Question

Explain benchmarking as a strategic management tool (you must do research beyond your textbook to answer this question). CITE YOUR WORK. this needs to be atleast 150-200 words

Answer 1

Benchmarking is a strategy tool used to compare the performance of the business processes and products with the best performances of other companies inside and outside the industry.

In simple words managers use this tool to find and then implement industry's best practices in thier own company that will lead to superior performance. Improving company’s performance is the most important goal of benchmarking.

Apart from improving the performance of the company, it also helps in identifying successful business processes. By observing and scrutinizing successful companies, a manager can identify the processes, skills or competences that contribute to organization’s success and then apply the same practices to its own company.

The knowledge acquired about other businesses can be easily transferred to one's own organization and this will help the company gain competitive advantage. The tool is one of the most recognized and widely used tools of all the business strategy tools.

Managers use strategic benchmarking to identify the best way to compete in the market. Total Benchmarking effectively integrates four types of benchmarking activities: benchmarking of competitive advantages, benchmarking of strategies, process benchmarking and performance benchmarking within the process of strategic management, with the aim of supporting and improving the quality of strategic management decision-making.