run-competitive-analysis

name	run-competitive-analysis
description	Use when evaluating market position, planning a product strategy, or preparing for a fundraise or board review
source	Michael Porter "Competitive Strategy" (1980); Clayton Christensen "The Innovator's Dilemma" (1997)
tags	["competitive-analysis","porter-five-forces","jobs-to-be-done","market-research","positioning"]
verified	true

Run Competitive Analysis

Systematically map the competitive landscape to identify where your product can win and where it cannot.

Why This Is Best Practice

Adopted by: McKinsey, BCG, HBS MBA curriculum, Google strategy teams Impact: Porter's Five Forces framework is cited in over 7,000 academic strategy studies and underpins competitive strategy at Fortune 500 planning cycles

Why best: Structured competitive analysis prevents both overconfidence (ignoring real threats) and underconfidence (competing on dimensions customers don't value). Jobs-to-be-Done extends it by revealing who you truly compete with — often different from who you think.

Steps

1. Define the competitive scope — Specify what job the customer is hiring a solution to do (JTBD). List direct competitors (same category), indirect competitors (different category, same job), and the status quo (doing nothing).
2. Apply Porter's Five Forces — Rate each force (threat of new entrants, supplier power, buyer power, substitutes, rivalry) as low/medium/high with one supporting data point each.
3. Build the comparison matrix — List competitors as columns. Rows = dimensions customers use to decide (price, performance, support, integrations). Score each on a 1–5 scale with evidence.
4. Identify strategic groups — Cluster competitors by similar strategies (e.g., enterprise vs. SMB, full-suite vs. point solution). Spot gaps between groups where no one competes.
5. Assess competitor trajectories — Review recent funding, hiring (LinkedIn), product releases, and pricing changes. Infer where each competitor is heading in 12–18 months.
6. Pinpoint your winning condition — Choose one or two dimensions where you can genuinely be best-in-class. Avoid competing on every dimension.
7. Validate with customer interviews — Ask 5–10 customers: "What did you consider before choosing us? What would make you switch?" Use verbatim quotes to sanity-check the matrix.

Rules

• Include the status quo ("do nothing" or "build in-house") as a competitor row.
• Every score in the matrix needs a cited source or customer quote — no opinions.
• Reassess the full analysis at least once per quarter in fast-moving markets.
• Separate features from outcomes when filling the matrix; customers buy outcomes.
• Do not share the raw matrix externally; it contains strategic assumptions.

Examples

When Notion entered the note-taking market, the JTBD lens revealed their real competition was Confluence (team wikis) + Google Docs (documents), not just Evernote. This insight drove their "all-in-one workspace" positioning rather than a pure note-taking angle.

Common Mistakes

• Only analyzing direct competitors — Ignores substitutes and the status quo, which are often the biggest competitive threats.
• Matrix without evidence — Scores based on internal opinion, not customer data, produce false confidence.
• Static analysis — A six-month-old competitive matrix is misleading in markets where competitors ship weekly.

When NOT to Use

• Do not use this framework when the product is in pure discovery mode with no validated problem — competitive analysis before problem-market fit anchors design to incumbents and blinds you to novel solutions.
• Do not run a competitive analysis as a substitute for talking to customers; matrix scores derived entirely from marketing pages and analyst reports reflect competitor messaging, not actual customer experience.
• Do not apply Porter's Five Forces to an internal tooling or platform decision where there is no external market — the framework assumes market competition and produces misleading outputs when applied to build-vs-buy or internal prioritization questions.