Let’s get real here, if you own a business, you want it to succeed. You crave a fresh small win every now and then, a new milestone. You love the progress and love to gain a competitive advantage in your industry. Competitor and benchmarking research improves your offerings in terms of goods, services, workflows, and output. It helps you to steer clear of other people’s mistakes and pick up tips from the best in your industry.
Tracking your progress and setting realistic, reachable goals is key to gaining this competitive edge. And how do you accomplish that? Benchmarking and competitor research! These two techniques help you evaluate the success of your company and pinpoint areas that require development.
We discuss the differences between competitor research and benchmarking in this article. We go a step further to provide instructions on how you carry out a competitor benchmarking analysis. We also cover rival benchmarking frameworks used to present and discuss your findings. After implementing all we discussed in this article, your competitive position will be a force in the market.
Benchmarking establishes realistic and attainable goals for your business. You get to learn from others and identify the best practices in your field. Benchmarking compares your business processes, products, services, or performance metrics with those of other companies in your industry.
Benchmarking helps you:
- Improve your quality, efficiency, and customer satisfaction;
- Reduce your costs and waste production;
- Increase your creativity; and
- Gain a competitive market share.
Competitor research helps you obtain and evaluate data from your rivals’ offerings, costs, and strategies. This data is used to quantify the strengths, weaknesses, opportunities, and threats of competitors. The goal of competitor research is to comprehend your industry, pinpoint your unique value offer, and create winning tactics.
Competitor research helps you:
- Understand your target market and customer needs;
- Identify your competitive advantages and disadvantages;
- Identify fresh opportunities and dangers in your industry;
- Develop and refine your marketing, sales, and product strategies; and
- Monitor and anticipate your competitors’ next move.
Competitor benchmarking analysis is a combination of benchmarking and competitor research. This technique helps you compare your business with your competitors on specific aspects. It could be the calibre of your goods or services, the cost, or the level of client happiness. Many businesses use competitor benchmarking analysis to compare their efficiency with other businesses.
One of the best lessons on how to benchmark against competitors is seen in Xerox. It’s impossible to mention the top 5 copier firms in the world without Xerox making the list. In 1983, they initiated a program called “Leadership through Quality”. The program focused on competitor benchmarking analysis. Through this program, Xerox was able to identify numerous flaws and execute action plans that showed the program was a success.
Like every other company that has applied competitor benchmarking analysis, Xerox identified its challenges and was able to reap the benefits from a well-drafted program.
Now, how can you leverage competitive benchmarking to expand your business as Xerox did? If you’re wondering how to do a competitor benchmarking analysis, it is important to understand that there are procedures involved in doing a competitor benchmarking analysis before you attempt to undertake one. There are several important questions to address at every stage. How you answer these questions will determine how successful you are.
- Define Your Objectives. What purpose does this analysis serve to you? What aspects do you want to compare? How will you use the results?
- Identify Your Competitors. Who are your direct and indirect competitors? How do they differ from you? How do they affect your business?
- Collect data. What sources of information will you use? How will you gather and verify the data? How will you ensure the data is accurate and reliable?
- Examine the data. What methods will you use to contrast and compare the data? Which equipment or techniques will you employ? How are you going to analyze and present the data?
- Report findings. How are you going to convey and show the results? Which style and format will you employ? Who do you intend to reach?
- Act. What are the main conclusions and suggestions drawn from the analysis? What are the improvement objectives and priorities? How are you going to carry out and oversee the action plans?
One tool that can assist you in structuring and organizing your competitor benchmarking analysis is a competitor benchmarking framework. It offers a straightforward and consistent method for assessing and contrasting your rivals and assists you in defining the parameters, standards, and measurements for comparison.
There are different Competitor Benchmarking Frameworks out there. Your choice of framework depends on the objectives associated with your industry. We listed some here to give you an insight into your options.
- SWOT Analysis;
- Porter’s Five Forces Analysis;
- McKinsey 7S Model; and
- Balanced Scorecard.
Benchmarking and Competitor Research are two distinct but complementary techniques for assessing your company’s performance and strengthening your position in the market. While competitor research helps you understand your competitive landscape and create winning tactics, benchmarking helps you learn from best practices and set reasonable and achievable targets. By combining the two, you may assess your company’s relative strengths and weaknesses, find any gaps, and create improvement plans for your operations.
Take your business to the next level with the right research “combination” today! Researchers.me offers customized and professional market research and insights for all businesses. There’s never a bad time to make your business the best out there!