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.