Definition: Strategic benchmarking compares a company’s processes to those of industry leaders, analyzes them, and makes the required changes at the organizational level to align them with the company’s goals and long-term plans.
Strategic benchmarking is a step above traditional benchmarking. Businesses assess organizational procedures and capabilities, review relationships, and finalize strategic planning to gain a competitive advantage.
The goal is to plan a strategy to achieve higher efficiency after learning from the industry leaders.
Strategic benchmarking includes internal and external comparisons.
In internal comparison, the low-performing unit is compared with the efficient unit and finds ways to increase the performance of the lower performance unit.
External comparison entails comparing and learning from competitors to improve the flaws of the business process and obtain a competitive edge.
The goal of strategic benchmarking is not to just improve current procedures or operations. It can also be used by businesses to announce new items. Businesses can use this tool to research competitor product launch strategies, market feedback, and the competitor’s response to the input.
Based on this data, businesses can launch products with a better prospect of success.
Performance benchmarking and process benchmarking are the other two benchmarking methods.
Benchmarking Vs. Competitor Research
Benchmarking focuses on all managerial aspects, including employees, process, management, procedure, etc. On the other hand, competitor research is focused on the performance measures of the competitors.
Also, benchmarking is mostly a continuous process, while competitive research is a one-off event to solve any specific issue the business faces.
Pros of Strategic Benchmarking
- Provides a guide to developing an organization.
- Prioritize changes to be implemented to achieve success
- Set competitive priorities
- Provides new ideas and best industry practices
- Help improve organizational performance
- Improve brand recognition
- Align the core competencies of business
- It helps identify an organization’s weaknesses and strength
Cons of Strategic Benchmarking
- Sometimes information is not complete or inaccurate for analysis
- It might lead to intellectual property issues and not following the right method
- Resistance from the ground level employees to implementing changes
Summary
Strategic benchmarking takes a long-term approach to company objectives and strategic planning. It assists a company in improving its procedures and operations while avoiding needless processes that do not contribute to the company’s success.