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Strategic benchmarking is the process of deciding upon best practices as they relate to the strategies for reaching organizational goals. The practice includes a study of elements such as core competencies, process capability and strategic intent and alliances. It primarily is an assessment of how the company is managing external changes with things such as competitors, the industry and the market overall. The goal is to devise the ideal strategy for improving organizational performance. This includes learning about the strategies of other organizations to improve upon them.
Assessment of customer needs and expectations is a common task of strategic benchmarking. Common methods used to collect information about this group include surveys, interviews and the study of market statistics. After the gap between what the company offers and what customers want is defined, a strategy can be devised to close it. Often, a company will attempt to gather as much information as possible from customers of the competitor, in addition to polling its own customers.
Both internal and external comparisons can help with the process of strategic benchmarking. Analysis of a group that is performing well within a company can help provide a framework for creating new strategies for groups that are not as successful. External elements such as competing companies also can help provide guidance, although they generally will not have the same information available that is available from internal groups.
Strategic benchmarking also includes using comparisons with external elements to devise new goals for the organization. This can include devising new services or products and training staff members to react to changes in the external environment. It also might necessitate altering processes so that they will help a company keep up with its competition.
Successful organizations that are in different industries can also provide inspiration for strategic benchmarking. A company might examine a particularly successful process or the company’s practices overall to determine what has helped it to succeed. Then an organization typically will attempt to create a strategy that will enable it to improve upon that model.
The strategic method is one of four types of benchmarking, along with product benchmarking, best practices benchmarking and functional benchmarking. These methods can be used individually or together. Some companies will use all four types in sequence.
Product benchmarking primarily consists of a competitive analysis of similar offerings in the market. Best practices benchmarking is a detailed study of business processes. Functional benchmarking is focused on how various business functions operate.