Competitive
benchmarking is the technique of measuring your company against many
competitors using a set collection of metrics. It is used to calculate the
performance of a company and compare it to others over time.
It will often
include looking at the practice behind these metrics as well. It means
companies can define 'best practice' for specific metrics and compare this to
their approach. It also is a crucial step of competitive analysis.
The benefits are
clear.
Not only can you
get a sorted summary of your company and how it performs on different levels,
but it also encourages you to be competitive. Benchmarking means you can
quickly identify when a competitor is doing well or beginning to struggle,
which could help you evaluate your strategy.
Competitor benchmarking
of companies can be done based on various business factors:
- Technology/Product Excellence: In this space
of analysis, companies are studied based on their technological strength
and the product strength and related aspects. There are various parameters
which can we looked at to evaluate the company’s technology strength:
- Breadth and depth analysis: Identification of variety or type of products
offered by a company, which is indicated as breadth. Then, the variant for each product will
be identified, which is indicated as depth. The graphical plotting of all
the variants lead to effective understanding of the company’s breadth and
depth analysis.
- Features and functionalities: The
benchmarking of technologies' critical features from different companies'
parameters will be identified, such as operating features, safety
features, and additional features.
- Product quality and reliability: this
parameter is very critical one to analyse as there are several components
to it. In quality mapping we could consider design, specifications
efficiency, etc. Also, while mapping reliability we could consider
several components like complaint handling, audit compliance, continuous
improvement, etc. Since certain components are difficult analysis being
their subjective nature, it becomes critical to do this analysis. We
usually encourage it to be complemented with social media analytics to
understand the customer perception.
- Technology Innovation/trend/strategy: In this
section we analyse the company’s innovations in recent past and try to
gather the trend and strategic move by the company to lead and disrupt
the operations. Mapping the innovations and technology strategies is a
key aspect of this analysis. This is followed by analysing the company’s
patents and identify the overlapping and distinctive technology focus
among different payers.
- Business Excellence: In this space of
analysis, companies are studied based on their business strategy
excellence. This will help in understanding the company’s’ viability,
scalability, and a dominance over the industry. There are various
parameters which can we looked at to evaluate the company’s business
excellence:
- Geographic Footprint: This analysis will be
carried out based on the reach of products across geographies, which will
be identified by analysing the company's sales office distribution,
regional brands, and distribution networks in different landscapes. The
geographic footprint will be determined for each company's product by
indicating local to global.
- Distribution Channel: It will be analysed on
two parameters, distribution channel level and distribution channel type.
Distribution channel levels could be anything ranging from zero level to
three level distribution which is identified based on the number of
intermediaries involved.On the other hand, the channel type could be
exclusive, selective, and intensive based on how the company is engaging
with the distribution.
- Financial Capability: Based on the
benchmarking of financial data of companies, parameters will be
identified, such as total revenue, parent market share, R&D
investment, and EBITDA.
- Growth Strategy: Company’s growth strategy
plays a key role in understanding the direction of company’s growth. There
are several types of strategies. Majorly the analysis will be based on
short term strategies and the generic strategies.
- Generic
Strategies: Generic growth strategies are usually classified in two major
categories, viz. organic strategies, and inorganic strategies.
- Organic
strategies: Organic growth strategies are nothing, but the strategies
adopted to seek the growth from within. In this, the companies are
increasingly reply on the in-house capabilities and strength. The major
organic growth strategies are product launch, product development,
expansion, investments, etc.
- Inorganic
strategies: Inorganic growth strategies are the ones which arises from
engaging with external forces and parties and utilising their
capabilities to complement existing processes. Some of the key inorganic
strategies are joint venture, merger and acquisition, collaboration,
partnership, external contracts, and agreements, etc.
- Short-term
growth strategies: Strategies adopted by the companies to address the
short-term agenda which could be business strategies, operating
strategies and/or others. Major idea in this analysis is to identify the
current focus of different companies by understanding their intent of
such strategies which could be quick revenue generation, improved
profitability, maintain cash flow, better customer engagement, etc.
- Productivity and Cost-Efficiency: It will be
analysed on three parameters: Productivity of the company, company
efficiency, and selling cost of the product.
- Customer Value Creation - Based on various
technologies' commercial and technological aspects from different
companies' benchmarking, parameters will be identified. Parameters will be
segregated into three criteria which are indicated as follows:
- Identification: In this criterion, a
parameter used to identify the criteria to purchase or adapt any
technology will be covered.
- Quantification: In this criterion, a
parameter that is improvising operating conditions or features will be
included.
- Implementation: In this criterion, a parameter that will create additional value as the output of the technology will be covered.
Find out how to
perform competitive benchmarking services for your business
and stay ahead of your competitors in the market. Contact us now.
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