Abstract: On the basis of the definite concept of product as a whole, it's classification and its fixed constituent essential factors, the factors affecting the competitive power of product are analyzed. According to the representation and evaluating indexes of these factors, the forewarning index system of a series of products in competition can be set up. In the light of the situations of the existing products and enterprises, the warning value of every index in forewarning system can be decided one by one. At the same time, the competition situation value of every product can be calculated by mathematical method. For the purpose of successful forewarning, the analysis should be made on the situation value in a fixed period of time so as to judge the developing trend of the product.