When studying the market, businesses should draw conclusions about their competitors based on both numeric and non-numeric data. No one will argue that such metrics as Cash Flow Growth, Net Profit Margin, Return an Assets or P/E ratio can provide your company with powerful statistics when diagnosing the financial health of your rivals. At the same time one should not underestimate the importance of information that cannot necessarily be expressed numerically. Numeric data combined with analysis of the strengths and weaknesses of the competition-s products and/or services, the investigation of the grounds for customer dissatisfaction, assessment of the competitor-s ability to react to continuous market fluctuations and the like can give you in-depth knowledge of your competitors and help you make the right strategic decisions.
Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
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Competitive analysis is about assessing the strengths and weaknesses of existing and prospective competitors. It gives the concerned organization a way to view its standing in light of the other players in the market.
In addition to the immediate advantage of this act mentioned above, extended implication includes introducing the best practices being followed in other firms in own place.
Despite the essential and useful nature of this kind of evaluation, organizations often do not deviate much from the traditional ways of conducting such studies.
A true and honest attempt in this direction would be to give its due importance and make it a significant part of corporate strategy.
A step-by-step procedure for peer analysis can be- 'defining the industry in which the organization operates', 'determining the competitors', 'determining who the customers are', 'spotting the key success factors that work in your industry', 'giving ranks to those success factors', 'rating competitors with respect to each of the key success factors', 'some calculations' to arrive at specific values. Also efforts should be made to achieve competitive intelligence on rivals and
make detailed competitor profiling through a structured competitor array analysis.One can turn these aspects into 'Key Performance Indicators' and place those on a balanced scorecard. Further, these indicators can be tracked on regular basis so as to make sure that values do not go beyond acceptable range.
This is the actual scorecard with Competitor Analysis Performance Indicators and performance indicators. The performance indicators include: competitor analysis, financial scanner, operating profit margin, net profit margin, return on assets, return on equity, cash flow growth vs. average cash flow growth within the industry, p/e ratio, product/service scanner, top products/services, product/service success analysis, product weaknesses, new products/services, new product/service success analysis, human factor, retention rate, employee longevity, service quality, market penetration, dissatisfaction control, strategy and tactics scanner, competitor objectives, responsiveness, strategic adjustments, potential lacunas, advantageous failures .
Download a trial version of Competitor Analysis Evaluation Balanced Scorecard or purchase a full version online.
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