UX Competitive Analysis

Competitive analysis (marketing competitive analysis): Definition

Competitive analysis (competitive benchmarking or UX competitive analysis) consists of collecting, categorizing, and organizing data on companies operating in the same market. It's one of the most widely used UX research methods that allows you to gain valuable insights into your competitors' products and services.

Companies with similar production, service, or production-service profiles.

UX competitive analysis is a method recommended at each phase of a company's formation and operation:

• Before market entry
• In the period of gaining and strengthening market position
• In the boom and recession periods
• In the situation of crisis and stability
• In pre-and post-investment situations
• When launching new products and services on the market

A multidimensional approach (data acquisition from a range of sources on different aspects of business operations) enables an organization to:

• Asses its position and role in the market structure
• Set objectives
• Identify direct and indirect competitors
• Evaluate the strengths and weaknesses of products and services that belong to you or competitive brands
• Assess deficiencies (e.g., organizational, technological, human resources, and finances)
• Develop an image and select marketing tools relevant to the situation, objectives, and capabilities
• Compare strategies, methods, measures, results, and ways to respond
• Formulate hypotheses and set research objectives used in other marketing surveys
• Indicate competitive advantages.

UX competitive analysis enables you to act in the following manner:

• Purposeful — by identifying short- and long-term goals, expected and possible as well as probable and desired
• Rational — due to systematic, exhaustive (as far as possible), and methodical aggregation and analysis of publicly available data
• Strategic — through regular updating of methods, means, and ideas for achieving the objectives set
• Competitive — by finding additional values, hidden or unknown advantages, identifying market gaps, unmet needs, and previously unknown issues
• Preventive — by preparing a company for the emergence of new competitors, ways to compete in the market, new solutions, products and services
• Flexible — due to customer segmentation, and offer customization to meet the (individual and group) needs, standards, and expectations
• Adaptive — by developing scenarios of actions in crises and scenarios of adaptation to market changes (resulting from natural market evolution or sudden market revolution)

UX competitive analysis: Goals

The competitive analysis process (point-based analysis) aims to ask the appropriate questions and find the most detailed answers possible.

The fundamental questions should be about the following matters:

• Number of companies operating in a given market
• Market structure, defined according to the criterion of company size, the scope of activities, typical/innovative offer, profile similarity, percentage of market share, growth potential, extent and depth of need fulfillment, and effectiveness of problem-solving
• Financial standing of the competitors, which may be indicated by investments (e.g., in modern technologies), employment growth, acquisitions of other companies, mergers
• Target group structure and B2B customer segmentation methods
• Images and brands of competitors
• Method of communication with customers (channels, tools, methods, language, e.g., social media)
• Mistakes made by the competitors
• Possible competitors' strategies and ways to react
• Competitors' successes, in particular, their reasons and conditions enabling them (e.g., why products or services are more likely to be purchased)
• Market expectations, prevailing trends and fashions, routines, and expectations (e.g., competitor price analysis and SEO competitor analysis)

In the strict sense (regarding research methods and techniques), we're talking about desk research.

The most commonly analyzed materials for competitive analysis are the following:

• Company websites (the information contained in them is analyzed for product, service and offer description and presentation, service methods, company and team presentation, ways of making contact and establishing relationships, used functionalities, technologies, and design system)
• Company fan pages (analysis of popularity, methods for communication and attaching customers, responding to negative opinions, solving customer problems)
• Forums, discussion groups, discussions under the articles in blogs (analysis of opinions, issues, ratings, emotional reactions, levels of satisfaction and frustration — Voice of Customer)
• Content published in external (industry, general) media, in particular for company self-presentation, description of its capabilities, tone of voice
• Recommendation, review, and rating systems — quantitative (number of negative, positive, and neutral ratings) and qualitative (analysis of advantages and frustration and disappointment highlighted by the customers) analysis, analysis of the popularity of a particular product
• Advertising materials and promotional activities (sponsoring, ATL, BTL, online, ambient, buzz)

How to conduct your own UX competitive analysis: Techniques

UX competitive analysis is an activity that should be conducted in a regular, systematic, and exceptionally reliable manner.

Avoid the analyses that are:

• Superficial — reduced to only a few major market rivals
• Shallow — focused on a limited number of factors (e.g., prices, conditions for the provision of services, product parameters)
• Temporally selective — conducted incidentally, in emergencies, or an economic downturn
• Static — covering a short period, not allowing you to see trends, cycles, repetitions, tendencies, and preferences resulting from the analysis of large volumes of data
• Not organized through indicators, not allowing comparison
• Biased — reduced to positives and negatives of competitive offers; analyses that are only qualitative or only quantitative
• Narrow — favoring only short-term or long-term goals
• Strict — not taking into account indirect competition
• Products and services responding to and fulfilling the same need but not belonging to the same category (e.g., a need for security can be fulfilled by both door locks and door phones).

Using a consistent methodology can reduce the risk of creating an incomplete and unreliable UX competitive analysis.

Competitive analysis: Methods

The analysis of the market and competition should primarily include:

• Complete list of market competitors (continuously updated and including every entity)
• Set of precisely defined indexes, criteria, scopes, and characteristics
• Way to compare, evaluate, and prioritize, in particular, a way to indicate and define direct competitors
• Periodicity of subsequent analyses and a way to aggregate further data
• Platform, methods, and types of competing (in particular, in terms of time, space, price, function, and service)
• Methods of data acquisition and possible errors and inaccuracies
• Ways to formulate recommendations.

If you want to conduct a UX competitive analysis, you should take into account the above issues.

Otherwise, the information collected will be incomplete and inconclusive, leading to wrong conclusions and risky and harmful actions.

UX competitive analysis and competitive market analysis

UX competitive analysis and competitive market analysis are very similar, although they have their differences. They both aim to analyze the strengths and weaknesses of your competitors.

The competitive market analysis focuses on understanding the impact of different marketing strategies on product sales compared to your competitors. It involves examining the target audience, go-to-market strategy, and pricing of the competition.

The goal of market analysis is to examine the following aspects of your competition:

• Communication (voice and tone)
• Visual brand elements
• Sales strategy
• Positioning

UX competitive analysis and user research

UX competitive analysis works very effectively when combined with market and user research. User research supports competitive analysis by providing the perspective of users and their needs and goals.

On the other hand, UX and user researchers don't need to know all the ins and outs of marketing and the details of various strategies; therefore, market researchers can supplement this knowledge and provide more insight.

That's why you should combine UX competitive analysis with user and market research. Thanks to this, you will be able to draw benefits from each of these research methods.

To effectively combine these research methods, you should:

• Find common goals between researchers. You should find overlapping objectives, allowing researchers to share their results and sights without wasting resources on redundant research. Moreover, this ensures that you won't miss any interesting results.
• Use different research methods during the development process. This will allow you to keep your results up to date and enable your research teams to have the latest results and insights. Furthermore, different types of research results will aid you at different phases of the development process.
• Ensure that the results are available for all parties involved in the project. It's crucial for research results to be easily sharable with various involved parties to make the product design process smoother and more effective. Marketers, designers, managers, and other stakeholders need up-to-date data to make informed design decisions.

The integration of these three research methods into the product development cycle will not only help you better understand your competition but also enable you to discover your business's strengths and weaknesses. Thanks to them, you can find opportunities to outperform your competitors and improve areas that are important from the users' perspectives.

Moreover, effective market research can help you uncover new market niches worth investing in.

Competitive analysis in marketing: Examples of uses

A professionally conducted UX competitive analysis will consider various levels of company operation.

The most popular are the analyses of the following:

• Trends, cycles, fashions: Market and competition assessment, indicating changes within a specified time, increases and declines in interest, conditions determining market variability and dynamics
• Competition description: Comparison of products and services, functional and qualitative characteristics
• Values: value proposition and unique selling proposition
• User journey and user story comparisons
• Usability tests on competitor's prototype: Usability testing allows you to discover the effectiveness of your products, which you can compare to the results of your competitors
• Competitive SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) indicates threats, strengths, and weaknesses of a product, service, or brand and the chances and opportunities encountered by a company during further operations and when competing with other businesses.

According to the four-dimensional analysis, the competition is analyzed on the following levels:

• Brand (brand competitive analysis): Comparison of corresponding products and services in the most important dimensions of price, function, and usability.
• Industry: Comparison of all manufacturers or service providers, allowing you to get a broader market perspective.
• Form: This enables you to consider competing as an activity consisting of meeting the needs in a similar and/or different manner.
• General: Describe the economic and industry situation affecting all companies and their mutual competitiveness.

Benefits of UX competitive analysis

It allows you to answer the key questions: What is market competition all about? How is it expressed, and with what tools and methods?

The main advantages of competitive analysis (market competitive analysis) include the following:

• Attracting new customers that haven't been interested so far or winning over the customers of the competition
• Higher profits (positive), avoiding losses (negative)
• Development of a coherent strategy for growth or survival
• Organized and informed design process
• Discovery of market niches
• Orientation in market conditions and specifics
• Evaluation of risk and possible benefits
• Learning from the competitors' mistakes
• Knowledge of the strengths and weaknesses of the competitors
• Development of criteria for assessment and comparison
• Getting to know customer needs across a broader spectrum
• Possibility to build an image, communication, and uniqueness based on specific information
• Avoiding the risk of replicating solutions and being accused of unfair competition.

User experience competitive analysis: UX benchmarking

A company's competitive edge is also expressed in a user-attractive website and web application.

Competitive analysis of a company includes analyzing the customer market, competition, and competitors' characteristics. It also includes the company website and company tools (e.g., SaaS —Software as a Service).

UX competitive analysis allows you to assess to what extent:

• Similar, enhanced solutions have a chance to succeed in the market
• The technology used builds a competitive advantage or allows gaining an advantage
• Website and application comply with the latest standards of UX, SEO, and UI trends
• The users accept non-standard solutions; what reactions, attitudes, emotions, and impressions they evoke
• The competitors customize their offer and make it available to different customer segments
• The competitors' offer provides a positive or negative role model in terms of technology, functionality, usability, and UX
• Digital products, technologies, standards, and social media support sales, automate processes, make shopping easier, facilitate ordering services, and solve specific business problems as well as individual and group customer problems
• A given product or a service can be offered digitally or supported by digital solutions.