Financial Planning & Analysis and Performance Management

11THE EXTERNAL VIEWBenchmarking Performance and Competitive Analysis

CHAPTER INTRODUCTION

Most traditional efforts by FP&A professionals are directed at the internal aspects of the enterprise, including financial and operational performance. FP&A professionals can extend and expand the value they add by looking outside the enterprise. This chapter will focus on three broad subjects:

1. Analysis of markets, customers, and competition.
2. Using external information to benchmark and evaluate performance.
3. Utilizing benchmark information to set enterprise goals for performance and value creation.

ANALYSIS OF MARKETS, CUSTOMERS, AND COMPETITORS

Since most of the greatest threats and the greatest opportunities an organization faces arise externally, it stands to reason that FP&A resources should not focus all of their attention on the internal aspects of the organization.

Sources of Information

The digital age has resulted in a plethora of data that is readily available from multiple sources on the Internet. In fact, the challenge has shifted from the availability of data to evaluating and selecting the most credible and relevant information to utilize.

Industry Reports

Most markets are covered by industry analysts or trade groups that follow market trends and key events. These reports also often provide rankings by revenue growth or other financial performance measures and include news on product introductions and other important events.

Research Analyst Reports

Companies ...