Feb 2022
Originally Published: February 2022. Updated June 2024
Forget what you’ve heard about needing a groundbreaking app idea to succeed. The truth is even the simplest concepts can thrive with the right validation strategy. At InspiringApps, we’ve seen countless app ideas, from the revolutionary to the seemingly mundane, transform into successful digital experiences. The secret lies not in the idea itself but in the thoroughness of the validation process.
Competitive market analysis involves gathering and analyzing information about your competitors, target market, and industry to inform your business decisions. Essentially, it’s a feasibility study that ensures you’ve got the right product to deliver to the right market at the right time.
Imagine you’ve got your competitor list, and your app idea is beginning to take shape. But you haven’t conducted a deeper market search, and there are hidden competitors that can be found with a closer look. You can learn a lot from the competition, and that’s why the competitive market analysis (CMA) is so instantiated and important in the product-building process.
In addition to assessing the feasibility of your app, by conducting a thorough analysis, you can:
Before discovery in the app development process, there’s a pre-discovery stage. We’ve discussed defining user personas and user journey mapping and provided insights into app marketing, app design, and development processes. Still, there’s research to be done before you even approach the discovery stage. That research represents competitive market analysis.
Validating app ideas is an essential step, and competitive market analysis is the tool you need to ensure feasibility.
To begin your competitive market analysis, take a deep dive into the industry landscape:
Look for trends that are shaping the industry, such as the adoption of new technologies, changes in mobile usage patterns, and shifts in consumer behavior.
For example, if you’re developing a mobile gaming app, you might find that the industry is experiencing rapid growth due to the increasing popularity of smartphones and the rise of casual gaming. You may also discover that augmented reality (AR) and virtual reality (VR) technologies are gaining traction in the gaming industry, providing opportunities for innovation.
Once you’ve gained a broad understanding of the industry, it’s time to focus on your competitors. This crucial step involves more than just identifying who they are; it’s about understanding their strengths, weaknesses, and overall market positioning.
Start by identifying both your direct and indirect competitors:
This comprehensive view ensures you don’t overlook potential market threats or opportunities.
For each direct competitor, delve deep into their operations. Analyze their market share, business model, and revenue streams. Look closely at their app features, user interface, and overall user experience. Assess their technological capabilities, such as app performance, speed, and compatibility with different devices. Look for any unique selling points or differentiating factors that set them apart from other players in the market.
Next, evaluate your competitors’ marketing strategies. This includes examining their pricing models, sales channels, and promotional efforts. Analyze their target audience, branding, and positioning in the market. This information can provide valuable insights into effective strategies within your industry and help you identify potential gaps or opportunities.
A useful tool in this process is the SWOT analysis. For each key competitor, identify:
Through this thorough analysis, you’ll be able to identify market gaps where your product can fill a need or provide a better experience. You might discover areas where competitors are falling short or identify user needs that aren’t adequately addressed. This knowledge is invaluable in shaping your app’s features and positioning.
Remember, the goal of competitor analysis isn’t to simply copy what others are doing. Instead, use this information to understand the market landscape, learn from others’ successes and failures, and find unique ways to meet user needs. By doing so, you’ll be better positioned to create an app that competes effectively and stands out in a crowded marketplace.
Armed with a solid understanding of your industry, competitors, and target audience, you can now identify market opportunities for your app.
Look for gaps in the market that your app can fill, such as a specific user need that current competitors are not addressing effectively. Identify emerging trends that your app can capitalize on, such as the growing demand for personalized experiences or the increasing adoption of a particular technology.
Consider the barriers to entry in your market, such as the need for significant upfront capital investment, specialized technological expertise, or established brand recognition. Assess whether these barriers could hinder your app’s success and develop strategies to overcome them.
Stay informed about emerging technologies that could impact your app’s market, such as artificial intelligence, machine learning, or blockchain advancements. Explore how these technologies could be leveraged to innovate and differentiate your app from competitors.
Finally, consider any regulatory factors that may influence your app’s development and launch. Ensure that your app complies with relevant data privacy and security laws, such as GDPR or CCPA. Stay updated on any industry-specific regulations or guidelines that may affect your app’s functionality or user experience.
Achieving product-market fit is essential for the success of your mobile app. Product-market fit occurs when your app satisfies a strong market demand and effectively solves a problem or meets your target audience’s needs. Validating your app idea through competitive market analysis helps ensure you’re building an app that aligns with user needs.
One common mistake many app developers make is focusing on a cool feature rather than addressing a genuine user need.
For example, let’s say you’re developing a fitness app with a unique feature that allows users to create custom 3D avatars. While this feature may seem innovative and exciting, it may not contribute to the app’s overall success if it doesn’t address your target audience’s core need or pain point. Perhaps they need personalized workout plans, easy-to-follow video tutorials, or integration with popular wearable devices.
By prioritizing features that solve real user problems, you’ll be more likely to achieve product-market fit and create an app that resonates with your target audience. Focus on identifying your target users’ key problems or needs and develop features that directly address those needs.
Thorough competitive market analysis is the key to validating your app idea and setting it up for success. By understanding your industry, competitors, target audience, and market opportunities, you can make informed decisions that differentiate your app and position it for growth.
We’ve created a tool to help guide your competitive market analysis. Download the free, ungated Competitive Market Analysis Checklist to ensure you cover all the essential elements as you validate your app idea.
InspiringApps: A Business Perspective on Building Mobile Apps was written to help you evaluate ideas and turn the best ones into a genuinely successful app for use within your company or for consumer sale.
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