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Understanding Competition

Here are some techniques for assessing competition.

SWOT Analysis

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis aims to identify the internal and external factors that are favorable or unfavorable to achieving Strategic Goals for a company or product organization. The Evidence-Based Management Guide describes Strategic Goals as important things that the organization feels it needs to achieve to realize its Mission and Vision. These goals are so big and far away.

SWOT is useful for strategic planning, competitor evaluation, marketing and business model refinement. It requires regular updates so that an organization can stay on top of market conditions and ahead of their competitors.


Image source: Wikipedia

Market Share Analysis

Analyzing how much of the market each competitor controls, can provide insights into a product's viability and its Unrealized Value, the potential future value that could be realized. Changes in market share over time can also indicate how competitive dynamics are changing. This can be further explored by reviewing Market Segmentation and reviewing the organization’s competition in the industry, the Key Players.

Value Chain Analysis

A value chain consists of multiple stages of a product’s lifecycle, like research and development, sales, marketing, and everything in between. Value chain analysis helps identify product activities that add value to their final product. By comparing these activities to those of their competitors, organizations might discover competitive advantages or areas that need improvement. For example, by breaking down each step of production and delivery, an organization can identify areas for improvement like cost reduction or differentiation and sources of competitive advantage.

PESTEL Analysis

PESTEL is an acronym for Political, Economic, Socials, Technological, Environmental and Legal. It is a tool that evaluates these macro-environmental factors to consider what potentially impacts a business. By analyzing these areas, companies forecast changes in their business environment and should adjust their strategies accordingly. 



Image source: Oxford College


Tips for Understanding Competition

  • Analyze competitors' strategies and weaknesses. Keep an eye on how competitors address similar issues and what gaps they are ignoring
  • Be ready to adapt your strategy to new information or changes in the market. Innovate continuously
  • Understand where your organization and product is in relation to its competitors and plan future business strategies based on market position
  • Use Sprint Reviews and Product Backlog refinement to discuss strengths, satisfaction gaps and opportunities with Scrum Teams and stakeholders

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Knowing your competition and the dynamics of your competitive landscape are essential to help your organization thrive. This content includes different models to understand the competitive landscape and tips on how to act on that information to build a competitive advantage. This information is vital for effective product management.