Question

Company ‘A’ has used Performance Benchmarking to compare its product ‘X’ with the competitor’s product ‘Y’ and found out that the product ‘X’ is priced slightly lower, but it also has fewer features than product ‘Y’. The company recognized that in order to win a larger market share and establish itself in the market, it has to increase the number of features in its product while keeping the price at the same level or even decreasing it. To achieve this, the company ’A’ has set up a team that investigated product ‘X’ value chain analysis. Use the following benchmarking tool step by step and apply to the above situation.

Balanced Scorecard Framework

NPS

Operating profit margin

Answer 1

Balanced Scorecard Framework

	Present	Future	Objective	Measure	Initiatives
Financial	Low market share compared to Product Y	Product X establish itself in the market	Gain Market Share	Cost to company, Marketing Cost, Purchasing cost, Purchasing process	Assign proper metrics to marketing and purchasing activities and gather relevant data
Customer	Not getting the best offering	More features at cheaper/similar pricing	To improve customer satisfaction	Sales, Repeat purchase, Ratings & reviews	Social Media Marketing, High Engagement & educating customer
Internal	Product X is cheaper but has fewer features	Product X has more features at same/lower price	Identifying cost centres and optimising cost	% Cost saved on marketing, % Cost reduced in procurement	Supplier relationship building activities, open market buying process, In-house manufacturing or outsourcing comparison
Learning & Growth	New team for investigation	Learn from the market leader	Strong market leading team	Head Count, Revenue per resource	Develop training system, invest in culture