How do you use benchmarking and competitive analysis to assess your strengths and weaknesses in the market?

1 What is benchmarking?

Benchmarking is the process of comparing your business processes, products, services, or outcomes with those of other organizations that are considered best in class or industry leaders. The purpose of benchmarking is to identify gaps and areas of improvement, as well as to learn from the best practices and innovations of others. Benchmarking can be done internally, by comparing different units or teams within your organization, or externally, by comparing your organization with competitors, peers, or other relevant entities.

2 What is competitive analysis?

Competitive analysis is the process of analyzing your competitors' strengths, weaknesses, opportunities, and threats (SWOT) in relation to your own. The purpose of competitive analysis is to understand your competitive position and advantage, as well as to anticipate and respond to your competitors' moves and strategies. Competitive analysis can be done at different levels, such as industry, market, segment, or product, depending on your goals and scope.

3 How to do benchmarking?

To do benchmarking effectively, you should adhere to a systematic approach that consists of four steps. Begin by defining your objectives and scope, such as what you want to achieve and improve, which aspects of your business you want to benchmark, and who you will be benchmarking against. Then, collect and analyze data, determining what methods and sources you will use to measure and compare your performance. Identify gaps and best practices by comparing yourself with the benchmarks. Lastly, implement and monitor actions to close the gaps and improve your performance, while evaluating the results and impacts.

4 How to do competitive analysis?

To do competitive analysis effectively, you should start by defining your objectives and scope. This includes understanding who your main competitors are and how they differ from you, as well as deciding on the level of analysis you’ll conduct. You should then collect and analyze data, using sources and methods that help you organize and present the data. After that, identify your competitors’ SWOTs and strategies, and how they affect your business and market. Finally, implement and monitor actions to leverage your strengths, exploit opportunities, mitigate threats, counter or cooperate with competitors, and adjust your actions as needed.

5 How to use benchmarking and competitive analysis together?

Benchmarking and competitive analysis are complementary tools that can be used together to improve business performance and competitiveness. For instance, benchmarking your competitors can help you identify where you need to improve, as well as learn from their best practices. Additionally, benchmarking your industry or market can help you pinpoint where you stand in comparison to the average, and identify emerging trends and opportunities. Moreover, competitive analysis of your benchmarks can provide insight into their SWOT and strategies, allowing you to anticipate and respond to their moves. By using both tools together, you can gain a comprehensive view of your business performance and competitiveness, and make strategic decisions for your success.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?