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What is competitive business benchmarking?

by | Jun 17, 2020

Knowing what’s working and not working for your business can be a daunting task. While it isn’t always simple, benchmarking your business is always necessary for business growth.

Competitive business benchmarking looks at a company’s direct competitors and evaluates how the company performs in comparison. Knowing the strengths and weaknesses of your competition is important to design a successful strategy, but it can also help you identify basic activities and drivers.

Business owners can assess business performance by implementing two different approaches to benchmarking. These types of benchmarking include:

Internal benchmarking
Competitive benchmarking

What is Internal benchmarking?

Internal benchmarking is a practice that seeks best performance options for a business and prioritises areas for improvement. Based on a range of metrics internal benchmarking can provide valuable insight on specific customer expectations.

Additionally, it enables you to identify gaps existing in your business processes and develop strategies to outperform competitors.

What is Competitive business benchmarking

Competitive business benchmarking is the process of comparing your company with competitors in order to identify best practices in your industry. Comparing your business allows your company to meet industry benchmarks to improve functions, processes, products and services.

Improvements in these functions can increase sales to core customers and foster growth in the company’s business model or product and service offerings.

What does competitive benchmarking achieve?

Carrying out routined competitive benchmarking assessments can help you stay on top of the new practices your competitors have adopted. These findings allow you to either improve your business strategies or develop innovative practices.

Taking action on findings from competitive analysis allows you to approach the market from a position of strength while helping to develop your strategy and define your strategic direction.

It allows you to take action against your competitors and gain insights into their strengths and weaknesses.

Additionally, analysing competition offers small businesses additional opportunities. It can help to improve your ability to introduce new products and services, convert potential customers and track your company’s performance in terms of sales, marketing, customer service and customer satisfaction.

How to see results from benchmarking businesses

It is important to understand that benchmarking is not a quick instrument for success, and can take time and effort to implement relevant changes. However, because the hard work is in the benchmarking research, you’ll proactively be able to recognise the gaps in your business and cover places where you can take competitive advantage.

Depending on the findings, the results can benefit your business in a variety of ways, helping you create opportunities to improve operations and sales, identify new technologies that could reduce costs, and even strengthen customer loyalty and satisfaction.

By identifying your strengths and weaknesses and studying how other leaders achieve their goals, you can track key trends and movements in your space, maintain your lead and emulate their success.

If you’re after reliable competitive benchmarking services for your business contact the professionals at Stewart Private Accounting. Stewart Private Accounting are experts in the industry and offer a wide range of accounting solutions including: financial reporting, accounting and tax, bookkeeping, business advisory and trusted concierge. Our accounting solutions are designed to help business owners maximise their time and increase financial success. Contact a bookkeeping professional today so you make the most of your tax return!

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    Disclaimer for External Distribution Purposes:

    The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

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    Disclaimer for External Distribution Purposes:

    The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

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    Disclaimer for External Distribution Purposes:

    The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.