BENECHMARKING YDEFINITION

³The continuous process of

measuring products, services, and
practices against the company¶s
toughest competitors or those
renowned as industry leaders
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BENCHMARKING
_ In sharp contrast to the
conventional approach of setting
the future goals extrapolated from
the internal practices and past
trends.
_ Since external environment and
market conditions change rapidly;
goal setting which is internally
focused can¶t be true reflection of
customer¶s expectations.
BENCHMARKING

_ Customers¶ expectations are highly

liquid and are driven by standards
set by best performer.
_ Any product or service just below
these standards may not catch the
eyes of customer.
hy use Benchmarking
_ Survival lies in emulating best and
not in lagging behind
_ Bench marking is time and cost
efficient because it involves
imitation and adaptation rather
than pure invention. Prevents the
³Re-inventing the wheel´.
_ Quantum-leaps in performance
 hy use Benchmarking
_ An effective µwake-up call¶ and helps to make
a strong case for change

_ Practical ways in which step changes in

performance can be achieved by learning from
others who have already undertaken
comparable changes

_ The impetus for seeking new ways of doing

things and promotes a culture that is receptive
to fresh approaches and ideas

_ Opportunities for staff to learn new skills and

be involved in the transformation process from
the outset.
_ ±ocal industry is not yet well developed
and is sprouting its wings.
_ Cultural growth and professionalism is
inchoate.
_ The leading enterprises are foreign
based whether pharmaceuticals,
automobiles or other FMCGs.
_ These transnational companies have
nurtured a professional culture
_ The professional culture has paid TNCs
in Pakistan through huge revenues.

_ MNCS have small market share volume

wise and high share price wise.

_ National companies share is greater

volume wise and fewer revenues wise.
_ A list of top ten pharmaceutical
companies in Pakistan is filled with
the MNCs

_ Same situation exists in the

beverages, automobile, electronics
and FMCGs.
_ Since TNCs are leading in the
competition, they can be
benchmarked by the striving
national companies.
_ Every aspect of the business
where TNCs outperform their local
competitors can be benchmarked.
_ These aspects include

Organizational culture
Marketing strategies
Operational activities
Financial aspects
Human resource
Or any other aspect
V

 

_ Internal benchmarking

_ External benchmarking

_ Functional benchmarking:
Internal benchmarking
Õ
ÕÕ

sharing opinions _ Easier to implement

between _ Easier to access data
departments
within the same
organisation Õ
ÕÕ

_ External ideas blocked

External Benchmarking
Õ
 
r Comparison with _ Helps to measure
external organisations one¶s own
to discover new ideas, performance
methods, products and
services. _ Helps to search for
± The gap between best practices
internal and external 
 
practices displays the _ Takes time
way where to change
and if there is any _ Requires support
need to change. _ ±egal/ethical isssues
_ Industrial espionage
Functional Benchmarking:

Comparative Õ
 
research to seek
world-class _ Discovering innovative
excellence by practices
comparing business
performance not 
 :
only against
competitors but also _ Not suitable for every
against the best organisation
businesses operating
in different industry
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METHODO±OGY OF BENCHMARKING

AT&T
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XEROX
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EXAMP±RY SPIDER CHART

FOR BENCHMARKING