All products have competition. Today, your target market has a solution they do already for the problem you are trying to solve for however your product may make that process easier, more affordable, more efficient, require less time, or other ways you have identified to add value to your user.
As a product manager you should always assume your customer has a way to complete the use case you are trying to provide for without you. The challenge the product manager faces is to ensure the product they are working on offers more value than the current competition. To do that, product managers need to be an expert on their competitors to know the strengths, weaknesses, how they differentiate from competition, and how they are offering similar features to the same audience.
Competitors, like you, are constantly working on their product and so while most companies create an initial list of competitors that they create and drop out on a spreadsheet somewhere to be forgotten, you need to be more active in reviewing on a normal basis your competition to ensure you are current with what they are doing. You may see that while you focused on a specific feature option for your product, they went in a different direction. This could create a risk or opportunity for you as a product team but if you do not track and monitor your competition you could be losing group to them and not know it.
So how should a product manager track their competition?
When it comes to tracking your competition the first thing you want to do is think about the problem you are solving. Complete user interviews to ask your customers or potential customers how they solve that problem today. Research the answers you give to begin creating a list of all of the product options that overlap your product features. Once you have a list of competitors, it is time to start rolling up your sleeve and getting data about them.
You should minimally track the following information about your competitors as a product manager:
Type of competitors: Not all competitors are direct competitors. Many times products that span many features may have niche competition on specific feature offerings. You may want categorize your competitors to be broken down by full competitor, niche competitor and even go deeper to call out the specific niche that they compete in.
Rank your competitors: There may already be a top dog in your space and some always nipping at heels on the bottom. Stack out your competitors to make sure you focus your energy on ensuring you are climbing the ladder and working your way to compete with the top.
Last Review: You should be checking in with your competitors on a normal basis. Track when it is you last reviewed them and remind yourself to check back in once a quarter.
Description: This can be a general definition of what is the competitor. What is the messaging/branding and their target audience as it compares to yours.
Best Feature: What is it that this product or competitor hangs its hat on. If someone thinks of this product, what comes to mind first.
Missing Features: Within their niche or offering what makes them weak or missing features that you feel are important for that product to have to stay competitive
Differentiation: At the end of the day, what makes you different from this competitor. What features do you have they do not. What target audience differences? Pricing? Other differences that if you had a customer hold you and them up next to each other, what would stand out as a difference.
All of this data can be simply bullet points that you track for each topic and as you do your quarterly check in with your competition keep this up to date. You may find as you do your competitor research you find nuggets of ideas for your own product and generate feature backlog items of your own product from looking at your competitors. There is never a need to reinvent the wheel. If a competitor has a great solution for a pain point, replicate it and track it as a backlog item for your product.