Benchmarking and Market Analysis

Business Analysis Techniques Series. Benchmarking technique compares organizational practices against best-in-class practices from competitors, government, industry associations or standards. Market analysis understands customers’ needs, factors influencing purchase decisions, and studies competitors. 

Following are the steps to carry out Benchmarking

  • Identify areas to study.
  • Identify benchmarking sources.
  • Conduct survey / visit enterprises.
  • Determine gaps between best and current practices.
  • Develop proposals to implement gaps.

Steps to conduct Market analysis

  • Identify (target) customers and understand their preferences.
  • Identify opportunities to increase stakeholder value.
  • Identify competitors and investigate their operations.
  • Look for trends in the market, anticipate growth rate, and estimate potential profit.
  • Gather market data and business analysts use existing resources such as company records, research studies, books to answer questions at hand.
  • Determine trends and draw conclusions.
  • Define appropriate business strategies.

Strengths

  • Provides information about new methods, ideas, and tools to improve.
  • Market analysis.
  • Target specific groups and products to answer specific needs.
  • Determine when to enter or exit a market.
  • Expose weaknesses within a certain company or industry.
  • Identify differences in product offerings and services available from competitors.

Limitations

  • Time-consuming and expensive. 
  • Need expertise to conduct and analyze gathered information.
  • Benchmarking cannot produce innovative solutions. 
  • Needs proper market segmentation.
  • Check out the “ Business Analyst Certification Training” article 

Worked out example of benchmarking against a competing product – Rational Portfolio Manager

RequirementRational Portfolio manager 
Performance/response time (performance engineering)Less than 5 seconds for 200 concurrent users, Less than 8 seconds for 1000 concurrent users
ScalabilityUp to 15000 users on a single server
Security (Confidentiality – Integrity – Availability)Supports ISO 27001 requirements
Software, tools, standards etc. compatibilityIntegrates with MS-Excel, MS-Word, MS Project
Price10 USD per month per user
PortabilityMust work on IE, Chrome, Firefox
CertificationMust be certified on Windows Azure
InternationalizationSupports multiple languages (English, Chinese, Arabic) and multiple currencies