Creating a competitor map

Article 12/34 about #productmanagement with a focus on Hard skills.

Introduction

A competitor map is a key tool in any product manager’s arsenal. It is not just a list of competitors, but a comprehensive visual representation of the market space that helps you understand how different products or services compare to each other on a number of important parameters.

What is a competitor map?

A competitor map is a graphical representation of the positions of all direct and indirect competitors in a market. It includes key elements such as price ranges, product quality, customer experience and unique offerings.

Why it is important to build a competitor map

Strategic decision making

Understanding competitors’ positions in the market enables product management leaders and teams to make informed strategic decisions. This applies not only to product development and improvement, but also to marketing, pricing, and selecting target market segments.

Identifying competitors’ weaknesses and advantages

Analyzing competitors through a map allows you to identify their weaknesses that you can target, as well as understand what their strengths are that you need to consider or possibly adopt for your own product.

Identification of market trends and needs

A competitor map gives you the opportunity to not only analyze your competitors, but also to deepen your understanding of the market as a whole. This includes trends, changes in needs and preferences of the target audience, based on which new product offerings can be adapted or developed.

The basic steps of building a competitor map are

Defining evaluation criteria

The first step in creating a competitor map is to select the parameters to compare. These can be price, product quality, level of innovation, customer service, market share, unique selling propositions, etc. It is important to choose the criteria that are most relevant to your sector and target audience.

Collect and analyze competitor data

The next step is to collect competitor data on the selected parameters. Sources can include public data, reports from research companies, customer feedback, and direct study of competitors’ products. The data obtained is analyzed to identify trends, strengths and weaknesses of each competitor.

Data Visualization and Map Creation

Once the data is collected and analyzed, data visualization follows. A competitor map can be designed in the form of a table, where the rows are the competitors and the columns are the selected comparison criteria. Another popular format is a two-dimensional space where the two most important parameters for analysis are plotted on the axes. Each competitor is placed on this plane depending on its positioning on these parameters.

Live examples and case studies

An example of building a competitor map for an EdTech startup

Let’s introduce a startup that is developing an educational platform for secondary education. In the process of competitor analysis, the following criteria were selected for comparison: technological innovation, breadth of subject matter, personalization of learning, and affordability. Using open source data and feedback from early users, the team gathered information on key players in the market.

Based on the data collected, a map was created with the breadth of subject matter coverage on one axis and the degree of personalization of learning on the other. This map helped identify a niche for the startup — a high degree of personalization with a focus on STEM subjects, where competition was less intense.

Analyzing the resulting map and the decisions made based on it

The analysis of the competitor map showed that most of the existing solutions either offered a wide range of items with a basic level of personalization or focused on a narrow range of items with deep personalization. Based on this analysis, the startup decided to develop a product that offers deep personalization in STEM subjects, using the latest advances in artificial intelligence to tailor learning content to each student’s needs.

Using a competitor map for strategic planning

A competitor map is a valuable tool not only for understanding your current market position, but also for strategic planning for future product development. Here are some key ways in which this can be done:

Adapting product strategy

Based on competitor positioning and identified niches, companies can adapt their product strategy to take a leadership position. This may include developing new features, focusing on specific target audiences, or changing pricing policies.

Forming a unique selling proposition (USP)

Understanding the unique strengths and weaknesses of competitors allows companies to form a UTP that speaks directly to the needs and wants of the target audience. This helps the product stand out in the market and attracts the attention of potential users.

Forecasting future market trends

Regularly analyzing the competitor map enables you to not only react to current changes in the market, but also predict future trends. This allows companies to stay one step ahead of the competition by innovating and adapting their products to anticipated changes in consumer preferences and technology.

A simple example of a competitor map

Creating a competitor map is an important step in market analysis and strategic planning for any product. A competitor map helps you visualize your product’s positioning relative to your competitors and identify key strengths and weaknesses of both your product and your competitors’ products. Below is a basic competitor map template that can be customized to meet the specific needs of your product.

Rate the competitor’s importance on a 4-point scale: 4 — strong competitor, difficult to reach, 1 — weak competitor. And rate all competitors on this scale.

Assessing Significance:

• TaskFlow (3): While TaskFlow is a direct competitor, its primary focus on startups and freelancers makes it less relevant to the medium to large business segment targeted by ProjectMaster.
• AgileBoard (4): AgileBoard is a strong contender, especially because of its specialization in Agile and Scrum, making it the preferred choice for mid-sized businesses that actively use these methodologies.
• TeamSync (2): As an indirect competitor, TeamSync focuses on improving communication within large corporations and, while it offers valuable features, its relevance to the ProjectMaster segment is rated as below average.

Conclusion

Using a competitor map is a key element of successful product management. It allows you to not only gain a deeper understanding of the market and competitor positioning, but also to strategically plan your product development by adapting to changes and identifying new growth opportunities. Creating and regularly updating a competitor map should be an integral part of any company’s product development and management process.