Most people are familiar with the concept of a competitive analysis; it's a fairly standard business term to describe identifying and evaluating your competition in the marketplace. In the case of UXD, a competitive analysis is used to evaluate how a given product's competition stacks up against usability standards and overall user experience. A comparative analysis is a term I've often used to describe the review of applications or website that are not in direct competition with a product, but may have similar processes or interface elements that are worth reviewing.
Often, when a competitive review is conducted, the applications or websites are reviewed against a set of fairly standard usability principles (or heuristics) such as layout consistency, grouping of common tasks, link affordance, etc. Sometimes, however, the criteria can be more broadly defined to include highlights of interesting interaction models, notable functionality and/or other items that might be useful in the context of the product being designed and/or goals of a specific release.
Why Conduct a Competitive Analysis?
Understand how the major competition in your space is handling usability
Understand where your product stands in reference to its competition
Idea generation on how to solve various usability issues
Get an idea of what it might take to gain a competitive edge via usability/UX
If a thorough competitive review has never been conducted.
When a new product, or major game-changing rebuild is being considered.
Annually or bi-Annually to keep an eye on trends in your industry and on the web (such as changes in how social networking sites are integrated)
When is a Competitive Analysis Most Useful?
Competitive analysis is best done during early planning and requirements gathering stages. It can be conducted independent from a specific project cycle, or if used with a more focused criteria, it can help with the goals for a specific release.
Limitations of a Competitive Analysis
A competitive analysis can help you understand what it will take to come up to par with your competitors; however, it cannot show you how you can innovate and lead.
Insights can be limited by the knowledge level and/or evaluation abilities of the reviewer.
They can be time consuming to conduct and need to be re-done on a regular basis.
