What is Benchmarking? Benchmarking is a strategic management process that involves comparing an organization’s performance, processes, or practices with those of leading competitors or industry best practices. It helps identify areas for improvement, set performance targets, and enhance competitiveness by adopting proven, successful approaches in various aspects of business operations.

Why is Deal Benchmarking Important in the Automotive Sector? Benchmarking has become a widely acclaimed method for assessing, evaluating, comparing, and improving various processes, performance, prices, and business activities. Companies utilize price benchmarking, supplier benchmarking, and deal benchmarking to ensure they are matching industry standards, staying ahead of competitors, and meeting consumers’ demands and preferences. In the automotive sector, finding the right supplier, striking the ideal deal, and developing robust partnerships is necessary to achieve sustainable growth, keep pace with the rapidly evolving market trends, and overcome the rising volume of challenges impacting their business. Deal benchmarking helps companies carefully assess and analyze the quality, value, and sustainability of a potential deal by comparing it with ongoing, past, or industry benchmark deals. This enables data-driven business decisions, stronger negotiation, and sustainable partnerships with mutually beneficial deals. Ensuring that a business deal meets various standards and compares well with benchmarks requires a comprehensive understanding of the necessary metrics and key performance indicators (KPIs), and a detailed benchmarking system.

What are the Primary Metrics for the Deal Benchmarking Process?

1. Strategic Alignment: When choosing a business partner, negotiating a contract, or entering a deal, it is crucial to ensure that all involved parties have aligned strategic approaches and that potential business relationships will be collaborative and supportive. This metric helps companies compare the deals and partners that would propel their growth, with minimized risk of future clashes. #StrategicAlignment

2. Cost: Changing market dynamics, evolving trends, developing consumer demands, and other major influencing factors can often cause costs and prices offered in potential deals to differ and fluctuate. Deal benchmarking allows companies to analyze the process that helps determine the ideal price and costs. This includes in-depth insights into the costs incurred by the suppliers or vendors, and prices offered during negotiation. #CostBenchmarking

3. Targets and Goals: Finding the ideal business partner requires a comprehensive understanding of the company’s own business goals, objectives, and targets. The deal benchmarking process helps companies compare previous partnerships and deals, ensuring that potential deals meet the same standard or are a significant improvement. #GoalsBenchmarking

4. Delivery and Quality: Organizations must compare potential suppliers’ offerings with that of previous deals and partners, considering the demand for high speed-to-market, unparalleled quality of products and services, and rising competition. #QualityBenchmarking

5. Communication Systems: Developing and maintaining strong communication guidelines and systems is imperative for collaborative success. The deal benchmarking process helps companies identify communicative guidelines and systems that promoted growth in previous partnerships, aiming to replicate a similar system with new partners. #CommunicationSystemsBenchmarking

Success Story – SpendEdge Advantage A rising automotive manufacturer successfully replicated their successful deals across the supply chain by leveraging SpendEdge's expertise in deal benchmarking. Comprehensive advice, sustainable strategies, and a detailed understanding of needs, expectations, and wants from potential partners enabled the automotive manufacturer to establish clear contract management plans, identify best-fit suppliers, and create ideal supportive, collaborative, and sustainable partnerships. #SuccessStory #DealBenchmarking

Contact us.