Competitive Benchmarking Analysis for the Automotive Industry
Globalization has brought about major challenges for companies operating in the automotive industry and has increased the competition between international and domestic automakers. Also, the increasing demand for digitalization is pressurizing automakers to invest in technology and better supply and distribution chain management. Owing to such challenges, gaining a competitive edge has become all the more essential for companies in the automotive industry. To achieve this, automotive companies will need to compare their products, services, processes, and practices to their direct competitors using standard industry benchmarks. This is where companies realize the need to leverage competitive benchmarking analysis.
What is Competitive Benchmarking Analysis?
Competitive benchmarking analysis is defined as the process of comparing a company’s business performance with that of its direct and indirect competitors. Competitive benchmarking analysis helps businesses identify improvement opportunities in their business process. Furthermore, by leveraging competitive benchmarking analysis solution, businesses can also understand the shortcoming and strengths of their competitors and make well-informed business decisions.
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Business Challenge
The client is an automotive product manufacturer based out of Central Europe. The company supplies instrument panel and cockpit components, safety products, and interior and exterior trim products. With a large number of automotive manufacturers and suppliers entering the European automotive market every year, the client was facing challenges in competing with them in terms of product, quality, and capability. Also, the client was losing their market share to their competitors. Therefore, the client wanted to compare their own performance with other major automakers in the market. Also, they wanted to identify their shortcoming and strengths compared with other major automakers in Europe. Therefore, they approached Infiniti Research to leverage their expertise in offering competitive benchmarking solution. Furthermore, with Infiniti’s competitive benchmarking analysis solution, the automotive company wanted to make improvements in productivity, quality, and reliability to drive down cost and keep customers satisfied.
With Infiniti’s competitive benchmarking solution, the automotive company also wanted to tackle these challenges:
- Today, technological advancements and innovations have increased the expectations of customers. Like all other sectors, this has equally transformed the automotive sector. With this, companies in the automotive industry are pressurized to invest more in new technologies. Therefore, with Infiniti’s competitive benchmarking analysis, the client wanted to monitor how they compared with their competitors’ in terms of adoption of new technologies and processes.
- Having an efficient supply chain and distribution system has become equally important for automotive companies. With Infiniti’s competitive benchmarking analysis, the client wanted to analyze the supply and distribution system managed by their key competitors. By doing so, they wanted to analyze their shortcomings compared with their competitors.
- The client’s inability in responding to customer expectations in time and providing them auto products meeting their utility expectation largely impacted their brand image. Therefore, with Infiniti’s competitive benchmarking analysis, the automotive product manufacturer wanted to understand how their brand measured up against other companies in the market.
- Changing economic and geopolitical conditions in Europe brought about unexpected uncertainties and financial risks for automotive companies. Therefore, by leveraging Infiniti’s competitive benchmarking analysis engagement, the client wanted to understand the company’s financial position compared with other major competitors.
Are you facing difficulties in monitoring your competitors’ processes and planning? To know how our competitive benchmarking analysis solution can help you easily track your competitors’ strategies and develop a standardized set of processes and metrics to measure up against your competitors,
Solutions Offered
Process Benchmarking
Strategic Benchmarking
Performance Benchmarking
The experts at Infiniti Research followed a three-phased engagement to competitive benchmarking.
Process benchmarking
In this stage of competitive benchmarking analysis engagement, the experts at Infiniti Research compared the client’s business process with that of their competitors. This involved analyzing the client’s operational performance, supply chain and distribution processes. This phase of Infiniti’s competitive benchmarking analysis engagement helped the client to identify processes that needed improvement.
Strategic benchmarking
In this phase of benchmarking analysis, the experts at Infiniti Research identified the winning strategies employed by the client’s key competitors. Also, the experts analyzed how the client’s business strategies compared with their competitors. This phase of competitive benchmarking analysis engagement helped the client in understanding how their competitors adapted to the latest technological innovations and advancements. This even helped the client in better planning and goal setting.
Performance benchmarking
The last phase of the competitive benchmarking analysis engagement involved analyzing competitors’ performance metrics and processes. This phase even involved analyzing the financial performance of the client compared with other major competitors.
Impact Delivered
Performance Benchmarking
Gap Identification
Standardized Processes
Cost Reduction
- Performance Benchmarking: Infiniti’s competitive benchmarking analysis enabled the automotive client to assess their performance against direct and indirect competitors, identifying key strengths and weaknesses in their operations.
- Gap Identification: The engagement helped the client pinpoint specific performance gaps in areas such as supply chain capabilities, technology adoption, and capital management, allowing for targeted improvements.
- Standardized Processes: By developing a standardized set of processes and metrics, the client aligned their operations with industry standards, enhancing overall efficiency and effectiveness.
- Cost Reduction: Within eight months, the client achieved a 20% reduction in operating costs, translating to savings of $7.8 million, significantly improving their financial position in a competitive market.
Competitive Benchmarking Tactics to Measure Your Brand
Identify Key Competitors:
Determine who your direct and indirect competitors are in the market to establish a clear benchmarking framework.
Analyze Marketing Strategies:
Review competitors' marketing campaigns, messaging, and promotional tactics to understand their positioning and customer engagement methods.
Conduct Customer Surveys:
Gather feedback from customers about their perceptions of your brand versus competitors to identify strengths and weaknesses.
Evaluate Product Features:
Compare your products’ features, quality, and pricing against those of competitors to identify areas for improvement or differentiation.
Monitor Online Presence:
Analyze competitors’ website traffic, social media engagement, and search engine rankings to assess their digital marketing effectiveness.
Assess Customer Service:
Evaluate the quality of customer service offered by competitors, including response times and customer satisfaction ratings.
Review Financial Performance:
Analyze competitors’ financial metrics, such as revenue growth and profit margins, to gauge their market position and operational efficiency.
Benchmark Industry Standards:
Compare your brand’s performance against industry standards and best practices to identify gaps and opportunities for improvement.
Conclusion
Competitive benchmarking is a crucial strategy for automotive companies seeking to reduce costs and enhance operational efficiency. By systematically comparing their performance against industry leaders, companies can identify performance gaps and areas for improvement. This process enables manufacturers to implement targeted changes in their supply chain, technology adoption, and overall business practices. As demonstrated by a recent engagement with an automotive product manufacturer, effective benchmarking led to a 20% reduction in operating costs, translating to significant savings of $7.8 million. Ultimately, competitive benchmarking equips automotive companies with the insights needed to thrive in a challenging market landscape.
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