Explanation

Answer Example

Competitive benchmarking involves analyzing the financial performance, market position, and strategic activities of peers and industry leaders. For example, while evaluating an acquisition in the fintech sector, I benchmarked the target company against competitors in terms of customer acquisition costs and revenue per user. This revealed inefficiencies in their marketing spend, which I factored into the valuation, leading to a more favorable negotiation position. This approach ensures data-driven recommendations grounded in industry standards.