Benchmarking

• What is benchmarking?

  Benchmarking involves comparing a business's performance, processes, or products with competitors or industry leaders to identify areas of improvement
• What are the advantages of benchmarking?

  • Helps businesses learn from industry leaders - improves processes
  • Helps a business stay competitive in the market
  • Identifying areas of weakness
• What are the disadvantages of benchmarking?

  • May lead to imitation rather than innovation
  • Time-consuming and costly to gather and analyse data
  • Could lead to a misalignment of objectives
• Why does benchmarking improve innovation?

  Improves innovation by identifying best practices and setting performance targets
• When is benchmarking most suitable?

  Businesses in competitive markets (e.g. retail, airlines)
• When is benchmarking not stuitable?

  Unique, niche businesses with no clear competitors
• What topics does benchmarking link to?

  • Porter's five forces
  • Quality
  • Financial ratios