How to Use a Competitive Analysis Matrix
Recently we’ve discussed the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Today, we’re going to consider a tool that drills down to the product feature level and allows the product team to compare competitors’ products to your solution. This tool is the Competitive Analysis Matrix. A Competitive Analysis Matrix is usually presented in a spreadsheet format. However, many such charts include 8 or more features. Complex products can include twice that many feature comparisons.
How the Competitive Analysis Matrix Works
The purpose of the Competitive Analysis Matrix is to identify gaps in your competitors’ offerings. Your matrix should include a row for each feature to be considered. It should also include a column for each competitor with qualitative rankings of each feature in the competitors’ products. This means a ‘Yes’ or ‘No’ ranking won’t cut it. Your team needs to become as familiar with the competitive products as possible so you’ll feel comfortable evaluating each.
The market importance column is particularly significant. It is likely that your competitors have added some features to their products to meet the needs of a particularly important customer. These will not necessarily have overall appeal in the marketplace. By assigning a high, medium, or low ranking to each feature, you will be able to identify those features which you can probably cut from your product. This can help you save valuable resources and money. Every feature adds cost. The Competitive Analysis Matrix will help you hone in on the features that are most important. Once these are covered in your budget, you can start adding on other items that will appeal to the market as resources permit. Features should be added according to their ability to help your customers meet their goals.
Four Things a Basic Competitive Analysis Matrix Will Include:
1 – High-level Feature Sets – Group the features that are related together to simplify the matrix. It is easy for your team to get bogged down if huge individual features are considered separately.
2 – End-to-End Customer View – Don’t get off track by including just characteristics of the physical product. Include attributes that impact the entire user experience. This can cover such things as how the product is purchase, delivered, installed, supported, and maintained. By evaluating these items you may open avenues for product differentiation.
3 – Measure How Well Features Perform – Don’t allow yes or no answers. Remember this is a qualitative comparison.
4 – Measure of the Market’s Importance – Most likely your competitors have included features that are not highly valued by most customers. There is no need to match competitors feature for feature. Build the product the market wants no matter what you see competitors doing.