Master Competitive Analysis: From Strategy to Product Improvement

Why Write This Article

Two colleagues discussed the uncertainty of buying personal insurance and realized that comparing competing products—"shopping around"—is a useful approach not only at work but also in daily life.

Competitive Analysis Is Not Just Shopping Around

Originating from economics, competitive analysis is now widely used in internet product lifecycle design. During PRD or design reviews, stakeholders often ask about competitors' directions and implementations.

The significance of competitive analysis is explained in two dimensions—product and personal—by Zhang Zaiwang in "Effective Competitive Analysis".

Goal‑Oriented Thinking (Begin with the End)

Inspired by the second habit in "The 7 Habits of Highly Effective People", a clear goal ensures the analysis stays on track.

How to Conduct Competitive Analysis

Define the Goal

Identify the product’s stage in its lifecycle and its user characteristics, then understand "self" before "others".

Lifecycle Stages

Start‑up stage : Verify demand and business model using Porter’s Five Forces, PEST, SWOT, etc.

Growth stage : Shift from business to experience orientation; use KANO model to discover user‑desired and attractive features.

Mature stage : Optimize functions and content to meet both experience and commercial goals, continuously monitor core competitors.

Selecting Competitors

Choose competitors based on analysis purpose—brand, category, or substitutes. For example, when analyzing Ctrip hotels, consider Qunar, Meituan Hotels, Fliggy, Airbnb, Tujia, etc.

After selecting competitors, classify them using appropriate dimensions and filter according to your product and user traits.

Analytical Framework

For growth and mature products, the five‑layer model from Jesse James Garrett’s "The Elements of User Experience" is recommended.

Strategic Layer : Define product positioning, business model, core value for users and the company, and relationships among platform, merchants, and users.

Scope Layer : Identify basic elements and core capabilities, deduce main and supporting functions, and understand their architectural relationships.

Structure Layer : Map information architecture and classification, distinguishing complex SaaS/ops products from simpler TOC‑type products.

Framework and Presentation Layers : Decompose pages into modules, components, elements, and atoms; use a checklist comparison to focus on core competitors and ensure comprehensive analysis.

Guidelines for Quality Analysis

Apply critical thinking using usability criteria, iOS design standards, and visual design norms; refer to Nielsen’s ten usability heuristics.

Using Competitive Analysis for Product Improvement

Early‑stage analysis should produce preliminary conclusions, discussing scope and business to avoid later rework.

During the product framework and information structure phase, output product architecture diagrams and user flow charts, offering multiple solution options with pros and cons.

In the iteration review phase, compare competitor strengths and gaps ("they have, we lack"; "both have"; "we have, they lack"), focusing on unique advantages and proposing design strategies aligned with user needs.

Personal Reflections

Effective analysis is less about the number of competitors and more about delivering insightful, actionable recommendations that can be implemented, forming a complete loop from opportunity discovery to execution.

Competitive analysis is essential but not sufficient; understanding your own product’s characteristics and user scenarios remains paramount.

References

Garrett, J. J. – "The Elements of User Experience" (translated by Fan Xiaoyan)

Zhang, Z. – "Effective Competitive Analysis"

Covey, S. R. – "The 7 Habits of Highly Effective People"