UX Diary #5: Competitive Analysis

Hey there, again! The UX Diary keeps going after a quite-long break. Today, I’ll share my notes about Competitive Analysis with perspectives of business, marketing and UX design seperately. If you just met with UX Diary you can click here to start UX Diary from the beginning.

Doing solid investigative market research is like peeling an onion. The more layers you peel, the more you reveal. And it also might bring tears to your eyes if you discover that your product vision is not actually unique. But, don’t you want to know what it will take to beat the competition sooner rather than after?

— Jaime Levy, Author of ‘UX Strategy

I evaluate the UX design as a set of intersections of business development and marketing. UX Designers always needs to look at the project with the eye of business owner and they have to design user experience with sales purpose. If the designer more capable than that, he/she could use different perspectives according to issue.

So, let’s clear what perspective means about competitive analysis.

If you are a business owner or business developer, competitive analysis means; an in-depth investigation and analysis of your competition allows you to asses your competitor’s strengths and weaknesses in your marketplace and helps you to choose and implement effective strategies that improve your competitive advantage.

If you are a marketer, competitive analysis means; to achieve and maintain a competitive advantage in reaching and selling to your target market, you must posses a through knowledge of your competition. A comprehensive competitive analysis an important part of marketing plan.

UX designers are responsible to achieve both these goals. They have to move according to sales purposes and sustainable brand creating processes. And they have to create customer journeys that serving this aims via screens. This is where the challenge is begin.

Well, what is competitive analysis really means? We saw that there is many descriptions according to vocational perspectives but we also saw that there is one thing that never change in descriptions. Competitive advantage.

Competitive Advantage

What competitive advantage means?

A competitive advantage is, basically, what makes an entity’s goods or services superior to all of a customer’s other choices.

To create a competitive advantage, businesses have got to be clear about these three determinants.

Benefit — What is the real benefit the product provides? It must be something that customers truly need. It must also have to offer real value.

Target Market — Businesses have got to know exactly who buys from them and how they can make customers’ life better?

Competition — Businesses have to identify their real competitiors. Competitiors are not just similar products. They also include anything else customer could do to meet the need they can fullfill.

To be successful, businesses need to be able to articulate the benefit they provide to target market that’s better than the competition.

This is what competitive advantage basically means.

In 1985, Harvard Business School professor Michael Porter wrote “Competitive Advantage” and he outlined the three primary ways companies achieve sustainable competitive advantage. Cost leadership, differentiation, and focus. Porter identified these strategies by researching hundreds of companies.

Cost leadership means companies provide reasonable value at a lower price.

Differantation means companies deliver better benefits than anyone else. Firm can achieve differantation by providing a unique or high quality product. Another method is deliver it faster. A third is to market in a way that reaches customers better. Companies typically achive differantation with innovation, quality or customer service.

Focus means company’s leaders understand and service their target market better than anyone else. But, it needs differantation or cost leadership to do that!

If you are an UX Designer, review your customer with this perspective, catch their competitive advantage and use it to shape digital experience.

Finding Competitive Advantage

…and using that knowledge for the great design!

When it comes to find and define competitive advantage you’ll have two different ways according to qualitative and quantitative informations. Each serves a valuable role in a competitive analysis. Quantitative informations are based on numerical datas, qualitative informations are based on observations. But, for each methods, your way have to come across same crossroad.

The Benchmark.

Benchmark

Benchmarking is the process of comparing the organization, its operations or processes against other organizations in industry or in the broader marketplace.

Benchmark is a huge method with its nearly infinite metrics. As a UX designer, you could use the method with basic metrics for twice. One for to understand the market and find to competitive advantage, another for to compare the competitors’ websites or mobile apps with the design on your mind.

Step by step:

• Compare your customers’ brand with competitors and understand market.
• Find your customers’ competitive advantage.
• Review competitors’ websites/apps and compare with the design on your mind.
• Are your customer’s competitive advantage is cost leadership? Type prices with bigger puntos on website.
• Are your customer’s competitive advantage is differantation? Use more product visuals to highlight the value.
• Are your customer’s competitive advantage is focus? Work hard to find the great language for texts and buttons according to your customer’s specific target market.

That’s what benchmark provides.

Defining a Benchmark Initiative

There are too many ways to create a benchmark chart. I’ll give my favourite formula. You can google it for your special solution.

• Define the subject of benchmark study
• Define the process or attribute to be studied in detail
• Select and define the measures (You really have to google it)
• Select the comparison set
• Collect data on both the benchmark subject and comparison set
• Assess the data and identify differences and gaps (That’s enough for UX Designers)
• Analyze the root causes of the differences of gaps
• Define an improvement initiative, complete with goals
• Communicate the goals
• Implement the improvement initiative and measuring results
• Report on the results, identify improvements and repeating the process.

Identify Best Practices

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.

If all competitors are offering specific content and functionality, users will likely expect your site to offer similar content and functionality.

Learn from their mistakes, avoid “reinventing the wheel” in iterative design process and find a better implementation from where they left of.

An in-depth competitive analysis will provides you these advantages:

• An understanding of how your existing and potential customers rate the competition.
• A positive identification of your competitor’s strengths and weaknesses.
• A mechanism to develop effective competitive strategies in your target market.

The next step of UX Diary will be about Value Proposition. You can click here to follow me and be a part of UX Diary.

Have a nice day!

sources (articles attached as links):

uxdesign.cc, boxesandarrows.com, thebalance.com, thebalancecareers.com