When it comes to competitive intelligence, the focus is often on your competitors and less on your own company as an ambitious entity. Competitive benchmarking is the step in which we consider your company’s abilities in comparison to your competitors. Everyone’s competitors hold a different level of competence, posing more or less of a threat depending on how well your company is prepared to handle them. By taking into account a competitive benchmarking analysis your company can have a better understanding of competitors as well as how much of a realistic threat they pose.
Competitive Benchmarking and the Competitive Intelligence Process
Competitive benchmarking is a process that fits well into the competitive intelligence process. Competitive intelligence is the process of researching competitors, and the market as a whole, in order to analyze and draw conclusions on where your business should go in the future in order to take advantage of available opportunities or avoid oncoming threats. Competitive benchmarking focuses on the competitors of your industry and evaluating your actions based on where they stand in the market.
By looking at competitors of all sizes and competitive capabilities we are able to get a better understanding of what their long term goals are and how they are able to achieve them. If you are a newer business, competitive benchmarking can be a great way for you to look at long standing competitors and get an idea of a realistic timeline for your operations.
Competitive benchmarking and competitive intelligence coincide to help improve each other’s overall output. Competitive benchmarking can offer better insight into competitor comparisons while competitive intelligence can offer the research to determine an accurate analysis.
Just because competitive benchmarking and competitive intelligence can work together in accomplishing the same overall goal, improving internal efforts based on external factors, they don’t necessarily operate together exclusively. You don’t need to complete a full competitive intelligence analysis just to get competitive benchmarking insight. So if you are looking to find out where you stand in the grand scheme of industry competitors we can provide you with that insight specifically.
Steps of Competitive Benchmarking
Like any benchmarking process, competitive benchmarking utilizes four major steps. The four main steps of benchmarking are as follows:
These steps cover the main aspects of benchmarking and can be broken down into multiple substeps. When it comes to benchmarking, of any kind, it is important to understand the full process before jumping straight in. This is why we take into account the intentions of our benchmarking process and set goals before we start.
Competitive Benchmark Planning
The first step in benchmarking is to make a plan. Making sure you know what your goals are, what you are looking to figure out, and who you will be using as benchmarkers are just some of the components to keep in mind when starting a benchmarking analysis. It’s important to keep in mind these factors as they are the real reasoning behind this analysis. Without a clear understanding of what you wish to achieve with competitive benchmarking you run the risk of overlooking crucial factors or getting distracted from your real goals.
What do you want to benchmark? There are many different benchmarks to assess and you can choose multiple categories to study. Do you want to see how effective a new technology is? How long an expansion project might take and how lucrative it would be? Which demographic is worth reaching next? These are just some of the possibilities of what can be assessed. Knowing what you want to achieve from the beginning is crucial to getting the most value out of competitive benchmarking.
When it comes to picking competitors to use for your benchmark there are a few factors to consider. Depending on what your overall goal is this may shift a little but it is important to consider a realistic, yet encompassing, range of competitors. In order to have a benchmark that provides you with the best results, it’s important to include the right kinds of competitors.
The kinds of competitors that contribute to a good competitive benchmark are comparable to your business in its current standing and those who are established as well as, in some cases, newer competitors in your market. It is good to build a benchmark off of comparable competitors because they are most like your business. Comparable competitors are competitors who are of similar size, in direct competition, and/or started from similar situations as you. Seeing how successful or struggling their efforts can be is a great way to estimate how likely your own success will be if your company takes similar action.
Being able to learn from other company’s mistakes is a great way to ensure you do not make those same mistakes. That is why it’s great to consider long established competitors as well. You may be a younger company that has done relatively well in your first few years of business but there are probably long time competitors who have stayed relevant for decades, if not centuries. These kinds of competitors are great to learn from because you can see how they have evolved and adapted to change. Companies that have survived economic struggles, shifting consumer tastes, and technological advances. Being able to adapt and shift with trends is something that any company should want to implement into their management system to ensure longevity.
While you can learn a lot from long established businesses, it’s important to keep in mind that no one is guaranteed to hold the market share lead forever. In order to maintain success you need to be focused on the future as well. This is why it is important to include new and upcoming businesses in your benchmark as well. In order for someone to break into a market, especially if it already has tight competition, means that company must be doing something different. That’s not to say that their new tactic won’t eventually play out to just be a passing trend but there’s a good chance a newcomer can make lasting changes to an industry, even if they don’t stick around. Learning new habits and tactics from seemingly inconspicuous competitors is a great way to track which strategies are worth implementing into your own business.
Now that we have our objectives and competitors in mind we can start researching. ArchIntel prides itself on the research it provides. We are highly experienced in finding information from all sorts of different sources. We look into everything from financial reports, consumer insight, and publicized headlines. By getting an all encompassing outlook on an industry we can draw conclusions that are comprehensive and conclusive.
Competitive Benchmark Analytics
Once you have a plan set in place and have collected information it’s time to analyze. By drawing trends and correlations from the sources we research we can actually back up and theories we might have about which direction to go in or which competitors pose the most threats.
There are two major components when it comes to analytics: assessing reasoning and goal evaluation. Assessing reasoning is finding out why certain trends have become apparent. What is causing a business to succeed? What is leading to their downfall? Knowing the reasoning behind the outcome is far more valuable because it can be a learning lesson for your own business and the actions they take.
Goal evaluation is taking these reasonings and seeing how they apply to your goals. At this step goals can be adjusted or amended to fit realistic expectations. Now that you have all the information you need and the reasoning behind it you can see how your goals can be achieved. It would be a waste of analysis if you could not find a way to apply this new information to your business. Even if the conclusion is that you should continue doing things as you have, it is still reassuring to have solid information to back that strategy up.
When it comes to data analytics, over 73% of businesses invest more than 20% of their technology budgets on intelligence and data analytics. This is a substantial investment that has become the norm across many industries. Many companies find the value in intelligence and analysis as it is the determining factor that supports decision making more than any other action.
Competitive Benchmark Integration
Integration is an intermediary step that is vital to making the entire benchmarking process work. During the integration step information is communicated between all decision making parties as it is now digestible and comprehensive to a wider base. This is where we will bring you our findings in order to give you everything you need for decision making.
Like the analysis step, there are also two substeps to integration: communicating findings and adjusting goals. Now that we have our results of research and analysis we can share with you what we have found out. Just like with our competitive intelligence reports, we make sure information is presented in a clear and concise manner so that you can share it with your team at ease.
Communication is vital when it comes to good decision making. The information can all be there but if not everyone is on the same page it won’t make a difference. We know that most business decisions are not easily made and often need committee approval. By providing hard evidence to support your decisions we hope you can leave a board meeting with the approval to move on with your plans instead of a delay of hesitation.
Goal adjustment is also another step to consider at this point. Now that you and your team have all of the information you need, you can make sure your goals are still being fulfilled. If they are not you can find out where this information can be applied or if you need to consider new options. At the beginning of this process you might have felt one competitor or process was more of a threat than it actually was. Likewise, research and analysis might find that a completely different factor is the real threat. It would be unwise to keep focusing on a nonexistent threat or ignore a new threat just because they weren’t part of your original goal. By modifying your goals you can continue to find value in competitive benchmarking.
Competitive Benchmark Action
We are finally at the conclusive step where we actually take action. While a decision might have arisen earlier on, this is the time where real steps are taken to make changes in your business. Depending on the size and structure of your business this step might be as easy as giving the go ahead to your team or getting final approval from the larger base of decision makers. As stated in the integration step, having a report to back up your decisions is a great way to expedite this process and communicate ideas thoroughly.
Finally getting to take action can be a rewarding process after spending all of this time debating what is best and considering every factor. That being said it is just the beginning. Now that you are taking action you need to maintain the same devotion and enthusiasm of decision making in the actual implementation. It can be easy for a company to lose drive in following through with a plan, leading to a wasted benchmarking process.
It is also important to consider the need to maintain benchmarking analysis from this point on. Businesses are always moving and industries are always changing. A competitive benchmarking analysis starts to show its age the second it is finalized. This is the major downside to having any sort of report like this. That being said, it doesn’t have to be that big of a detriment. By maintaining analysis on a consistent annual or quarterly basis you can assure your information will stay relevant with no surprises getting in your way.