BENCHMARKING

What is Benchmarking?

The most simple meaning of benchmarking can be quoted as:

improving ourselves by learning from others

Definition of Benchmarking

Benchmarking is the process of improving performance by continuously identifying,

understanding, and adapting outstanding practices inside and outside the
organization

Benchmarking is the process of comparing ones business processes and

performance to bests
Why are others better
How are others better?
How can we become the best in our field/industry?
Main features of benchmarking?

Continuous methods of measuring and comparing a firms business processes

against those of another firm

Discover performance gaps between own processes an of the leading companies

Incorporate leading firms processes into own strategy to fill the gaps and improve
performance
Why Benchmarking

Benchmarking is a more efficient way to make improvements.

Since BM eliminates trial and errors, the organization is able to make quick
improvements
Set high yet realistic targets
Advantages of Benchmarking

Product and process improvement

By implementing benchmarking activities, organizations can improve their
processes
Time and cost reduction
Benchmarking is time and cost efficient because it involves imitation and
adaptation rather than invention
Competitive strategy
Benchmarking enables a company to build core competencies that will help to
gain and/or sustain competitive advantage
Disadvantages of Benchmarking

What works best for the competition may not be suitable for the companys own
processes
Poorly defined benchmarks may lead to wasted time and effort meaningless
results
incorrect comparisons
Tools used when Benchmarking

SWOT Analysis

Market positioning map

Porters 5 forces

Compare the 4Ps ( marketing mix)

CHANEL VS GUCCI
Marketing mix
P Dior
Product Clothing, suits, jewelry,
watches, handbags, make up,
perfume, shoes
Price Premium pricing to reflect on
the superior quality of the
products
Promotion Advertising is mostly done in
the most expensive fashion
magazines, TV and internet
Place Chanel has more than 3000
stores all over the world
Gucci
Shoes, watches, jewelry,
babywear, eyewear, handbags,
perfume, home products
Premium pricing to match the
superior quality of the products
Stores are located in exclusive
and high-end shopping streets
/areas
Stores are located in expensive
and high profile street location
that are exclusive
References

Boxwell, Robert J., Jr. Benchmarking for Competitive Advantage. McGraw-Hill, 1994.
Camp, Robert C. Benchmarking: The Search for Industry Best Practices That Lead to
Superior Performance. Productivity Press, 2006.
Czarnecki, Mark T. Managing by Measuring: How to Improve Your Organizations
Performance Through Effective Benchmarking. AMACOM, 1999.
Harrington, H. James. The Complete Benchmarking Implementation Guide: Total
Benchmarking Management. McGraw-Hill, 1996.
Reider, Rob. Benchmarking Strategies: A Tool for Profit Improvement. John Wiley &
Sons, 2000.