In-Depth Competitor Analysis and Market Entry Strategy for a Social Networking App

Customer

The Customer is an entrepreneur with a startup idea of a social networking app where people would set up personal goals, mark their progress toward the goals, and share the journey with friends.

Startup Idea Needed Feasibility Analysis

Though keen on the app idea, the Customer was wary of investing in the app development. First, he wanted to understand how competitive the app would be on the current market. The Customer approached ScienceSoft for market entry consulting that would help him decide whether the app idea was worth pursuing.

Turning an App Idea into a Business Plan

To address the Customer’s concerns, ScienceSoft offered to take three steps: analyze competitors, conceptualize the app, and plan a project roadmap.

Competitor research

ScienceSoft selected and analyzed 15 competitive social networking apps with 10,000+ downloads. For each app, we studied:

• Functionality. We defined fundamental features that made the core of all the apps and killer features that differentiated certain apps and represented their competitive advantages. For example, all competing apps allowed for manual tracking of goal completion while only some added convenience by integrating an app with a smartwatch and enabling automated tracking of physical activity for sports goals.
• App support costs. We roughly estimated the competitors’ operational expenses connected with their apps’ support. We used LinkedIn as a source of information about the apps’ development offices and factored in open development/support vacancies. We applied average salaries for the teams’ positions and thus got a rough monthly cost of the apps’ support.
• Advertising expenses. The only competitors’ marketing channel that can be assessed more or less accurately is advertising. To calculate a rough advertising budget for the competing apps, we tracked their advertising traffic to app stores and multiplied it by the average cost-per-click rates for the main advertising keywords. The figures indicated the minimum marketing budget that our Customer would have to invest to compete.

Upon the competitor analysis, we prepared a comparison table with all the findings. The table presented the competitive landscape and rough estimates of how much the competitors were paying to keep their apps operational and popular.

App’s conceptualization

Based on the analysis of the fundamental and killer features of competitive apps, we planned the functionality of the Customer’s app and created UI mockups to show how the app would look and function. When the app’s concept was put on paper and agreed with the Customer, we provided the development cost estimate.

Project roadmap creation

By planning a project roadmap, we helped the Customer move from the big picture of its app development project to an actual action plan and realistic expectations. In the roadmap, we reflected:

• Duration of each stage of the app development life cycle and the total length of the project.
• Team composition with the description of each team member’s role and contribution and the number of required FTEs.

Providing the Foundation for Customer’s Informed Decision

In just three weeks, the Customer got a clear understanding of the competitive market and a rough estimation of the development, support, and marketing investments needed to compete confidently with a new app. Now, the Customer has all the information needed to make a carefully weighed decision on its startup. If the Customer decides to go on with development, he can use the app’s functional concept, UI mockups, and a development roadmap provided by ScienceSoft.

Methodologies

Q&A sessions, market research, business requirements analysis, functional decomposition.