Competitive Analysis

Knowing Your Battlefield

🔄 Quick Recall: In the previous lesson, we built customer journey maps that reveal the complete customer experience. Now we look outward—at the competitive landscape. Understanding what alternatives your customers have helps you position, differentiate, and compete more effectively.

Your product doesn’t exist in a vacuum. When a potential customer evaluates your offering, they’re comparing it—consciously or unconsciously—to every alternative they know about. Competitive analysis helps you understand those comparisons and win them.

By the end of this lesson, you’ll be able to:

• Build a competitor profile that goes beyond surface-level features
• Create a positioning map that reveals market gaps
• Use AI to accelerate competitive research and monitor changes

The Competitive Analysis Framework

Step 1: Identify Your Competitive Set

Your competitors fall into three categories:

Most businesses focus only on direct competitors. But customers often choose indirect or replacement alternatives—understanding the full set is crucial.

✅ Quick Check: Who are your direct competitors? Now think harder—what indirect alternatives do customers use instead of your product?

How AI Helps

“I sell [product/service] targeting [audience]. Help me identify: (1) 5 direct competitors, (2) 3 indirect competitors, and (3) 3 replacement alternatives my potential customers might choose. For each, briefly explain how they address the same customer need.”

Building Competitor Profiles

For each significant competitor, build a structured profile:

The Competitor Profile Template

COMPETITOR: [Name]
================
Website: [URL]
Founded: [Year]
Size: [Employees/Revenue if available]

PRODUCT:
- Core offering: [What they sell]
- Key features: [Top 5 features]
- Pricing: [Model and prices]
- Target customer: [Who they focus on]

POSITIONING:
- Value proposition: [Their main promise]
- Messaging: [How they describe themselves]
- Key differentiators: [What they claim is unique]

STRENGTHS:
- [3-5 genuine strengths]

WEAKNESSES:
- [3-5 genuine weaknesses or gaps]

CUSTOMER PERCEPTION:
- Review score: [G2, Capterra, etc.]
- Common praise: [What customers love]
- Common complaints: [What frustrates customers]

Data Sources

How AI Helps

“Here’s publicly available information about my competitor [name]: [paste website text, review summaries, pricing page]. Build a comprehensive competitor profile following this template: [paste template]. Include strengths, weaknesses, and positioning.”

Creating a Positioning Map

A positioning map is a powerful strategic tool. It plots competitors on two dimensions to visually reveal where the market is crowded and where gaps exist.

How to Create One

Step 1: Choose two dimensions that matter to your customers.

Common dimension pairs:

• Price (low → high) vs. Quality (basic → premium)
• Simplicity (easy) vs. Features (comprehensive)
• Self-service (DIY) vs. Managed service (done for you)
• Speed (fast) vs. Customization (tailored)

Step 2: Plot each competitor based on where they fall on each dimension.

Step 3: Identify the gaps. Empty quadrants represent potential positioning opportunities.

Example

HIGH PRICE
    │
    │    [Competitor A]      [Competitor B]
    │    Premium, complex    Premium, simple
    │
────┼────────────────────────────────────
    │
    │    [Competitor C]      ★ GAP! ★
    │    Budget, complex     Budget, simple
    │
LOW PRICE

COMPLEX ←──────────────────────→ SIMPLE

The gap in “budget + simple” suggests an underserved market segment.

How AI Helps

“Here are my competitors and their characteristics: [list competitors with pricing, feature complexity, target market, and key attributes]. Create a positioning map using the two most strategically important dimensions for my market. Identify any gaps and recommend where I should position.”

Competitive Monitoring

Analysis isn’t a one-time event. Markets evolve. Here’s a sustainable monitoring system:

Monthly Check-In

Quarterly Deep Dive

Refresh your competitor profiles and positioning map every quarter.

How AI Helps

“I want to set up a monthly competitive monitoring routine. My 3 main competitors are: [names]. Create a monitoring checklist with: what to check, where to find it, red flags to watch for, and a template for recording changes. Also suggest what signals would require immediate strategic response.”

From Analysis to Strategy

Competitive analysis drives four strategic decisions:

1. Positioning (Where to Compete)

“Based on this competitive landscape: [describe], where should I position my product to serve an underserved segment?”

2. Differentiation (How to Stand Out)

“My competitors focus on [their strengths]. What unique value can I offer that they don’t? Suggest 3 differentiation strategies.”

3. Messaging (What to Say)

“How should I frame my product compared to [Competitor A] who positions on price and [Competitor B] who positions on features?”

4. Product Decisions (What to Build)

“Based on competitor weaknesses and common customer complaints: [list], which product improvements would create the most competitive advantage?”

Try It Yourself

Run a competitive analysis:

“Help me conduct a competitive analysis for my business: [describe your product and market].

1. Identify my competitive set (direct, indirect, replacement)
2. Build profiles for the top 3 direct competitors
3. Create a positioning map with the most strategic dimensions
4. Identify market gaps and underserved segments
5. Recommend a positioning strategy and key differentiators”

Key Takeaways

• Analyze direct, indirect, and replacement competitors—not just obvious rivals
• Build structured profiles covering product, positioning, strengths, weaknesses, and customer perception
• Positioning maps visually reveal market gaps and differentiation opportunities
• Ongoing monitoring (monthly check-ins, quarterly deep dives) catches competitive changes early
• AI helps profile competitors, create positioning maps, and generate strategic recommendations

Up Next

In Lesson 8: Capstone — Complete Research Project, you’ll bring every method together—surveys, interviews, personas, journey maps, and competitive analysis—in a comprehensive research project from start to finish.