How to systematically make a competitive product analysis report?

The author starts with the concept of competitive product analysis and shares a full-process guide for writing a competitive product analysis report. The experience sharing will help you avoid those pitfalls.

I wrote an article before about how to output interactive documents, and a friend replied in the background "prohibited product analysis". It scared me, I think he meant "competitive product analysis". In fact, everyone should have done competitive product analysis, but the focus or purpose is different.

For example, one day, the big boss gave the PM a requirement: users felt that the login/registration steps were too cumbersome and too unfeatured.

• Product managers may select several apps for interaction/visual designers to refer to based on target users or product positioning, and explain the requirements clearly;
• The interaction designer will compare all related apps, extract the essence and discard the dross, and then get the best solution to hand over to the visual designer;
• After getting the corresponding requirements and prototypes, visual designers also need to do competitive analysis, but they focus more on the visual aspect. For example, why does a certain APP choose large rounded corners for its buttons? Are large rounded corners also suitable for us?

In the above example, it seems that the product manager is guiding us to do competitive product analysis, but in fact, this does not require a certain role to deliberately guide us. Everyone in every role (including development and testing) can do competitive analysis, and it is worth doing.

Simply put, this is the product thinking that an Internet person should have.

1. What is competitive product analysis?

Competitive products are competing products, competitors' products. Competitive product analysis, as the name suggests, is a comparative analysis of competitors' products.

The term competitive analysis originated from the field of economics and refers to the analysis of the advantages and disadvantages of existing or potential competitive products. With the popularity of the Internet, it is now widely used in the project preparation stage of Internet products. Through rigorous and efficient competitive product analysis, the product team can grasp the demand for their own products, have a clearer understanding of the market situation, and know both themselves and the enemy.

Truly useful competitive product analysis does not mean simply finding a few similar products, listing a few features, and describing a few pros and cons. More importantly, there are many copywriting logics, comparative analysis methodologies, and most importantly: the solutions obtained after analysis. The significance of competitive product analysis is to obtain a feasible strategy .

2. What is the purpose of competitive product analysis?

Before doing competitive analysis, you must be clear: What is your purpose? What exactly do you need to analyze? Only by clarifying the purpose first can you know what to focus on analyzing.

Secondly, the purpose determines whether the focus of our analysis is broad and comprehensive or narrow and deep. When the focus of the analysis is on the surface, it is difficult to highlight the key points. Similarly, it is difficult to take into account both narrow and deep when the analysis is broad and comprehensive.

In short, analyzing with a purpose will make your analysis more efficient and more valuable.

1. Functional reference

If for a certain core function, we want to quickly borrow (copy) a product that has similar functions and is already successful/mature, then we can focus on the product functions and compare some demand scenarios, business processes, interactive experiences, page UI, etc.

2. Product trends

If you want to focus on what the other party may do next, you can focus on business model, product data performance, function iteration, operation mode and sales channels, etc.

3. Profit model

Profit model is actually a problem that many start-ups will encounter. The company has been operating for many years without making a profit and has been unable to make ends meet. At this time, we can analyze the product form, business logic, operation method and sales channels among peer products.

4. Understand the industry

If you don’t know much about a field (for example, you are a newbie who has just joined the industry), and just want to better understand the products in this field through in-depth research on several products, then you may need to conduct a complete horizontal comparison, but you still need to have a focus on this basis.

For example, you may want to know whether the industry is in the development stage, growth stage or recession stage, or you may want to know the degree of capital favorability in this industry.

5. Product Potential

If you want to see which of two or several products is more promising and has more potential, or has stronger vitality, you can focus on the industry status, market prospects, product form, data performance, function iteration, operation mode, etc.

Of course, the above are just examples, and our analysis purpose is definitely far more than that. I hope that through these examples, everyone will understand the importance of clarifying the purpose of competitive product analysis and avoid falling into the trap of copying templates. After confirming the goal, we can analyze it from three perspectives: market, product, and experience.

3. How to do competitive product analysis?

Now that you understand what competitive product analysis is and have clarified its purpose, you can officially begin competitive product analysis. It can be divided into 4 steps:

1. Market analysis

In the dimension of market analysis, we mainly analyze the industry background, market size and development trends of the entire industry. Then, summarize the risks currently faced by the industry and the relevant countermeasures that can be taken . In addition, understanding the user scale or characteristics of the entire market can provide guidance for later selection of competing products.

How to obtain the above information? A commonly used method is through industry reports, industry white papers, etc. For example, some industry reports released by authoritative websites such as iResearch Consulting, Analysys Qianfan, Aurora Big Data, iResearch Institute and 199IT.com are of great reference value.

The following figure is a research report on China's short video market from iResearch Consulting:

In addition, you can also visit related websites of vertical industries, such as Goumin.com for the pet industry, Wangjingshe.com for the e-commerce industry, and some industry forums, etc. There are also many analysis reports in Baidu Library (they are not very timely, but they can be used as a reference). In short, more Baidu, more Google.

2. Choose your competitors

2.1 Collecting Competitive Products

The first step in selecting competing products is to collect competing products. So what are the channels for collecting them? Let’s talk about it in detail below:

1) Application market search and rankings:

This is quite common through searching through the app store and Android application market. In addition, Qimai Data and KuChuan are also recommended. Based on the keywords entered, the system will automatically provide some competitive product references. The following figure shows the search results after entering the keyword "Pinduoduo".

2) Industry reports: Recommended reports include iResearch Consulting, Aurora Big Data, Analysys Qianfan, and iResearch Institute, etc.

3) Baidu search keyword recommended products: The following figure shows the search results after entering the keyword "Pinduoduo" in Baidu.

4) Other methods:

Ask friends, friends circles, WeChat groups, etc. Browse industry forums and read relevant articles. For example, many articles on 36Kr and Huxiu are forward-looking and relatively good. There are also platforms like Qichacha and Tianyancha where after entering the corresponding company, there will be a recommendation for competing products, but the algorithm seems not very accurate, so just take a look.

2.2 Identify competing products

To determine whether a product is a competitor, we mainly look at three aspects: similar markets, similar product functions, and similar user groups. If all three conditions are met at the same time, it can be called a direct competitor . If one or two of them are met, it is an indirect competitor or a potential competitor .

For example: today’s Douyin and Weishi, and the relationship between Sina Weibo and Tencent Weibo back then are all direct competitors. Meituan and AutoNavi, as they have similar user groups to Didi (see the figure below), are both potential competitors of Didi. When Meituan launched its taxi-hailing service and AutoNavi launched its ride-sharing service, it clearly put a lot of pressure on Didi, the industry giant, in the online car-hailing sector.

As for whether to choose direct competitors or potential competitors in the end, it depends on the purpose of your competitive product analysis. If you want to make a more comprehensive research report, in most cases, direct competitors are given priority. If the focus is clear, you can also select potential competitors based on the specific points you target.

3. Competitive product analysis

After collecting and organizing information about the industry, market, etc., we confirm the competitors to be analyzed (usually 2-3) according to our own purposes, and then we can analyze the competitors. This is also the core content of this article.

3.1 Product Positioning

If you want to carve out a niche in a certain field, your products must be differentiated. This differentiation is generally reflected in product positioning and user positioning.

If you want to know the product positioning of competitors, you can go to the official website to find out. Another most common method is to check it on Baidu Encyclopedia. You can also refer to the latest industry research reports from major platforms. The process is not important, as long as the result is good.

The following is a brief list of the product positioning of the three leading players in the short video track: Douyin, Weishi, and Kuaishou (from Baidu Encyclopedia):

Although Douyin, Weishi, and Kuaishou are all products in the short video track, there are still differences in their product positioning.

• Douyin is a music short video community focusing on young people. It targets young people in first- and second-tier cities, adheres to the "fashionable and trendy" positioning, and creates a 15S music short video social network.
• Weishi is a direct competitor to Douyin and is an 8S short video sharing community based on Tencent's open relationship chain. Users can log in with one click through their WeChat and QQ accounts and simultaneously share the short videos they have shot to their WeChat friends, Moments, QQ friends and QQ Space.
• Kuaishou is a short video community platform for users to record and share their production and life. Compared with the trendy and youthful positioning of the first two, Kuaishou targets a wider user base, and the content and subjects it creates are closer to the lives of ordinary people.

From the above, I summarize the following conclusions:

▲Differentiation of product positioning of the three major products

▲Differentiation of user positioning of the three major products

In short, Douyin is young, trendy, and focuses on "content"; Kuaishou is real and down-to-earth, and focuses on "people". Weishi focuses on "traffic diversion" and seizes the markets of both.

3.2 User Profile

The following is an analysis of the user portraits of the two products from Penguin Intelligence’s 2018 “TikTok & Kuaishou User Research Report”:

Combining the above, we can conclude that:

1. Douyin has a higher proportion of female users, young users, high-income and highly educated users, and users in first-tier cities than Kuaishou, but the two do not form a clear opposition in user portraits;
2. The main user base of both is still in non-first-tier cities .

In fact, you will find that in the early days, Douyin really had differentiated competition with Kuaishou. The product positioning of the two is completely different, and it is precisely because of this that Douyin was able to grow rapidly in Kuaishou’s weak areas in the later period. However, both are now gradually becoming popular, especially Douyin, which has targeted the markets in third- and fourth-tier cities. The content is no longer so high-end, and a lot of it is rather vulgar, so much so that it was even administratively punished last year.

As for Weishi, it is more like a bystander. It seems that it is just trying to seize the market of both companies, and no obvious differentiation can be seen yet.

3.3 Scenario Analysis

The following is an analysis of the consumer scenarios of Douyin and Kuaishou from Penguin Intelligence’s 2018 Douyin & Kuaishou User Research Report:

Combining the above, we can conclude that:

1. Users use Kuaishou and Douyin to kill time , and the typical usage scenarios are after meals and before bedtime .
2. Douyin users prefer to browse [recommendations] , while Kuaishou users prefer to browse [follows] at a higher rate.

3.4 Product Features

Sorting out the functional architecture of competing products is a good reference for us to make a new product, and it is also a reference for optimizing and iterating old products. The following is a simple summary of the functional architecture using Douyin, Weishi, and Kuaishou as examples:

From the comparison of the three, we can see that:

1. Weishi has the most and most complex functions, Kuaishou has the simplest, and Douyin is the second;
2. The core functions of the three are shooting/publishing and browsing videos.

3.4.1 Core Functions

Home page video browsing mode:

From the above analysis, it can be seen that the browsing modes of the three are almost the same, and they all adopt full-screen loop playback mode. Kuaishou has several points of differentiation:

1. Swipe right to see a thumbnail vertical version of the video list, while Tik Tok and Weishi both take you to the author's homepage.
2. Kuaishou will scroll and display user comments on the current video. Click to display the [Pause] icon/progress bar (for videos longer than 30 seconds)

After understanding Kuaishou’s product positioning, these two points of differentiation are easy to understand. Kuaishou pays more attention to "people" , and these "people" are not just those who watch videos, but also those who shoot videos.

Therefore, swiping left to display the creator's video list weakens the cover guidance of the video, which increases the exposure of the author's work and allows viewers to browse in an immersive way.

Tik Tok focuses more on video quality , so if you want to watch other videos of the author, you must click on the author’s homepage, see all the video covers and then choose. Of course, in addition to this, it must be related to the operational strategy behind it (there is a Douyin store on the homepage, which can accelerate the author's monetization).

Comparison of shooting/publishing processes:

Based on the above operation process to summarize:

1. In terms of the complexity of the operating process, Douyin and Weishi are similar, and the operation is simple and easy to use . Kuaishou’s operating procedures are relatively complicated .
2. In terms of function settings, Weishi has slightly more special effects than Douyin. In terms of "beautification", Weishi has added body beautification special effects and lyrics subtitle function, which is a major highlight of Weishi's shooting. Kuaishou has more functions, including karaoke, photo editing and video functions, which is different from Douyin and Weishi.

3.5 Interactive Experience

In this section, it is recommended to only analyze the interactive experience of core functions. If you want to go into detail about each module, you should collaborate with an interaction designer.

Before we start, we can ask ourselves these questions: Is the main function entrance clear and unambiguous? Will you get lost jumping between entrances? Is the most important content presented directly? Through analysis, we can see if there are any aspects of interaction design of competitors that are worth learning from, and whether we can do better.

Suppose: the page layout of the other party’s product is more comfortable and more popular with users than ours, then we can consider whether we can learn from it based on our own product positioning and brand genes.

Let’s take the three major products, Douyin, Weishi and Kuaishou, as examples for analysis.

The above is the homepage layout (prototype) of Douyin, Weishi, and Kuaishou. By comparing them, we can conclude that:

On the homepage, both the layout and the interactive gestures are very similar . There are a few notable differences:

1) Kuaishou’s navigation adopts Android’s MD design specifications , placing the navigation at the top and using a drawer navigation to hide other functions. This is related to Kuaishou’s early user positioning. After all, it focuses on the sinking market, and users in third- and fourth-tier cities tend to use Android phones. Following MD specifications is a very good choice.

2) Swipe left on Kuaishou to display the author’s works list (thumbnails). This makes users more immersed and increases exposure for the creator's other works. As for Douyin and Weishi, swiping left to go to the author's homepage is equivalent to guiding users to follow the author, increasing the creator's exposure and is more in line with their operational philosophy of cultivating Internet celebrities/KOLs.

3) Weishi places the icons for functions such as likes, comments, and shares at the bottom of the video. This layout is really a bit mysterious and awkward, and it is very, very easy to click on it by mistake . Moreover, for users who are used to Douyin and Kuaishou (although they have only been optimized recently), it is very uncomfortable. You are here to grab other people's market, so why increase the user's understanding cost here? I suggest you change it to the right side as soon as possible. (Unless the boss of Weishi thinks that functions such as likes and comments are not important and just wants users to watch the video and immerse themselves in it.)

The above is just an example analysis of the interactive experience of the homepages of Douyin, Weishi, and Kuaishou, for reference only. In the actual process, everyone can analyze the specific situation according to their own needs or the needs of product iteration.

3.6 Visual Design

The same goes for visual design and interaction. If you want a detailed analysis, please collaborate with a visual designer, as they are definitely more professional in this area. We still take Douyin, Weishi, and Kuaishou as examples to talk about how to analyze visual design. Let’s first look at the LOGO design comparison of the three:

The logo of Tik Tok integrates the first letter "d" of the brand name with the musical note elements in the staff, and uses the technique of glitch art to reflect the dynamic posture of "shaking", and coupled with the black background, it gives people a very cool feeling.

The background color of Weishi is a gradient of blue and red with a "play" logo in the middle, conveying a trendy feeling. However, the rich gradient colors can easily cause visual fatigue. This design is relatively niche, but it is also in line with their product positioning as trendy and cool.

Kuaishou uses orange as its main color, with a highly recognizable “camera” logo, which clearly conveys that Kuaishou is a video software. Secondly, the solid color combination and the concise and clear design concept are more in line with the popular APP design combinations in previous years, and are relatively not as shiny and cool as the later APPs.

Visual design comparison of the page:

From the above comparison, we can see that:

Overall, the visual designs of the three are all pretty good. Due to the early product positioning, Kuaishou’s visual design is relatively simple among the three, unlike the high-end ones such as Douyin and Weishi. Compared with Douyin, it is obvious that Weishi pays much more attention to motion effects than Douyin; the icon design also gives people a more refined and unified feeling.

3.7 Business Model

Business model is a very broad concept. Usually we talk about many terms related to business model, including operation model, profit model, B2B model, B2C model, "mouse plus cement" model, advertising revenue model, and so on.

A business model is a simplified business logic. To put it in the most straightforward terms: business model is the way or method a company makes money.

Still taking Douyin and Kuaishou as examples, let’s briefly analyze the differences between the three in terms of operating models and profit models:

1) Operation model:

2) Profit model:

From the above comparison, we can see that:

1. Douyin has put a lot of effort into operations, making rapid progress and gaining momentum in a short period of time. Relatively speaking, Kuaishou's operations are more Buddhist, especially in the early stages, when there was almost no operation (CEO Su Hua: no star orientation, no promotion of celebrities, and acting as an "invisible" hand). It was not until 2017, when we felt the pressure from TikTok, that we officially started to work on publicity and operations.
2. In addition to relying on Tencent to attract traffic, the smartest move for Weishi was to cooperate with CCTV's large-scale evening parties. However, Douyin is not a pushover. It entered the market from the side and reached cooperation with 25 state-owned enterprises and successfully settled in Douyin.
3. In terms of profit model, the profit models of Kuaishou and Douyin are almost the same, except that Kuaishou relies more on a 50-50 commission on the live broadcast rewards of the anchor, while Douyin relies more on information flow advertising.
4. In terms of profit model, Weishi seems to be a bit behind the previous two. They are probably still looking for it. Currently, even if they accept advertisements, they are only advertisements for products under Tencent. In addition, e-commerce monetization is also being incubated.

The figure below compares the monthly active data of the three. As a latecomer, Douyin has surpassed Kuaishou and become the big brother in the short video track. As for Weishi, its business model is not yet mature and needs to be explored.

4. Analysis conclusion

The above three modules let us know how to analyze the industry, how to select competitors, and how to conduct comparative analysis of competitors. The last step is to obtain strategies or methods that are beneficial to our products from the above analysis, including development strategies, marketing strategies, iteration strategies, etc.

There are many analytical methodologies, the most commonly used is the SWOT analysis method , in addition there are 4P/4C theory, PEST theory (often used to analyze the macro environment), Porter's Five Forces Model, Boston Matrix (also called four-quadrant analysis method), etc.

Different methods have different usage scenarios and different functions. If you are interested, you can check the use cases of these methodologies online, or communicate privately. I will not discuss them in detail here.

Taking Tik Tok as an example, we conduct a SWOT analysis on two other competing products:

From the above analysis, we get 4 development strategies:

1) SO Strategy

1. By leveraging powerful intelligent algorithms and effective operating model advantages, we can enhance the quality of content and quickly capture the user base and market share in the short video trend.
2. Take advantage of the current huge number of users to improve the market competitiveness of the product itself in the short video field
3. Utilize the parent company's own financial support to increase operational efforts to improve product design, operation, and quality of UGC, PGC and other content
4. Taking advantage of the current favor of advertisers, we continue to try commercial monetization methods

2) WO Strategy

1. In the short video market, we optimize our own intelligent recommendation algorithm, optimize user life cycle management, establish a user loss prevention mechanism, and improve product competitiveness.
2. Establish an operation structure that is closer to users and optimize the distribution mechanism of short video traffic of its own products
3. Strengthen PGC operations, establish platforms, and try to commercialize PGC authors and advertisers
4. Encourage more ordinary people to create content and consolidate social relationships

3) ST strategy

1. Utilize the advantages of technology algorithms and operations to continue to increase product competitiveness, establish its own core advantages in functions and operating methods to seize market share, enhance the influence of products on end users, and create pressure on Tencent and Alibaba products in the same field
2. Develop algorithm review mechanisms to avoid policy risks
3. Take advantage of its own technical operations and other advantages to seize a large market share

4) WT Strategy

1. Optimize recommendation algorithms to improve user stickiness and establish technical barriers
2. Expand the market and grab users in third-, fourth- and fifth-tier cities
3. Combine multiple traffic platforms, implement cross-industry alliance policies, and enhance influence on terminals
4. Improve the quality control mechanism and prevent related policy risks.

According to the current development stage of the product, select one of them as the development strategy to be implemented. In the actual analysis process, we will obtain corresponding conclusions based on different needs.

IV. Conclusion

The ancients said: Know yourself and know your enemy, and you will never be defeated in a hundred battles. The purpose of analyzing other people's products is to guide your own actions, to extract the essence and discard the dross. Don’t analyze for the sake of analyzing, analyze with a purpose, and be sure to summarize action points in the end.

Finally, I have organized what I shared today as follows. You can refer to these points to do competitive product analysis.

You must analyze with questions and doubts. If you want to use a template, it's really not necessary. Competitive product analysis is very helpful for understanding the entire industry dynamics. Basically, once you do it, you will have a general understanding of the gameplay, rules, etc. of the entire industry. Then what kind of playing style you want to use depends on what your goal is.

Author: Wan Su

Source: Wansu