Competitor Analysis For Product Software
The final major area of analysis in market analysis is the industry itself. By knowing what is happening with competitors, a software company can adjust strategies to be more successful in the marketplace. Companies should know about market share percentages, strength and weaknesses, industry structure, and strategic groupings among other things to get a good picture of what the competitive environment is like. Strategic groupings can be in the form of alliances between product software firms.
Competitor analysis is especially important when it comes to new product introductions. There are many advantages, especially for revenue, for a software company that can show major enhancement to software or be first to market (Messerschmitt & Szyperski, 2004). This makes competitor analysis particularly important because it can help a firm decide which new product opportunities to pursue by what the market size will be following the actions of other competitors. Research has shown that knowledge about the competitors’ strategies is very important to help distinguish failures from the successes in product software (Cornish “Product”, 1997). Knowing what is going around in the software industry is essential for software firms to be successful. Firms need to know which other software products their product must work with (e.g. operating systems) to provide the most usability for the customer. Therefore, developing and sustaining of architectural control can lead to competitive advantage (Messerschmitt & Szyperski, 2004).
One author has made a list of industry characteristics for product software that affect marketing strategies: emerging fragmented industry, end user competition and imitation, high level of research and development intensity, high degree of integration with hardware, high degree of specialization, complementary with hardware and computer services, high level of maintenance and marketing costs (Rao & Klein, 1994). Competitor analysis is available to explore these areas and others in greater depth to help a software firm determine their future goals and strategies.
Some techniques to conduct competitor analysis are:
- Brand strength analysis
- Market Share Analysis
Read more about this topic: Market Analysis For Product Software
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