What are examples of competitive benchmarking

Benchmarking

Benchmarking definition

Benchmarking refers to a comparison with or an orientation towards other companies - especially best companies (best practicerelated to the research question).

The benchmarking can relate, among other things, to individual processes ("Why do they have an assembly time of 12 hours per car - and we have 20 hours?"; "Why are their delivery times 2 days - and ours 5 days?"), But also to products ( Why do their products last 10 years - and ours only 5 years? ").

Benchmarking example

A premium manufacturer in the automotive industry compares itself with its main competitor. The competitor has an EBIT margin of 10%, while the premium manufacturer only has an EBIT margin of 6%.

On the one hand, the 10% prove that a higher margin is possible in reality. On the other hand, benchmarking also includes the analysis of why there is a difference of 4% or where the individual causes are (lower sales prices, higher material costs, longer assembly times, etc.).

In benchmarking, one tries to learn from others who seem to be doing better (analysis) and to get closer to the "role model" through improvement measures (action, implementation).

Besides the above external benchmarking or. Competitive benchmarking (Comparison with other companies) there is also one internal benchmarking, in which e.g. branches or sales offices of a company are compared with one another.

The benchmarking does not have to be carried out within the industry, you can also e.g.

  • Compare functions such as the preparation of the annual financial statements with companies from different industries ("How many days does it take to complete and publish the annual financial statements?" functional benchmarking) or
  • Compare processes across industries, e.g. the average response time of the customer service of a machine manufacturer with that of a telecommunications provider (so-called. generic benchmarking).

Benchmarking usually takes place over Key figures Instead of: profitability, margins, sales per square meter of sales area, throughput times, etc. are compared with one another.