4 Effective Benchmarking Techniques of Business Growth Strategy
Effective functioning and growth of a business is largely dependent on the proper use of the technique of benchmarking. A proper application of benchmarking technique helps managers and business owners to have a fairly good idea about the present conditions in the business venture and accordingly set reasonable targets for the future.
In short, a perfect balancing view of the Internal Benchmarking (Internal Business Assessments) and External Company Assessments (External Bench Marking) enable managers to get clear picture about the strength and weaknesses of the business venture thus equipping them to take requisite measures for the growth of the organization.
1. Identifying Areas That Need Change:
Targeting the areas needing change within the organization, between competitors dealing in similar product or services, and competitors within the industry as a whole will help to analyze and set target goals for the whole year.
This benchmarking method can be used effectively to derive intended profits for the company, increase or downsize the staff strength and also reduce or increase the product output.
2. Analysis of Financial Data of Bygone Years
Analysis of the company’s earlier year’s data will throw light on the growth or decline or profit. This in turn if compared with the strength of the staff during the same period will reveal the efficiency or non performance of the staff during the respective period.
Furthermore, a review of the business financial statement also helps to analyze the quality of the service or product, the employee progress report, customer feedback forms.
Based on the analysis of the earlier few years’ financial data, business managers can take the needed steps and actions to improve the business.
3. Zeroing in on Factors Directly Affecting the Profit
The technique of benchmarking if used effectively helps to zero in on the factors directly responsible for causing highs and lows of profits in business.
With the help of internal data comparison, an organization can easily identify the low profit period and determine the factor which caused the same such as downsizing of staff, poor product quality etc.
The noting of such findings will help to take adequate steps to overcome the same such as increasing the strength of the staff or improving the product quality.
4. Identifying of Growth Opportunity
Benchmarking technique can be described as the “Light House” for businesses as it helps to identify the areas of prospective growth and opportunities available to businesses.
By comparing the company’s present data and future goals, an organization can take required steps to overcome failures. A company can adopt revamping of its vacation policies to retain the more efficient and hardworking staff.
Similarly comparison of the company’s current policies and practices with the policies and practices of the sister or competing firms will help find effective and strategic ways to counter the prevailing problems and to improve business.
To Sum up – Just setting goals alone is not enough. Setting of effective short term and long term goals ranging from 90 days to a period of 1 year for short term goals and a period of one to 10 years for long term goal along with regular reviewing of the same is the key to achieving successful business growth.
Similarly obtaining answers to questions such as what is the present position of the organization currently? Where is the organization likely to head in a few years time? What is the outcome of the data analysis done? What are the effective positive changes of the short and long term goals is essential.
Ensuring of better effective policy changes in lieu with the findings along with respective changes in the business practices is essential to see that the goals are met effectively and growth of business is achieved. iResearch Services offers expertise services in benchmarking analysis.