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Benchmarking - Make Your Business More Competitive!
Benchmarking can be a great way of looking at your business and matching it against those of your competitors. It can also be a way of looking at your operations, for example in the UK, versus comparable peer operations in your organisation say based in France.
Business Review
Benchmarking can be either a one time event or one performed say every few years or it may be part of a continuous process where matching your performance becomes an every day event. Lets take for example the major super markets. Their main selling proposition to their customers are to keep quality high but prices low. They are always benchmarking their prices against one another in order to gain competitive advantage whether it be on the petrol forecourt or on a loaf of bread. The process can be used a major tool in quality improvement.
One big bonus of unbiased benchmarking analysis is that it takes out any bias that management may have in terms of their perception of where they are in the market place versus where they really are. I would suspect this, on a number of occasions is a shock!
Information
Benchmarking in theory may sound simple but in reality and from personal
experience it is relatively easy to accumulate information on your company's operations but when trying to get information about your competition it becomes a lot harder. You can for sure, if they are a publicly listed company, acquire their financial information and if you can find the CEO’s statement to shareholders, you can see their strategic intent but to get down to the layer of data that can compare, for instance, distribution operations or sales operations structure and related performance it becomes harder.
You may have good sources e.g., An employee who had worked at your competitors company and now works for you or via other (legal) routes. Information on competitors, especially in today’s fast moving world of commerce can become out dated very quickly and therefore you need to act fast on benchmark information. If you do get this information it would be worth while performing a SWOT (strength, weakness, opportunity and threat) analysis on your business versus theirs and act on the chinks of armour where you are stronger than you rival.
The Customer
Customer surveys are a great way of benchmarking your performance within a market space. You can do this via customer surveys. You may wish to look at how you are doing this year versus last year. You may want to know customers perceptions on how you are perceived against the range of products or services within your sector.
There are many tools to help you achieve this. Personally both for business and academic purposes I have used Survey Monkey which is an online, web based survey system. You can even get started using their free survey service. You can analyse results online and download them into excel. Customers tell you what its like in the real world not the internal corporate world you may live in. You may think you are great but your benchmarking data may say something different. You need to act on this unbiased information you have been provided to survive in today's uncertain commercial environment.
Conclusion
Benchmarking can be an extremely powerful tool to provide unbiased information about your business and how you rank against your competitors. Management should use this information to make sound strategic business decisions that can drive cost performance and increase sales in the market space in which they are
Participating.
Nigel Penhearow is professionally qualified sales and operations expert with in-depth knowledge of many business practices. Many of his articles are based on actual experience of putting theory into practice. You can find out more about Nigel by visiting his web site www.operations-director.com or you can link with him at LinkedIn by using the following link http://uk.linkedin.com/in/penhearow .
Benchmarking