How To Measure Competitive Advantageposted by Anna Mar, May 30, 2013
What Is It?Benchmarking is the practice of measuring your competitive advantage and disadvantage.
It's a strategic planning activity that identifies strategic gaps.
So What?The goal of business strategy is to achieve business results such as revenue and build competitive advantages.
If you can't measure your competitive advantages or disadvantages its difficult to improve them.
Benchmarking is a critical activity that tells you where your business stands.
Examples of BenchmarkingIf you've got the data, it's possible to benchmark any aspect of your business. For example:
- Product Benchmarks
Cost, quality and time to market.
- Technology Benchmarks
Technical benchmarks such as the speed of your services.
- Process Benchmarks
Cost, efficiency, speed and quality of your processes.
- Experience Benchmarks
How does your customer experience stack up against the competition?
- Market Benchmarks
Looking at key marketing areas such as brand awareness.
- Culture Benchmarks
How does your corporate culture compare?
- Financial Benchmarks
Comparison of key financial indicators.
- Change Benchmarks
A look at the agility of your organization. For example, your time to market for programs, projects and initiatives.
- Sustainability Benchmarks
Triple bottom line factors such as energy efficiency, waste and emissions.
How To BenchmarkBenchmarking is garbage-in-garbage-out. It can be difficult to find reliable industry data. For example, your competitors aren't likely to share their process benchmarks freely.
Consultants are typically used as intermediaries.
You may compare yourself to an industry best practice. Alternatively, you may want to compare yourself to a handful of specific competitors that lead in the target area.
The following steps represent a high level benchmarking process:
- Identify Key Performance Indicators
Decide what measurements are critical to your competitive advantage.
Measure your own KPIs.
- Measure The Competition
Identify the current leading measurements for the target area.
- Identify Gaps
Evaluate your performance against industry leading performance in the target area.
- Strategic Planning
Benchmarks feed into your strategic planning process.
Lists of business metrics.|
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