3.1 Strategic Evaluation

Benchmarking

Benchmarking entails the process of analyzing another company or its work based on given standard results and comparing them to your company. It is a humble way of admitting that there are processes in another company which are more effective and successful and hence trying to learn how to match or even surpass the other company at these processes.

Steps involved in evaluating performance using benchmarking

The first benchmarking step entails selecting the process and building support. This involves selecting the most suitable business process to benchmark. The second step of benchmarking involves determining the state of the current business environment. Failure to have a clear understanding of the business environment and the impact of specific business processes on the overall performance may negatively affect a firm. The third step of benchmarking is determining the areas of improvement (Taschner, 2016). The step helps in ensuring that the business focuses on improving on its weaknesses. The fourth step of benchmarking entails considering the performance gap of the business as a way of understanding the efforts to be made. The fifth step of benchmarking is designing an action plan on how to improve on specific areas, learnt from the other company (Taschner, 2016). Finally, the sixth step is to have a continuous improvement plan that will help a firm improve in the specific processes it was targeting to improve.

Benefits of benchmarking

Benchmarking greatly helps a firm to improve on its areas of weaknesses and enhance its future performances. It also enables a mindset and culture of continuous improvements in various process in a company (Taschner, 2016). Through benchmarking, a firm can also easily monitor its performance and manage change. Finally, it can help in drilling down into performance gaps, where areas of improvement can be identified.

References

Taschner, A. (2016). Improving SME logistics performance through benchmarking. Benchmarking: An International Journal, 1780-1797. Retrieved from https://doi.org/10.1108/BIJ-03-2015-0029