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continuous improvement. The team gathered data on the best features of all the top-selling cars in the world. No car was omitted and no feature was overlooked. employee and supplier involvement etc . Ford president. customer-centric focus. In implementing the direction. directed the Ford team in charge of the Taurus' car project that they should pinpoint all the features of all the "best in class" cars and ensure that Taurus carried all those features. the Ford team naturally used benchmarking.The example of Ford Motor company's development of its Taurus model is an off quoted one on Benchmarking. Months of studies conducted on 50 competing models (sourced from different manufacturers) provided valuable insights on quality perceptions.

instead of mere improvement. . and to replicate them to enhance its own competitive advantage.Firms Use Certain Tools in Diagnosing and Building CA (Competitive advantage ) Two useful tools in identifying and building competitive advantage are: (i) Benchmarking (ii) Value chain analysis Benchmarking Benchmarking can be described as the process of improving one's performance by locating benchmarks/ standards in other firms and replicating them in one's own organization. an attitude and a practice that ensures excellence. It is a learning process. by which a firm seeks to identify best practices that produce superior results in other firms. McKinsey & Co views benchmarking as a skill.

in benchmarking. it bridges the gap. with benchmarking. . unlike with inter-firm comparison. Second. It helps the firm secure a model for emulation. It has an eye-opening effect on them. First. companies go a step beyond inter-firm comparison and trace the best practices across industries and across countries. firms encourage their internal departments to benchmark against one another and upgrade their performance. gathering still higher standards for emulation. Third. then. Analyzing other players and locating the best practices is the first task in benchmarking. benchmarking does not stop with comparison. This externally oriented approach makes people in the firm aware of the distance they have to travel in achieving excellence. And. The firm then identifies and quantifies the performance gap .The gap between its own performance and the benchmark.Benchmarking has larger scope than inter-firm comparison Benchmarking is larger than inter-firm comparison.

. against direct competitors. Internal benchmarking means comparisons within the organization. here. Functional benchmarking refers to comparison of the firm's performance in a specific functional area with other firms. i. in any industry. between related divisions. typically.e. the firm's performance in a universal work process (example: billing) is compared with that of the best anywhere in the world.Types of benchmarking Firms resort to four different types of benchmarking: 1) 2) 3) 4) Internal. The distinction among them lies essentially in the scope of comparison. Functional. Competitive Generic. Generic benchmarking refers to comparison across companies and industries on the universal level. Competitive benchmarking is the comparison of a company's performance against the best in the same industry. site-to-site and department-to-department comparisons.