Benchmarking is a systematic and continuous process involving the comparison of characteristics of the best products, services and processes in order to improve business performance.

There are four different categories of benchmarking:

1- Benchmarking of competitive advantages: it aims at creating knowledge about factors on which the competitive advantages of competitors and other companies are based. The goal is to improve the company’s long-run competitive advantages.
2. Benchmarking of strategies: it aims at creating knowledge about the specifics of strategies used by competitors and other companies that lead to the successful achievement of objectives. The purpose is to use this knowledge in order to improve the effectiveness of strategies that lead to the realization of strategic objectives in the long run.
3. Process benchmarking: gain knowledge about the characteristics of planning, designing, executing and controlling various business processes and activities by which competitors and other companies successfully implement set strategies. The goal is to improve the efficiency of implementing their own strategies in the long run.
4. Performance benchmarking: create knowledge about competitors’ and other companies’ performance in order to assess comparatively the company’s own business performance and to improve the quality of planning strategic objectives.

The benefits of benchmarking in strategic management can be summarized in the following points:

1. it enables more effective strategic planning and controlling
2. it lowers the costs of incorrect business decisions
3. it enables a company’s efficiency to increase through the successful design and implementation of restructuring business processes and their continuous improvement
4. it helps in solving business problems
5. it adds an important element to the continuous education of employees, encourages their innovativeness, creativity and contributes to the creation of new ideas
6. it enables a relative assessment of the business success and effectiveness of diverse business factors
7. it encourages changes and fosters special knowledge, which enables greater flexibility and faster adaptation to the changing business environment

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