Why is it important to understand the competitive position of the company's product in purchasing the shares of the company?

When investors buy shares in a company's stock, they
expect the value of that stock to rise so that they can make money.  In order to
determine which stocks' values are likely to rise (and therefore which stocks to buy)
investors need to know something about the competitive position of the firms' products
in their various markets.

A firm whose products are in a
strong position would, all other things being equal, be a more attractive investment
than one whose products are in a weak position.  Of course, an investor must look at the
position of these products going forward, not in
retrospect.

One factor in whether a company's stock prices
will rise is the competitive position (in the near future) of its products.  Therefore,
this is one thing that investors must consider when choosing stocks to
buy.