Probably THE most important stage in any product-related research and analysis is the Competitive Landscape, and yet it’s very near limitless scope makes it a dangerously time-consuming and potentially paralyzing activity. In this, our next installament of OneDesk’s Pragmatic Marketing Goes Social series, we are looking at Competitive Landscape and some tricks on how to stay focused.
Certainly no big product decisions should be taken without a clear and current perspective on the competition. Unfortunately this is also true of just about every other decision a company might make, be it deciding where to locate an office, who they select to do their PR or advertising or who they want to hire and how they plan to lure them. There isn’t a thing that a company does that can’t be informed by and improved as a result of thorough competitive analysis, and this is precisely why it is so often watered down and paralyzing.
But What Do You REALLY Want to Know?
As we’re all about the Product, probably most important piece of advice out there would be that one elusive and critical imperative: FOCUS! To ensure this can happen it’s a good idea to start your competitive analysis before anyone gets a chance to ask for it. Why? By the time an executive is asking for it, you may be expected to answer hundreds of questions from pricing, to positioning to product colors and PR, and not necessarily that, or any order. Don’t let it happen.
So here you are, well ahead of the game. And you are focused. Now focus even more.
While it’s true of any study, the best way to approach a particular piece of analysis is to narrow the problem as much as possible. Contributing to the Pragmatic Marketing blog, veteran product manager Julie Anne Reda does a great job illustrating the importance of selecting the right approach to Competitive Analysis. While SWOT is a great way to see where you are and where you might be in 6-12 months, it won’t tell you what your next new product should be.
For that, Reda recommends the 5 and 6 forces model which takes a balanced look at market opportunity vs. competitive saturation, two edges of the sword that must be well examined before jumping into or even pitching a new product concept. The forces include: 1) The bargaining power of Customers (commoditization), 2) The bargaining power of suppliers (costs), 3) Threat of new Entrants (Red Ocean), 4) Threat of substitute products (possible irrelevancy)…and all centered around the perceived competitive rivalry within an industry.
This is an area that has been well explored in the cult favorite Blue Ocean Strategy: How to Create Uncontested Market Space And Make the Competition Irrelevant, by W. Chan Kim and Renee Mauborgne As we weigh the options between a deadly calm and quiet blue ocean and a fierce and bloody battle in a red ocean, we must be keenly aware of the nuanced advantages and disadvantages of each.