I think competitive analysis is one of the most difficult jobs that most often falls into the realm of responsibility of the product manager. Getting enough data is always difficult, but presenting it in a way that is useful to sales force is the real challenge. Sales people always want the magic competitive analysis bullet that will let them kill the competition. But it doesn't work that way. The sales person has to use the data you give them to build a vision of why your product is superior.
This document covers writing competitive analysis for consumption by sales people. Competitive analysis for product planning use will require the same research, but will be delivered in a different form.
Your sales staff is the target audience. If you have a direct sales force, you can provide some detail as they are generally willing to read through more information (depending upon how many products they sell). However, if you sell through channels, your competitive analysis must be very short and to the point. Sales people generally don't have much time to pour over competitive information, but if you use sales engineers to help sell your product, they will need technical details on weaknesses of the competition. They need to quickly understand the weaknesses of a given competitor and how to position your product's strengths against that competitor. Be sure to outline your target audience before starting so that you can review your materials with them in mind.
The most obvious place to get the information on competitors is from their website. You can always find datasheet type information on the website. Pay attention to what isn't listed in the datasheet. If it isn't listed as a feature, it may not be available from the vendor. Some vendors have manuals on their websites with release notes that are rich with strengths and weaknesses of the product. However, there is no better way to do competitive analysis than to buy the competitors product and try it out yourself. Depending upon the price of the hardware/software product, this may not be very easy to do.
In addition to features of the product, you may want to include some information about the health of the competitor's company. Press releases will tell you if they are venture funded and when they raised the last round. Job listings will tell you if they are hiring and growing as an organization.
Using a consultant to pose as a prospect will also get you more information. I hate when this is done to me however, so I don't do it. I also warn my sales people about this so that they are careful to dig into the background of the prospect and understand the company they are representing. But a good con-artist can always make it through and waste the sales person's time and get lots of information about strengths and weaknesses.
Over the years I have used very different formats for competitive analysis with varying degrees of success. Unfortunately, I haven't found a standard that works for every company. A matrix is best for hardware products and sales channels. More complex products require an understanding of competitive strategies. Sales engineers want technical details and sales people want high-level, broad-brush positioning in their competitive analysis. The list below is very comprehensive. How much of this information that you include in your competitive analysis is dependent upon your target audience. The only mandatory items are 1 and 2.
I have had some success with using a format for a competitive guide that has all the strategies numbered upfront, followed by a section for each competitor. In the section for each competitor, the first paragraph is the positioning summary (including strategies by number to use against the competitor), followed by detailed bullets on strengths and weaknesses, and then more general information. On any type of sales document, never save the best for last. Always write these documents believing that the first paragraph is the only one that will be read.
Any electronic form of competitive analysis is dangerous. But any paper-based form is difficult to keep updated. An internal website is one method of delivery that companies use for this information. The risk is that a sales person may cut and paste directly from the site into an email. The decision about how this very sensitive information is distributed should be made by the executives in your company.
When I was doing competitive analysis as a consultant, it was quite a luxury. I would get the top six competitors, do research, order products, install and use the product, then write the documents and wrap them up nicely in a binder for the sales meeting. Few product managers have that luxury with time. Often times, the sales people are screaming about some new competitor that they know nothing about. The product manager does a little web research and whips off an email to the field. The email gets filed away and no one can ever find it again. I think it is important to be a little more structured in the presentation of competitive information. Below is a basic process for this structure:
Format and delivery is something that I have always struggled with for competitive analysis. Especially in this day and age of dynamic web content. But I have finally found a wonderful way to present this information - in a LiveBinder. If you are familar with this site and with me you will know that I am a co-founder at LiveBinders, but it really is the best tool for the job! When I use it for competitive analysis, I put a competitor in each tab with my comments on our positioning and differentiation and it is updated dynamically. Using the 'share' feature, I can easily email my competitive binder to a potential investor.
To get a better feel for how this works, check out my Competitive Binder: