In our SupplyLens™ applications, Lytica uses the term competitiveness (price competitiveness) or LCI (Lytica Competitiveness Index) to define a quantitative parameter that is calculated based on a company’s spending. Price competitiveness is a statistically derived ranking expressed as a percentile where 100% represents best in class spending performance. A 50th percentile company would be average, companies ranked less than 50% would be worse than average.
Why do I need to know my competitiveness?
There are two reasons. The first quantifies how your company is doing in the market place against potential competitors. The second allows Lytica to calculate pricing that is appropriate for your company. If you have a competitiveness level of 65%, you should be paying 65th percentile prices.