Question 1.
Benchmarking is the evaluation of the standards of performance of other businesses by gathering data on how other firms perform and then use the information to improve the functions and operation to achieve growth and improvement. Japanese hadalways received credit for inventing the concept of benchmarking when they sent their managers to visit other firms to help improve their understanding of betterbusiness practices. At the same time, Xeroxis also considered to have led to the development of the modern concept of benchmarking in 1979. As the competition was increasing, Xerox started the process of competitivebenchmarking to combat the increasing competition. By using benchmarking, it is easy to understand the standards of measurement. Benchmarking has grown in recent times as a means of gaining and maintaining the competitive advantage amid increasing businesscompetition. The concept is now used as a tool for performance measures where companies compare their performance with others. A 1992 study conducted in the United States shows that 32% of the firms benchmark their products and services.
Question 2.
Benchmarking is more suitable for large firms because they are well placed to take quality improvement measures without any barriers. Small firms experience a lot of barriers in their attempt to implement benchmarking in their organizations. The barriers may include lack of time, poor management strategies and insufficient firms. Compared to small firms, large organizations can easily implement strategic planning and improve their competitive advantage because they have limited barriers. They have sufficient resources to invest in the process, and there is a good strategic plan which ensures that the whole process is carried out as expected. Also, large businesses are better placed to do benchmarking because they do not need to rely on the third party as in the case of small businesses.
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Question 3 .
Benchmarking and competitive comparison analysis is different. Competitive comparison analysis involves the process of gathering information concerning the results achieved by a firm. Benchmarking, on the other hand, gathers informationconcerning the processes and procedures that a company used to achieve certain results. While competitive comparison analysis looks at the results, benchmarking looks at the process used to achieve those results. Also, competitive comparison analysis involves comparison within the industry while benchmarking can also involve comparison with firms in other industries. The focus of competitive comparison analysis is on the needs of the company whereas benchmarking focuses on the needs of the customers and how to satisfy them. Competitive comparison analysis involves results of the company thus secretive unlike in the case of benchmarking where information is shared to increase mutual benefit.
Question 4.
Poor planning and evaluation are one of the barriers that small firms face when implementing benchmarking. These small businesses tend to have poor strategic planning which affects their ability to implement benchmarking appropriately. Cost is also another barrier that small firms face when they try to gather data for benchmarking. Due to their small financial capabilities, small firms may not be in a position to effectively undertake to benchmark. Small firms also lack the required knowledge and skills required to successfully undertake to benchmark and this affects their ability to get better results. Managers have limited information about benchmarking thus limiting their ability to lead the process successfully. The major concerns of bench marking are that some data collected for benchmarking may not be accurate and cannot be verified. This is because businesses are protective of their sensitive information and may not reveal the historical background on how the process was undertaken. Also, industries mainly tend to focus on the results instead of looking at the process that leads to these results.
Question 5.
The company that successfully implemented benchmarking is Philips. The company through its president decided to benchmark the performance of Philips against other firms. The key indicators involved included cost-cutting, the movement for change, organization culture and customer experience. The company examined the performance indicators of other firms with the key focus on the processes and procedures that leads to better results ( Sadasivan et al., 2016). Instead of focusing on the results, the form paid keen attention in gathering and analyzing the data to identify what other firms are doing that makes them prosper. The company focused on the implementation of improvement strategies and ensured that the process is continuous. The reason for the successful implementation of benchmarking was because the company had a purpose for the process, focused on the external analysis and measurement based and then create an action plan.
The key areas identified by the company that needed changes were restructuring and cost-cutting, creating a changing environment and promoting efficiency. The company realized that it had to restructure and make some changes by removing a few people to cut costs and improve its production process ( Sadasivan et al., 2016). There was a need for product rationalization because the company had too many product areas leading to weaker business justification. There was also the need to change how things were being done especially in areas of cost management and satisfying the needs of the customers. Upon taking action on the data, the company implemented the changes by restructuring its processes and cutting costs on many other areas thus increasing profitability. After setting a clear strategic plan, new ways of doing things were introduced,and the culture of the organization was introduced. Philips started to see positive changes in its performance after the implementation of the benchmark reports.
References
Sadasivan, S., Bausemer, K., Corliss, S., & Pratt, R. (2016, May). 27 ‐ 1: Invited Paper: Performance Benchmarking of Wide Color Gamut Televisions and Monitors. In SID Symposium Digest of Technical Papers (Vol. 47, No. 1, pp. 333-335).
