As companies grow, they often lose sight of the entrepreneurial practices that helped them get to where they are today. It is critical for companies to maintain these entrepreneurial capabilities throughout and analyze the competition around them. One can understand their competition either by using traditional methods like surveys, interviews, and questionnaires or using digital tools like eMarketer, App Annie, Crunchbase, etc.
Below are a few tips on how to effectively utilize competitive analysis for the success of your product:
Understanding Customer Needs/Behaviours: Many companies are making their data public through social APIs. One can leverage these APIs to extract user information and usage patterns. For example, Joao utilized the publicly available APIs on Instagram to understand the demography of the users like age, geography, gender, etc and later compare it with the data he had collected from YouTube. Another way of understanding the customer behaviour is through online tools like eMarketer and App Annie.
Quantifying Competitor’s Value Proposition: When companies don’t provide sufficient information through APIs, you can smartly observe the http requests that are being made when you navigate the website, write Python scripts that will iterate and capture the different JSON responses, and organize and analyze the data according to your business use. For example, Joao scraped the entire Netflix catalog by writing a simple Python script that made http requests and captured data for the different categories of movies.
Quantifying Competitor’s Business Performance: Analyzing the competitor’s annual reports/financial reports can help you understand what features/products of theirs are bringing in more/less revenue. Another approach to quantifying the competitor’s business performance and one of Joao’s favorites is the bottom-up/top-down approach. In this approach, he breaks down and segments his users and concentrates only on the target user who is most likely to use the product.
These are the key principles behind a successful competitive analysis. Every Product Manager needs to have a degree of business acumen: you can have the most solid product framework in the world, but without a solid business plan you will never be able to launch with success.