Right now, we are in the middle of the Fourth Industrial Revolution, driven by data. According to research by Harvard Business Review, 52% of Fortune 500 companies have disappeared since 2000 because of digital disruption, of which data is a big part. On the other hand, companies that already use data in their decision-making process are winning the race. How can companies in the agri food industry evolve by comparing themselves with industry competitors?
Competitive Benchmarking: Arm yourself against assumption
The CEO of a company can say: "I want 10% growth." The sales manager then counters: "The market is experiencing a dip, so 5% is more realistic." These kinds of discussions often end in horse trading. That is why competitive benchmarking is so important, as it creates an objective measure of your performance versus the market performance.
The same goes when deciding on the goals within the budget for next year. Companies aim to improve on the previous one, but this way they might often aim for improvement in an area where they are already performing well, and continue setting the bar too low in an area where they can do better. This discrepancy happens when companies only look at themselves, as it makes them inherently biased.
Create an objective performance measure
In benchmarking, the performance of a company is compared with that of similar companies, thus providing them with an objective measure of their business. It enables you to identify the strengths and weaknesses in your business model in relation to the competition, based on data that is internationally and publicly available. This, in turn, helps you determine the right strategic ambitions, in perspective of the market.
It is a necessity for companies to act on the insights drawn from not just their own operations, but also those of food industry peers. According to McKinsey, this “approach makes it possible for companies to understand what high performance really means in their own industry and to improve that performance constantly.”
To put it simply, in this data-driven age benchmarking is a crucial tool for companies to make targeted improvements, so they can maintain or obtain a competitive advantage.
In our Benchmarking report we dive deeper into the benefits of benchmarking, and explain why companies really can’t do without it. On top of that, it offers a detailed six-step guide, demonstrating where you can get the data from, what to look at, with whom and when, and how to apply benchmarking in your own organisation. In other words, it offers everything you need to take the step today that helps your company move forward.
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