product. The best way to determine weak areas is to ask the users of free product about it.
My product Share Juice Pro competes in a market where there are a lot of free products that are not only good but also they cover a large space in the market. Some of them are marketed by medium sized companies. However people have paid for my product because I have been able to demonstrate the value with the product ( for example good support and new features).
Finding out if customer base exists
The best way to determine if your product has any space in customer mind is to check out social media groups, forums and chat . People normally discuss their pain points quite openly in the hope of getting help. You can take a cue from there and determine what is the most common issue to which no one has answers and build your solution for it.
Developing a me – too services or app is frankly not a great idea because the upside to the profit is limited by the size of the market. Instead a better way in my opinion is to find the right niche and do everything in your capacity to rule it.
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