Copyability in making feature decisions

A brief conversation between me and a coworker the other day:

Coworker: "That's something that Company X doesn't do.  We can differentiate with that."
MNJ: "But it's something that they could easily do."
Coworker: "But they don't do it."

When looking at points of differentiation between you and your competitors, there are two important classes of copyability: easy and difficult.  If your underlying structures are the same, it's usually easy for the competition to copy something.  But, if the feature requires either technical or conceptual changes to the product, then it's not nearly as interesting (from a competitive perspective).  For example, I'm not impressed with search companies who simply change the search interface without altering the underlying data.  If an interface happened to take off, it would be simple for Google to copy it.  On the other hand, if a company alters the data within the index, a major search player could take months or even years to replicate the feature.

In the end though, competition is useful when analyzing external reaction to your product, but user needs should drive your features.  The copyability of the feature shouldn't trump what your customers want.