Ux method: Competitive analysis

How to quickly deepen our understanding of a marketplace by evaluating other’s ideas

In user-centered design, designers focus on users’ needs to create highly useable and accessible products for them. But before we can generate ideas, we must first consider the context in which the product is used, as well as the market that it exists in. We use research methods to produce data and gather insights to make sure our design decisions are being developed to support our user's needs.

As you go about your research, you’ll need to learn everything you can about what works, how it works, what hasn’t worked, and why. Your ultimate goal is to produce a solution that presents a competitive advantage by look for gaps or inconsistencies in the market and figuring out how you can leverage them to make your product competitive.

One particular method of many is competitive analysis. In this article, I’m going to explain what a competitive analysis is, how to conduct one, and how to present your insights in a digestible manner.

If you want to learn about UX research methods and activities from the source, go here. (Nielson Norman Group)

What is Competitive Analysis?

Competitive analysis is a UX Methodology that creates a comparison of other offerings in the marketplace as a source of ideas and insights.

Basically, it means gathering all the info you can to represent the current state of the market and systematically examining its competitors. You get an intimate look under the surface and it helps reveal opportunities and steer clear of threats in a particular marketplace and its products.

Why do we need to investigate our competition?

To answer a few questions, such as;

  • What are your competitors doing that the current product is not?
  • How does that align (or misalign) with user needs and goals? Where can your product be innovative in this space?

How to Conduct a Competitive Analysis

To generate a competitive analysis, we can use some guides for our examination.

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A quick competitive analysis infographic I put together in Venngage.

To determine clear goals you must first define the criteria for your competitive evaluation. You’ll want to identify what you want to learn or know about the competitive landscape specific to your needs.

Some overarching questions to consider:

  • What decisions will your competitive research impact?
  • What are your competitors doing that the current product is not?
  • How does that align (or misalign) with user needs and goals?
  • Where can your product be innovative in this space?

After deciding on the evaluation's overarching goals, you can now start identifying competitors and break them down into 2 categories; direct and indirect.

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Screenshot of 4 Direct and 2 Indirect competitors my team created to explore the On-Demand home service industry.

What is the difference between a direct competitor and an indirect competitor?

Direct competitors are the ones who offer the same, or a very similar, set of features to your current or future customers, which means they are solving a similar problem to the one you are trying to solve, for a customer base that you are targeting as well.

Indirect competitors are the ones who offer a similar set of features but to a different customer segment; or, they target your exact customer base without offering the exact same set of features, which means indirect competitors are solving the same problem but for a different customer base, or are solving the same problem but offer a different solution.

Google is your friend here, as well as the iOS App Store, Google Play. Use all the resources at your fingertips to seek out your current and potential competitors. If you're entering a market that has little to no competitors, ask yourself why and seek out who has tried and failed in this landscape.

How many do I compare, you ask?

There’s no rule really, but it's a good starting place to determine at least 3 direct competitors and at least 3 indirect competitors with the goal of identifying and understanding the users and challenges competitors face in an adjacent landscape.

How To Find The Right Competitors?

3. Research and aggregate data

Conduct your competitive analysis by analyzing competitors’ roles, features, brands, and relative placement within the market. Then, aggregate your data in a feature competitive matrix or visual comparison table for a side-by-side comparison. You can use Microsoft Excel, Google Sheets, or whatever you’d like to make a spreadsheet.

Types of things to include in your competitive matrix.

  • Product or marketing page URL
  • Value Proposition
  • Launch date
  • Platform(s)
  • Business model / Pricing model
  • Target user base
  • Features (list features in your spreadsheet so you can use a rating system or checkmark for each competitor)
  • Strengths
  • Weaknesses
  • Opportunities

Add visual indicators of the synthesis of your data. Color code cells where rating systems or checkmarks are used. Include screenshots of the competitors where applicable to support the data presented.

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Examples of Competitive Analysis 1
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Examples of Competitive Analysis 2
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Examples of Competitive Analysis 3

Now that we’ve collected an enormous amount of data, what do we do with it? To communicate our insights in a clear way, we create an analysis report or a summary of our insights. Our intention is to convey the purpose and goals of this analysis in a concise manner to provide quick context for anyone who wasn’t directly involved.

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What goes into writing a successful analysis summary?

Introduction: Convey the purpose and goals of this analysis in a concise manner.

  • State the purpose of your competitive analysis
  • Write an assertion about the marketplace based on your findings
  • Convince your audience that they should read your document
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Direct and indirect competitors: What competitors did you select and why? What areas did you assess and why? Incorporate screenshots to give clarity on the value proposition of each competitor.

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Comparisons: What makes each competitor unique? Identify strengths, weaknesses, and opportunities for each competitor. Consider any unique UX features or characteristics you found during your research. Present a summative report to visually showcase your findings.

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Final analysis: Write a brief summary of your closing key insights. What market opportunities are worth exploring? What research questions were you able to answer? How does this impact your next steps? How might this inform your design direction? Make recommendations for the next steps based on your analysis.

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Finally, share your findings with your client and stakeholders to Showcase opportunities for your product in your analysis.

To be competitive in a new business, you need to discover everything you can about what works, what hasn’t worked, and why. Understanding of the competitors in any product space helps properly identify opportunities in the market that better the chances of producing design solutions that are uniquely competitive and considerate of the business needs of your company.

If you’d like to learn more about Competitive Analysis and UX Strategy, jump into Jamie Levy’s UX Strategy online.

Written by

UX Designer w/ a background as a photographer and digital artist. I’m a visual storyteller dedicated to solving complex problems & producing creative solutions.

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