In today's competitive app landscape, understanding your competitors is crucial to creating a successful product strategy. By analyzing what others are doing right and wrong, you can identify market gaps, uncover new ideas, and create a unique value proposition that sets your app apart from the rest. In this article, we'll explore why competitor analysis is essential for any app developer looking to improve their user experience.

Many product people often overlook the importance of competitor analysis, citing reasons such as "I don't want to stalk others," or "We're unique and have great ideas, so we don't need anything else." However, conducting a thorough analysis of your competitors can help you learn from their mistakes, identify market gaps, and create a long-term strategy that leads to victory.

Grouping Competitors: Direct and Indirect

When analyzing your competitors, it's essential to group them into two main categories: direct and indirect. Direct competitors solve the same problem with the same value proposition for the same target audience. Indirect competitors, on the other hand, have similar value propositions but target different audiences or use different approaches.

For example, Google Search and Bing are direct competitors, while an encyclopedia is an indirect competitor that provides special pieces of information. Similarly, a business class trip competes with Skype in terms of its value proposition, even though they serve different purposes.

Conducting Competitor Research

To start researching your competitors, begin by using basic tools like Google to search for keywords related to your product. You can also explore app stores and marketplaces for similar solutions.

Next, collect data on each competitor, including their name, URL, direct or indirect status, summary, pros, cons, revenue streams, marketing channels, and numbers (such as website visitors, app downloads, social media followers, prices).

What to Look For in the Data

After gathering all the data, analyze it by scanning through everything collected and mentally piecing together the big picture. Look for three things:

  • Market gaps: An underserved segment, a problem that came up during product discovery and unsolved by others, or a new combination that would make sense.
  • What strategies work: From the numbers, guess how each company performs; what are the product or marketing strategies they use; why do the others trail behind?
  • New ideas: Does anything from other industries or apps suit this market; what idea or new solution does this market lack?

Creating a Product Strategy

After considering all these things, define your product strategy, which identifies pains to solve, the competitive advantage on the market, and steps to take to get there. Aim to create value innovation by creating something better than current solutions at a lower price.

Competing only with lower prices can cannibalize business, as someone will always do it cheaper. Instead, focus on creating something unique that sets your app apart from the rest.

Conclusion

By conducting competitor analysis and gathering valuable insights about what others are doing right and wrong, you can create a successful product strategy that sets your app up for success. Remember to group competitors into direct and indirect categories, collect data on each competitor, analyze it, and look for market gaps, strategies that work, and new ideas.

By following these steps, you'll be well on your way to creating an app user experience that exceeds expectations and sets you apart from the competition.