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.