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Competitive Analysis

Exploring one aspect of this context, the business marketplace of competing companies/products/services, is the focus of this article. Our primary tool in this exploration is competitive analysis, which is an examination of the websites/web applications of your competitors.

The role and benefits of competitive analysis

Competitive analysis, as the name implies, is an exploration of the companies in a given industry sector or market niche that are competing with your company’s products or services for market share. The analysis may be an in-depth exploration of the top five competitors, or a larger number of competitors could be examined (typically with less depth in the analysis). In most cases, the client will have identified the target competitors for you.

While this article focuses on competitive analysis in the for-profit arena, it is worth noting that non-profit organizations can benefit equally from this analysis (which they might term a comparative analysis, if they viewed the other organizations as working toward a common goal with them).

Understand the competition

The primary benefits of any competitive analysis are a better understanding of what your competitors are doing, what they are offering to customers, and how to maintain your competitive advantage. The findings from this analysis are likely to factor strongly into your own company’s strategic planning. However, this is definitely not the only take-away from the process of analyzing competitors.

Build domain knowledge

Another benefit of competitive analysis involves expanding the knowledge base of those working on your website or web application. The analysis offers information about content and functionality that they have probably not considered. This is especially true for newcomers to your industry and should be fairly common; not everyone will be a subject matter expert. Looking longer-term, this educational process benefits not only the current project, but also any future project in that same industry. My own experience speaks strongly to this, as I have been both an Information Architect –(IA) for a web design firm and a Business Analyst (BA) for a large hospital system. In the IA role, I would be working on six projects with little domain knowledge in any of those areas; competitive analyses definitely assisted in getting to know those industries. As a BA, learning about competitors in the medical field on one project would enhance my performance for the next project.

Identify best practice

Exploring competitor websites offers the opportunity to discover what is working well for them, as well as what is commonly being offered via the Web. For example, if all the competitors are offering specific content and functionality, users will likely expect your site to offer similar content and functionality. If they are absent, users may go to the competitor site instead. It is important to note that user expectations often go beyond just giving the information or offering the functionality, and move into questions of information design and interaction design. In other words, what is the quality of the user experience? Poor implementations are unlikely to result in higher conversion rates.

Depending on the budget for the project and what questions we are trying to answer, I may conduct user testing of the competitor websites/web applications. My goals here are simple: Learn from their mistakes, avoid “reinventing the wheel” in my iterative design process, and find a better implementation from where they left off. If I am working on a design (or redesign) of a massive informational website with hundreds of pages, I might focus the testing on how they labeled and organized their content. Alternately, for a website with lots of transactional processes, I would focus on how they approached those tasks.

Expand the dialogue and the possibilitie

The final benefit comes from expanded dialogue within the development team, and with other units in your company, about what competitive data means to your strategic direction. Such dialogue can open up new options that would not otherwise have been considered. Competitors may be taking various approaches to reaching the customer base, so multiple possibilities exist. In this situation, a completely novel approach might be best, since no standard is emerging.

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