Global Dimension
It is a procedure of comparing business performance with the other businesses which have performed tremendously well in the industry. Benchmarking is the best tool to raise the performance standards and quality in order to compete successfully in the market. As far as dimensions in this process are concerned, it includes cost, time and quality elements to consider. The firm decides to practice benchmarking practices, recognizes the top firm in the industry to compare themselves against in order to increase its own efficiency. This process sets the direction and long-term strategy for the company and provides a great platform to the entire organization. The objective of benchmarking is to measure the actual performance and how it will improve in the future (Fifer, 1989).
Benchmarking is also referred as “Best Practice Benchmarking” or “Process Benchmarking.” It comes under the area of management in particularly strategic management, in which firms assess several features of the organizational methods and processes against companies and adopt best practices in the industry. Successful implementation of benchmarking best practices facilitates the firm and contributes significantly to the development of future plans and strategies in order to strengthen the performance standards. It is basically a continuous process of improvement and may be adopted whenever needed by the organization. Benchmarking also makes a firm cost effective, if implemented efficiently (Bogan, 1994).
Advantages and Practices of Benchmarking
There are various advantages of benchmarking for any firm which wants to gain competitive advantage in the industry. It is up to the firm how efficiently it identifies the firms to match the standards. If it identifies the right firms and industries for benchmarking, then there is no doubt it will increase the performance standards. Several companies implement benchmarking practices to achieve success and overcome their shortcomings. To take the full advantage of it, there should be a proper identification of needs, problems as well as industry top competitors should also be recognized efficiently. Some of the benefits of the benchmarking process are as follows:
Decreases Labor Cost
Enhance Product Quality
Strengthen sales and revenue
Performance Improvement
Bring Change
Decreases Labor Cost
One of the advantages of benchmarking process is a decrease in the labor cost. For instance, a manufacturing company may identify the cheap equipment and material for the manufacturing process by analyzing top competitors in the industry. Another important factor is automation; the company can decide to go for automation which would decrease the labor cost by manifolds.
Enhance Product Quality
A healthy competition in the industry usually forces the participating companies to strive for product quality and continuous improvement in end-product delivery. The R&D department of the firm usually analyzes competitors' products. Afterwards, they adopt the quality standards in their products to strengthen the customer base. This means adoption of good practices discovered during the analyses of competitive products in the products of firm's owner.
Strengthen sales and revenue
Benchmarking process always contributes in sales and revenue of the organization. Benchmarking facilitates the firms to better understand the needs and demands of the customers, and it causes a significant increase in sales and revenue. This happens after filtering out the best practices of the competitive competitive companies that how they are managing their sales force talent, how they are generating leads and finally how the top competition is segmenting market to harness maximum revenues.
Performance Improvement
Through internal benchmarking, the performance of all the departments can be improved through the implementation of benchmarking practices. The performance of the best department of the firm is compared with other departments within the organization to raise/gauge the level of the performance. Benchmarking identifies the areas of improvement and lacking within the organization for the sake of the performance. (Camp, 1989).
Bring Change
Process of benchmarking brings changes in the organization, because the company is comparing their standards with the top firms in the industry. This reveals huge gaps in performance, which propels the management to take action and work upon getting the holes filled. This also provides new ideas and a roadmap for the company for strategy implementation. It also increases the knowledge and promote learning within the organization.
Solution No.2
The element of forming partnerships with local companies is as per the instructions of the local government, but they do not maintain the quality standards of the international firm play a key role in the overall performance of the company. Therefore, to overcome this issue the international companies should first of all look for the right local partner who can best serve as the partner for the international company by maintaining the standards of quality. In contrast to this if the local partner does not fulfill and meet the quality standards, then the international company should send a team from the company who can actually train the local employees and educate them about the quality standards they have to meet...............
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