| This is a diagramming tool for benchmarking
or comparing competitiveness among various external market factors. The tool
can be used to compare yourself against a single competitor or the whole
market sector. Information about sectors can be found from most market
research companies. Being better than the competitors in each category
should deliver a competitive advantage. It is more normal to be ahead
in some areas while being behind in others; unless of course you are the
market leader. Remember, your competitors can also do this analysis and try
to close the gaps where you are ahead, or ensure that you cannot catch up
with them.. The features shown are the more usual ones, but you can
substitute for others where necessary. To use the web, allocate 100 points
to each category, depending on
their importance to the industry. This allocation can be carried out by
consensus or scientifically. As it is just a rough tool, a consensus
between industry experts is best / quickest/ cheapest. Next determine
whether your company is better or worse than the industry in that
category. Your strongest gains should be achievable from your largest
shortfall. Alternatively, keep an eye on those areas where you are ahead
of the competition, as this is where you will be gaining your competitive
advantage and they will be seeking to play catch up.
In the
example shown I have examined a product using the factors shown below. You
can substitute for any appropriate factor when using the tool, and can add
additional factors if required.
 Features: Primary (basic purpose and function); Secondary
(performance and substitutability); Tertiary (customer experience of the
product and purchasing experience)
Grade: Quality, conformance to spec and the tightness of
the spec.
Price: Reflect on the whole life costs, not just the
purchase price.
Lead time: Product development time.
Branding: Marketing and advertising,
competitiveness and reputation.
Flexibility: Can you quickly adapt the product to changes
in the market need?
The web shows us that the company is matching the sector in terms of
features. They have a very good advantage in terms of lead time, but
are behind in terms of flexibility. These two factors tend to be related.
In order to provide good lead times, the company may hold large amounts of
finished stock. This can usually be expensive and should drive up costs
and hence price. We can see that the company is lagging behind in terms of
price, so these costs may explain why that is. On the other hand, the strong brand may help the
organisation to drive the market, rather than follow. Branding is
also expensive, but it appears that they are able to demand a premium
price for their product possibly because of the good branding. Overall, the
features appear to be average for the market, but quality is perceived to be higher.
This may be because of the branding or it may be that good lead times are
of high concern to the customers. Because of these they are able to charge
a higher price. This does not necessarily mean that they will be more
profitable however, because of the extra costs involved in marketing and
stock holdings.
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