1.1. Benchmarking: concept, goals and objectives
Russia's transition to new system management, of course, affected all aspects of the social, socio-economic and cultural life of the population, especially with regard to entrepreneurship. The bulk of the managers of Soviet enterprises knew about competition only in general terms from textbooks; issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans); increasing profits could only be thought about, as was supposed, in bourgeois countries. The low interest in the business was also due to the fact that the enterprises were not the property of the manager.
Today, management principles, goals and methods of achieving goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service to make competent and timely management decisions to improve business efficiency. Marketing services often engage in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, search and formation of optimal, but mobile product, price, sales policy, as well as strategic planning of product movement on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system is ensured in market conditions, taking into account the state of internal and external environment. Marketing activities are based on conducted marketing research, since on their basis a strategy and program of marketing activities is developed, the use of which will help improve the company’s productivity and maximum satisfaction of the needs of the consumer or client. results marketing research most important for leadership, as well as the adoption of entrepreneurial and marketing solutions, to eliminate or reduce the uncertainty of external and internal conditions of behavior of subjects of the marketing system. It is almost impossible to avoid risk, but it is possible to predict, prevent or mitigate adverse consequences in advance. A minimum of uncertainty is what you need to strive for, because it’s not for nothing that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problematic situations that the organization may encounter in the process marketing activities. Thus, to effectively organize the work of an organization, it is not enough for management or a company to have information only about internal features the state of the company and production and economic activity, this approach is irrelevant and will not stand the test of time. Modern successful businessmen give preference to continuous strategic planning of all production, marketing and commercial activities organizations, while operational planning does not lose its significance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to carry out analysis and draw conclusions; there was a need to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and areas of development of marketing and management. Practice has proven that the classic definition of marketing, implying the well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. IN Lately Other areas of modern marketing (interaction marketing, strategic marketing orientation, etc.) appeared and began to be introduced into practice; benchmarking was and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the “Russian ear” and relatively recently began to be used in Russia; it does not have a literal translation into Russian. The term “benchmarking” comes from the word benchmark, which means a mark against some established criterion (for example, a mark on a sign prohibiting children shorter than it from entering an attraction). We can say that a benchmark is something that has a certain quantity and quality that can be used as a standard or standard when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographic location. Benchmarking is the art of finding or discovering what others do best, and then learning, improving and applying others' methods of work. It may seem to the average person that there is nothing unusual or new here, that we're talking about about good old but condemned methods (such as espionage, copying, copycat business or technology). Indeed, whether you like it or not, you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” were carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. Some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own effectiveness. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking V developed countries has long won its “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course not in modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning “the effort, concern, concern of a better (leader) to become an even better (leader).” In China, when talking about benchmarking, they often remember the rule of the Chinese general Sun Tzu: “When you know your enemy and know yourself, you are not afraid of the result of a hundred wars.” On modern stage the use of benchmarking thanks to the main principle “from best to best” leads to life and success for many companies in the USA, Japan, Western Europe. Benchmarking was first used in 1972 at the initiative of the Institute strategic planning Cambridge (USA). Research and consulting organization PIMS, which studied the extent of the impact marketing strategies for profit, found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience the best enterprises who have achieved success under similar conditions.
In 1979, a well-known large American company began the Competitiveness Benchmarking Project to conduct a comprehensive analysis of the costs and quality of its own products in comparison with a similar Japanese company. The project turned out to be very successful and attracted a lot of attention. After that, benchmarking began to spread intensively among specialists in the United States and was used in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to give him an accurate description.
The Center for Productivity and Quality (Bectinghaus) views benchmarking as a continuous process of detailed research into best practices that contribute to rapidly improving competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of competitive analysis, but the use of benchmarking is more effective because it represents a more detailed, formalized and streamlined methodology compared to the method or approach of competitive analysis. Today's benchmarking– a necessary component of the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking contributes to the rapid, low-cost identification and prevention of problematic situations in logistics systems related to areas close to the buyer, order fulfillment and transportation.
Benchmarking clearly shows where cost or quality problems may arise in a company or market, and also shows where an organization ranks among its competitors. He finds and identifies problems in the course of work, specifying them.
Many economics and marketing specialists are convinced that benchmarking should become a permanent process in a company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and framework management functions, however, the consumer remains the main source of information about products, the market and competitors.
Benchmarking can be considered a way to evaluate the strategies and goals of activities in comparison with more successful similar organizations in order to take their place in the market over the long term.
Many companies using benchmarking are convinced that it contributes to reliable competitiveness, as well as the creation of prerequisites for constantly monitoring the level of company performance in the context of internationalization of procurement processes of raw materials and materials.
Benchmarking experience is also used to determine a company's success strategy. Close attention is paid to the following questions: who? How? Why? (Which company climbed to the top of the competition? Why own organization didn't become the best in your field? What can be changed and what needs to be preserved in the enterprise to make it the best? How to implement the appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. The most important areas of activity for employees and the company as a whole are value-oriented planning, as well as literacy, communication skills, competence in the field of customer service, technology and culture entrepreneurial activity. Some believe that benchmarking is an activity that is directly related to clients, technology and business culture, and is also related to planning. In general, benchmarking can be classified as a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking represents the adoption of management methods from others, successfully existing companies and entrepreneurs in order to, by comparison with other areas of business activity or competitors, determine, identify weak sides your organization.
The application of benchmarking consists in a simplified version of four sequential actions:
1) awareness and analysis of the details of one’s own business processes.
Ideally, they should be known in detail at each stage of production, but it is better to regularly check the “health” of your organization to know weak spots and try to smooth out all negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, since no one will agree to bring the secret of their success, always achieved through hard work, both physical and intellectual, to you “on a silver platter.” Most often, if you do not take into account patented technologies, this is a big trade secret that is carefully protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales pattern, formal organization, etc.;
3) comparison of the results of their processes with the results of the analyzed companies. Here it is necessary to involve specialists; most often, organizations cope on their own;
4) introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial investments, attracting specialists or retraining your employees, mastering new technologies, introducing modern management and decision-making techniques. Thus, we can distinguish types of benchmarking. Here are just a few:
1) internal – the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors according to the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional – comparison by function (sales, purchasing, etc.).
Benchmarking is never a one-time analysis. In order for there to be returns and increase the efficiency of the enterprise, it is necessary to do benchmarking integral part work, a regular process of innovation and improvement in your business.
Benchmarking is popular in Japan and has been used there for a long time. Japanese companies have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called “me too,” which in some ways can be considered an extension of Sun Tzu’s rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. When predicting the effect that the use of benchmarking can give, it should be remembered that no one has ever disputed the fact of the benefits of sharing experience and analyzing it. However, “you shouldn’t paint everyone with the same brush,” because although many enterprises and types of activities or production are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need to use benchmarking must first be justified and proven.
To summarize, the benefit of benchmarking is that production processes, trading operations and marketing functions become most manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This could be the beginning, a new stage in the development of profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
To date, we have accumulated great amount interpretations of the concept of benchmarking. Some believe that it is a product of the consistent development of the concept of competitiveness, others say that benchmarking is a mobile algorithm for improving quality, while others classify it as an exotic novelty as a result of Japanese business practice. However, everyone agrees or more or less agrees with the definition that benchmarking is the process of finding, identifying and studying the best known methods of management and business.
1.2. Development and establishment of benchmarking
Benchmarking- this is a new word in the highest business circles of Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation, educated in the last century and correspondingly hardened, confuse it with industrial intelligence or espionage, hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since “that man from the hut opposite was doing much better than the rest of us.” What brings newness and interest to the term is business consultants, who are hired by many firms of all shapes and sizes to teach them how to keep an organization's revenues in line with those of similar companies. Benchmarking in the form it has now has not always existed; the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. IN late XIX century, the American engineer Frederick Taylor studied scientific methods of organizing work, which formed the basis of the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a quality control specialist, in which he identifies the periodization of management stages. Yes, he is considering four stages of change in management, which the world went through in the last half of the 20th century:
1) 1950-1970s – characterized by strict control by management “Management by Objectives”;
2) 1970-1980s – the period of assessment and comparison of values, characterized by the compilation of “value charts” - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s – the influence of competitors increases, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, “Beat The Competition”;
4) 1990s – beginning of XXI V. – “Focus on Processes”.
The most recent changes in management philosophy reflect an increased interest in competition and its analysis. This is caused by objective reasons, primarily by variations in the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only to determine and establish parameters, final criteria and control the processes of achieving them. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, responding to the requirements of modern times and current conditions, switched to how to correctly and quickly get ahead of the competitor’s performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. After defining the best way management and business management, it is necessary to answer the question: “How to do this better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, and also mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer of the targeted use of benchmarking was the Rank Xerox company, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Currently, benchmarking is considered one of the most effective areas of consulting. He is becoming more and more in demand and earning himself more and more popularity. Even government agencies, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its fundamentals to improve their processes and systems, although in Russia this is more typical for private organizations.
In Europe, this process is slow, but stable; the popularity of benchmarking remains very moderate. Significant differences in the understanding of business processes in different countries slow down its implementation in business processes various fields economy.
The basis of benchmarking the idea of comparative activity is laid down not only in relation to competing enterprises, but also to leading companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where objectives are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all components of the strategy development system, industry analysis processes and analysis of competitors' experience. To better understand benchmarking methods, you need to determine its relationship with strategic planning.
In order to rationally select areas of activity, the size of the required resource base, and create relationships between the areas of its activities, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves studying the degree and characteristics of competition, customer behavior patterns, the nature of behavior of suppliers of certain resources, barriers to entry into a market or economic sector, mobility and adaptability of production, as well as other specifics. Industry analysis prepares material for fairly accurate forecasting of industry average profit potential, and also identifies the reasons why some firms differ from others.
You need to start your industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical specifications, low price and etc.). Next, their impact on profitability as a whole and individually is determined.
The next stage is a detailed study of competition. First of all, it analyzes how important your line of business is for a competitor, i.e., how much resources and financial investments it will need to develop these lines. Here it is necessary to estimate the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how a competitor distributes available resources, in other words, what it has at the time of entering the market (product, price, sales and delivery system, marketing, customer service system), as well as the costs of its activities. We should not forget about another important factor - this is similar work of a competitor in the direction of research and development, which has a positive effect on the cost of its products, as well as necessary costs for marketing over a certain period of time.
After identifying the most profitable market segments and assessing your own competitive advantages it is necessary to choose a “model to follow.” To achieve the most effective results in a short time, benchmarking experts advise not just finding such organizations and accumulating data on their activities, “advanced” management decisions, but also to establish contacts with them. After the data has been collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next stage is to develop a plan, the goal of which is to achieve the highest efficiency of the changed processes.
After conducting an industry analysis and an analysis of competitors, it is recommended to begin developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, revising the pricing system, sales and delivery, marketing, personnel, technology, etc.
Voevodina N. A., Kulagina A. V., Loginova E. Yu., Tolberg V. B.
Benchmarking is a tool for developing competitive advantages
Practical guide
Chapter 1. What is benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system, of course, affected all aspects of the social, socio-economic and cultural life of the population, especially with regard to entrepreneurship. The bulk of the managers of Soviet enterprises knew about competition only in general terms from textbooks; issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans); increasing profits could only be thought about, as was supposed, in bourgeois countries. The low interest in the business was also due to the fact that the enterprises were not the property of the manager.
Today, management principles, goals and methods of achieving goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service to make competent and timely management decisions to improve business efficiency. Marketing services often engage in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search and formation of an optimal, but flexible product, pricing, and sales policy, as well as strategic planning of the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system is ensured in market conditions, taking into account the state of the internal and external environments. Marketing activities are based on conducted marketing research, since on their basis a strategy and program of marketing activities is developed, the use of which will help improve the company’s productivity and maximum satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making business and marketing decisions, for eliminating or reducing the uncertainty of external and internal conditions of behavior of subjects of the marketing system. It is almost impossible to avoid risk, but it is possible to predict, prevent or mitigate adverse consequences in advance. A minimum of uncertainty is what you need to strive for, because it’s not for nothing that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problematic situations that an organization may encounter in the process of marketing activities. Thus, to effectively build the work of an organization, it is not enough for management or a company to have information only about the internal features of the state of the company and production and economic activities; such an approach is irrelevant and will not stand the test of time. Modern successful businessmen give preference to constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its importance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to carry out analysis and draw conclusions; there was a need to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and areas of development of marketing and management. Practice has proven that the classic definition of marketing, implying the well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic marketing orientation, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the “Russian ear” and relatively recently began to be used in Russia; it does not have a literal translation into Russian. The term “benchmarking” comes from the word benchmark, which means a mark against some established criterion (for example, a mark on a sign prohibiting children shorter than it from entering an attraction). We can say that a benchmark is something that has a certain quantity and quality that can be used as a standard or standard when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographic location. Benchmarking is the art of finding or discovering what others do best, and then learning, improving and applying others' methods of work. It may seem to the average person that there is nothing unusual or new here, that we are talking about good old, but condemned methods (such as espionage, copying, imitation of business or technology). Indeed, whether you like it or not, you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” were carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. Some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own effectiveness. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won its “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning “the effort, concern, concern of a better (leader) to become an even better (leader).” In China, when talking about benchmarking, they often remember the rule of the Chinese general Sun Tzu: “When you know your enemy and know yourself, you are not afraid of the result of a hundred wars.” At the present stage, the use of benchmarking, thanks to the main principle “from best to best,” leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). Research and consulting organization PIMS, which studied the impact of marketing strategies on profits, found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best companies that have achieved success in similar conditions.
In 1979, a well-known large American company began the Competitiveness Benchmarking Project to conduct a comprehensive analysis of the costs and quality of its own products in comparison with a similar Japanese company. The project turned out to be very successful and attracted a lot of attention. After that, benchmarking began to spread intensively among specialists in the United States and was used in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to give him an accurate description.
The Center for Productivity and Quality (Bectinghaus) views benchmarking as a continuous process of detailed research into best practices that contribute to rapidly improving competitive performance.
Chapter 1. What is benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system, of course, affected all aspects of the social, socio-economic and cultural life of the population, especially with regard to entrepreneurship. The bulk of the managers of Soviet enterprises knew about competition only in general terms from textbooks; issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans); increasing profits could only be thought about, as was supposed, in bourgeois countries. The low interest in the business was also due to the fact that the enterprises were not the property of the manager.
Today, management principles, goals and methods of achieving goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service to make competent and timely management decisions to improve business efficiency. Marketing services often engage in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search and formation of an optimal, but flexible product, pricing, and sales policy, as well as strategic planning of the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system is ensured in market conditions, taking into account the state of the internal and external environments. Marketing activities are based on conducted marketing research, since on their basis a strategy and program of marketing activities is developed, the use of which will help improve the company’s productivity and maximum satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making business and marketing decisions, for eliminating or reducing the uncertainty of external and internal conditions of behavior of subjects of the marketing system. It is almost impossible to avoid risk, but it is possible to predict, prevent or mitigate adverse consequences in advance. A minimum of uncertainty is what you need to strive for, because it’s not for nothing that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problematic situations that an organization may encounter in the process of marketing activities. Thus, to effectively build the work of an organization, it is not enough for management or a company to have information only about the internal features of the state of the company and production and economic activities; such an approach is irrelevant and will not stand the test of time. Modern successful businessmen give preference to constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its importance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to carry out analysis and draw conclusions; there was a need to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and areas of development of marketing and management. Practice has proven that the classic definition of marketing, implying the well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic marketing orientation, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the “Russian ear” and relatively recently began to be used in Russia; it does not have a literal translation into Russian. The term “benchmarking” comes from the word benchmark, which means a mark against some established criterion (for example, a mark on a sign prohibiting children shorter than it from entering an attraction). We can say that a benchmark is something that has a certain quantity and quality that can be used as a standard or standard when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographic location. Benchmarking is the art of finding or discovering what others do best, and then learning, improving and applying others' methods of work. It may seem to the average person that there is nothing unusual or new here, that we are talking about good old, but condemned methods (such as espionage, copying, imitation of business or technology). Indeed, whether you like it or not, you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” were carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. Some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own effectiveness. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won its “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning “the effort, concern, concern of a better (leader) to become an even better (leader).” In China, when talking about benchmarking, they often remember the rule of the Chinese general Sun Tzu: “When you know your enemy and know yourself, you are not afraid of the result of a hundred wars.” At the present stage, the use of benchmarking, thanks to the main principle “from best to best,” leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). Research and consulting organization PIMS, which studied the impact of marketing strategies on profits, found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best companies that have achieved success in similar conditions.
In 1979, a well-known large American company began the Competitiveness Benchmarking Project to conduct a comprehensive analysis of the costs and quality of its own products in comparison with a similar Japanese company. The project turned out to be very successful and attracted a lot of attention. After that, benchmarking began to spread intensively among specialists in the United States and was used in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to give him an accurate description.
The Center for Productivity and Quality (Bectinghaus) views benchmarking as a continuous process of detailed research into best practices that contribute to rapidly improving competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of competitive analysis, but the use of benchmarking is more effective because it represents a more detailed, formalized and streamlined methodology compared to the method or approach of competitive analysis. Today's benchmarking– a necessary component of the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking contributes to the rapid, low-cost identification and prevention of problem situations in logistics systems related to areas close to the buyer, order fulfillment and transportation.
Benchmarking clearly shows where cost or quality problems may arise in a company or market, and also shows where an organization ranks among its competitors. He finds and identifies problems in the course of work, specifying them.
Many economics and marketing specialists are convinced that benchmarking should become a permanent process in a company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and framework of management functions, but the consumer remains the main source of information about products, the market and competitors.
Many companies using benchmarking are convinced that it contributes to reliable competitiveness, as well as the creation of prerequisites for constantly monitoring the level of company performance in the context of internationalization of procurement processes of raw materials and materials.
Benchmarking experience is also used to determine a company's success strategy. Close attention is paid to the following questions: who? How? Why? (Which company climbed to the top of the competition? Why didn’t your own organization become the best in its field? What can be changed and what needs to be preserved in the enterprise to become the best? How to implement the appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. The most important areas of activity for employees and the company as a whole are planning focused on creating value, as well as literacy, communication skills, competence in the field of working with clients, technology and business culture. Some believe that benchmarking is an activity that is directly related to clients, technology and business culture, and is also related to planning. In general, benchmarking can be classified as a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking represents the adoption of management methods from other, successfully existing companies and entrepreneurs in order to, through comparison with other areas of business activity or competitors, determine and identify the weaknesses of their organization.
The application of benchmarking consists in a simplified version of four sequential actions:
1) awareness and analysis of the details of one’s own business processes.
Ideally, they should be known thoroughly at each stage of production, but it is better to regularly check the “health” of your organization in order to know the weak points and try to smooth out all negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, since no one will agree to bring the secret of their success, always achieved through hard work, both physical and intellectual, to you “on a silver platter.” Most often, if you do not take into account patented technologies, this is a big trade secret that is carefully protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales pattern, formal organization, etc.;
3) comparison of the results of their processes with the results of the analyzed companies. Here it is necessary to involve specialists; most often, organizations cope on their own;
4) introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial investments, attracting specialists or retraining your employees, mastering new technologies, introducing modern management and decision-making techniques. Thus, we can distinguish types of benchmarking. Here are just a few:
1) internal – the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors according to the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional – comparison by function (sales, purchasing, etc.).
Benchmarking is never a one-time analysis. In order for there to be a return and an increase in the efficiency of the enterprise, it is necessary to make benchmarking an integral part of the work, a regular process of innovation and improvement in your business.
Benchmarking is popular in Japan and has been used there for a long time. Japanese companies have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called “me too,” which in some ways can be considered an extension of Sun Tzu’s rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. When predicting the effect that the use of benchmarking can give, it should be remembered that no one has ever disputed the fact of the benefits of sharing experience and analyzing it. However, “you shouldn’t paint everyone with the same brush,” because although many enterprises and types of activities or production are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need to use benchmarking must first be justified and proven.
To summarize, the benefit of benchmarking is that production processes, sales operations and marketing functions become more manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This could be the beginning, a new stage in the development of profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
Today, a huge number of interpretations of the concept of benchmarking have accumulated. Some believe that it is a product of the consistent development of the concept of competitiveness, others say that benchmarking is a mobile algorithm for improving quality, while others classify it as an exotic novelty as a result of Japanese business practice. However, everyone agrees or more or less agrees with the definition that benchmarking is the process of finding, identifying and studying the best known methods of management and business.
1.2. Development and establishment of benchmarking
Benchmarking- this is a new word in the highest business circles of Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation, educated in the last century and correspondingly hardened, confuse it with industrial intelligence or espionage, hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since “that man from the hut opposite was doing much better than the rest of us.” What brings newness and interest to the term is business consultants, who are hired by many firms of all shapes and sizes to teach them how to keep an organization's revenues in line with those of similar companies. Benchmarking in the form it has now has not always existed; the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. At the end of the 19th century, American engineer Frederick Taylor explored scientific methods of organizing work, which formed the basis for the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a quality control specialist, in which he identifies the periodization of management stages. Yes, he is considering four stages of change in management, which the world went through in the last half of the 20th century:
1) 1950-1970s – characterized by strict control by management “Management by Objectives”;
2) 1970-1980s – the period of assessment and comparison of values, characterized by the compilation of “value charts” - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s – the influence of competitors increases, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, “Beat The Competition”;
4) 1990s – beginning of the 21st century. – “Focus on Processes”.
The most recent changes in management philosophy reflect an increased interest in competition and its analysis. This is caused by objective reasons, primarily by variations in the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only to determine and establish parameters, final criteria and control the processes of achieving them. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, responding to the requirements of modern times and current conditions, switched to how to correctly and quickly get ahead of the competitor’s performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. Once you have determined the best way to manage and do things, you need to answer the question: “How can we do this better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, and also mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer of the targeted use of benchmarking was the Rank Xerox company, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Currently, benchmarking is considered one of the most effective areas of consulting. He is becoming more and more in demand and earning himself more and more popularity. Even government agencies, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its fundamentals to improve their processes and systems, although in Russia this is more common for private organizations.
In Europe, this process is slow, but stable; the popularity of benchmarking remains very moderate. Significant differences in the understanding of business processes in different countries slow down its implementation in business processes in various sectors of the economy.
The basis of benchmarking the idea of comparative activity is laid down not only in relation to competing enterprises, but also to leading companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where objectives are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all components of the strategy development system, industry analysis processes and analysis of competitors' experience. To better understand benchmarking methods, you need to determine its relationship with strategic planning.
In order to rationally select areas of activity, the size of the required resource base, and create relationships between the areas of its activities, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves studying the degree and characteristics of competition, customer behavior patterns, the nature of behavior of suppliers of certain resources, barriers to entry into a market or economic sector, mobility and adaptability of production, as well as other specifics. Industry analysis prepares material for fairly accurate forecasting of industry average profit potential, and also identifies the reasons why some firms differ from others.
You need to start your industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical characteristics, low price, etc.). Next, their impact on profitability as a whole and individually is determined.
The next stage is a detailed study of competition. First of all, it analyzes how important your line of business is for a competitor, i.e., how much resources and financial investments it will need to develop these lines. Here it is necessary to estimate the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how a competitor distributes available resources, in other words, what it has at the time of entering the market (product, price, sales and delivery system, marketing, customer service system), as well as the costs of its activities. We should not forget about another important factor - this is the similar work of a competitor in the direction of research and development, which has a positive effect on the cost of its products, as well as the necessary marketing costs over a certain period of time.
After identifying the most profitable market segments and assessing your own competitive advantages, you need to choose a “model to follow.” To achieve the most effective results in a short time, benchmarking experts advise not only finding such organizations and accumulating data on their activities and “advanced” management decisions, but also establishing contacts with them. After the data has been collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next stage is to develop a plan, the goal of which is to achieve the highest efficiency of the changed processes.
After conducting an industry analysis and an analysis of competitors, it is recommended to begin developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, revising the pricing system, sales and delivery, marketing, personnel, technology, etc.
According to published data from the well-known consulting company Bain & Co, over the past two years, benchmarking has become one of the three most common methods of business management, but this is typical for large international corporations. Its popularity is based on the fact that it helps to modernize business processes quite quickly and at lower costs. It reflects and details the work of leading companies and helps achieve the same, and perhaps even better results.
Reasons for the growing popularity of benchmarking V modern world are:
1) global competition. In the context of growing international integration and globalization of business, firms are faced with the need for a comprehensive and detailed study and subsequent application of the best achievements of competitors for the purposes of their own well-being and development;
2) reward for quality. Recently, promotions, competitions, reviews and tenders held at the national and international levels to identify and reward quality leading organizations have become increasingly widespread and received public response. The conditions for participation in such events require, in addition to the demonstration by participating firms of the competitive advantages of their products, the mandatory use of the concept of benchmarking in the course of normal, systematic management of the company;
3) the need to comply with modern rapidly changing conditions, adapt to them, as well as the introduction of world achievements in the field of production and business technologies. To avoid being left behind by their competitors, all companies (no matter size or industry) should regularly study other companies to apply best practices in manufacturing and business technology.
There are enterprises and organizations in Russia that use benchmarking, but so far there are very few of them. But management always encourages when middle and senior managers enter into everyday life during non-working hours, they engage in informal relationships with colleagues or competitors, and then take note and implement each other’s best achievements in their companies. The experience of many organizations, as well as research, prove that direct communication with colleagues leads to the most valuable innovations for a particular business: ideas and knowledge, which very often leads to the successful, quick and easy implementation of new methods and forms of management, more efficient distribution and use resources, etc. But this model “works” only in those organizations where management is ready for this. Interested managers have enormous potential for the development of the company, but the ability to competently create motivation is the prerogative of management; this also needs to be learned and learned from colleagues.
By level of openness business can be divided into two categories:
1) organizations that profess the principle of secrecy of their activities, carefully hiding absolutely all information about their company;
2) maximum public companies, confident that while all competitors are far behind and by the time they catch up, they will be able to come up with something new. Worldwide famous company General Motors has created and made its database available to everyone. This is mainly for suppliers to plan their production better.
Exchange of experience is a thing known to Russian enterprises since the times of the USSR; it is not new, only now it is customary to call it benchmarking in the Western manner. Implementation of benchmarking for anyone Russian enterprise is usually difficult, which is due to objective reasons (such as old technologies and equipment, lack of young specialists, low economic indicators) – we have to re-train people, sometimes just explain in detail and clearly why all this is needed. However, if desired, the process can be established quite quickly and clearly. In some way, all services of the organization are engaged in collecting, processing and implementing new experience.
At the initial stage, in the organization concerned, each department collects information about its profile. Very often the sources are open reports from Western and Russian companies, special industry press, an integral part of modernity - the Internet. Information is accumulated (collected) during trips and business trips to Russian and Western companies. Entrepreneurs quite actively attend specialized exhibitions: almost every month, trained enterprise employees travel to collect information. All collected information is accumulated and analyzed in a single report, which is intended for the board of directors. Next, the organization’s indicators are considered in relation to the industry average, after which it becomes clear in which of them the organization comes out ahead or lags behind its competitors. After this, tactics for improving performance are developed. Now, for example, many large Russian factories started to increase labor productivity, the impetus for this was the experience of the Volvo company, where a specialist from one domestic plant studied management, and later competitors also took advantage of his experience, so it can be useful to “look around.”
In the West, where benchmarking has long been popular, the following practice has been established: a company, actively adopting the experience of others, certainly shares its own. Most successful enterprises publish detailed reports on the results of their activities and host competitors. Western principle successful work“if you are open, it means you are developing” in Russia simply does not work and will not work for a number of objective reasons (such as: an increase in the number of inspections by competent authorities, attracting the attention of tax and other services, and many others).
Current page: 1 (book has 15 pages total) [available reading passage: 9 pages]
Voevodina N. A., Kulagina A. V., Loginova E. Yu., Tolberg V. B.
Benchmarking is a tool for developing competitive advantages
Practical guide
Chapter 1. What is benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system, of course, affected all aspects of the social, socio-economic and cultural life of the population, especially with regard to entrepreneurship. The bulk of the managers of Soviet enterprises knew about competition only in general terms from textbooks; issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans); increasing profits could only be thought about, as was supposed, in bourgeois countries. The low interest in the business was also due to the fact that the enterprises were not the property of the manager.
Today, management principles, goals and methods of achieving goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service to make competent and timely management decisions to improve business efficiency. Marketing services often engage in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search and formation of an optimal, but flexible product, pricing, and sales policy, as well as strategic planning of the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system is ensured in market conditions, taking into account the state of the internal and external environments. Marketing activities are based on conducted marketing research, since on their basis a strategy and program of marketing activities is developed, the use of which will help improve the company’s productivity and maximum satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making business and marketing decisions, for eliminating or reducing the uncertainty of external and internal conditions of behavior of subjects of the marketing system. It is almost impossible to avoid risk, but it is possible to predict, prevent or mitigate adverse consequences in advance. A minimum of uncertainty is what you need to strive for, because it’s not for nothing that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problematic situations that an organization may encounter in the process of marketing activities. Thus, to effectively build the work of an organization, it is not enough for management or a company to have information only about the internal features of the state of the company and production and economic activities; such an approach is irrelevant and will not stand the test of time. Modern successful businessmen give preference to constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its importance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to carry out analysis and draw conclusions; there was a need to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and areas of development of marketing and management. Practice has proven that the classic definition of marketing, implying the well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic marketing orientation, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the “Russian ear” and relatively recently began to be used in Russia; it does not have a literal translation into Russian. The term “benchmarking” comes from the word benchmark, which means a mark against some established criterion (for example, a mark on a sign prohibiting children shorter than it from entering an attraction). We can say that a benchmark is something that has a certain quantity and quality that can be used as a standard or standard when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographic location. Benchmarking is the art of finding or discovering what others do best, and then learning, improving and applying others' methods of work. It may seem to the average person that there is nothing unusual or new here, that we are talking about good old, but condemned methods (such as espionage, copying, imitation of business or technology). Indeed, whether you like it or not, you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” were carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. Some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own effectiveness. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won its “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning “the effort, concern, concern of a better (leader) to become an even better (leader).” In China, when talking about benchmarking, they often remember the rule of the Chinese general Sun Tzu: “When you know your enemy and know yourself, you are not afraid of the result of a hundred wars.” At the present stage, the use of benchmarking, thanks to the main principle “from best to best,” leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). Research and consulting organization PIMS, which studied the impact of marketing strategies on profits, found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best companies that have achieved success in similar conditions.
In 1979, a well-known large American company began the Competitiveness Benchmarking Project to conduct a comprehensive analysis of the costs and quality of its own products in comparison with a similar Japanese company. The project turned out to be very successful and attracted a lot of attention. After that, benchmarking began to spread intensively among specialists in the United States and was used in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to give him an accurate description.
The Center for Productivity and Quality (Bectinghaus) views benchmarking as a continuous process of detailed research into best practices that contribute to rapidly improving competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of competitive analysis, but the use of benchmarking is more effective because it represents a more detailed, formalized and streamlined methodology compared to the method or approach of competitive analysis. Today's benchmarking– a necessary component of the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking contributes to the rapid, low-cost identification and prevention of problem situations in logistics systems related to areas close to the buyer, order fulfillment and transportation.
Benchmarking clearly shows where cost or quality problems may arise in a company or market, and also shows where an organization ranks among its competitors. He finds and identifies problems in the course of work, specifying them.
Many economics and marketing specialists are convinced that benchmarking should become a permanent process in a company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and framework of management functions, but the consumer remains the main source of information about products, the market and competitors.
Many companies using benchmarking are convinced that it contributes to reliable competitiveness, as well as the creation of prerequisites for constantly monitoring the level of company performance in the context of internationalization of procurement processes of raw materials and materials.
Benchmarking experience is also used to determine a company's success strategy. Close attention is paid to the following questions: who? How? Why? (Which company climbed to the top of the competition? Why didn’t your own organization become the best in its field? What can be changed and what needs to be preserved in the enterprise to become the best? How to implement the appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. The most important areas of activity for employees and the company as a whole are planning focused on creating value, as well as literacy, communication skills, competence in the field of working with clients, technology and business culture. Some believe that benchmarking is an activity that is directly related to clients, technology and business culture, and is also related to planning. In general, benchmarking can be classified as a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking represents the adoption of management methods from other, successfully existing companies and entrepreneurs in order to, through comparison with other areas of business activity or competitors, determine and identify the weaknesses of their organization.
The application of benchmarking consists in a simplified version of four sequential actions:
1) awareness and analysis of the details of one’s own business processes.
Ideally, they should be known thoroughly at each stage of production, but it is better to regularly check the “health” of your organization in order to know the weak points and try to smooth out all negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, since no one will agree to bring the secret of their success, always achieved through hard work, both physical and intellectual, to you “on a silver platter.” Most often, if you do not take into account patented technologies, this is a big trade secret that is carefully protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales pattern, formal organization, etc.;
3) comparison of the results of their processes with the results of the analyzed companies. Here it is necessary to involve specialists; most often, organizations cope on their own;
4) introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial investments, attracting specialists or retraining your employees, mastering new technologies, introducing modern management and decision-making techniques. Thus, we can distinguish types of benchmarking. Here are just a few:
1) internal – the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors according to the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional – comparison by function (sales, purchasing, etc.).
Benchmarking is never a one-time analysis. In order for there to be a return and an increase in the efficiency of the enterprise, it is necessary to make benchmarking an integral part of the work, a regular process of innovation and improvement in your business.
Benchmarking is popular in Japan and has been used there for a long time. Japanese companies have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called “me too,” which in some ways can be considered an extension of Sun Tzu’s rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. When predicting the effect that the use of benchmarking can give, it should be remembered that no one has ever disputed the fact of the benefits of sharing experience and analyzing it. However, “you shouldn’t paint everyone with the same brush,” because although many enterprises and types of activities or production are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need to use benchmarking must first be justified and proven.
To summarize, the benefit of benchmarking is that production processes, sales operations and marketing functions become more manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This could be the beginning, a new stage in the development of profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
Today, a huge number of interpretations of the concept of benchmarking have accumulated. Some believe that it is a product of the consistent development of the concept of competitiveness, others say that benchmarking is a mobile algorithm for improving quality, while others classify it as an exotic novelty as a result of Japanese business practice. However, everyone agrees or more or less agrees with the definition that benchmarking is the process of finding, identifying and studying the best known methods of management and business.
1.2. Development and establishment of benchmarking
Benchmarking- this is a new word in the highest business circles of Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation, educated in the last century and correspondingly hardened, confuse it with industrial intelligence or espionage, hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since “that man from the hut opposite was doing much better than the rest of us.” What brings newness and interest to the term is business consultants, who are hired by many firms of all shapes and sizes to teach them how to keep an organization's revenues in line with those of similar companies. Benchmarking in the form it has now has not always existed; the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. At the end of the 19th century, American engineer Frederick Taylor explored scientific methods of organizing work, which formed the basis for the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a quality control specialist, in which he identifies the periodization of management stages. Yes, he is considering four stages of change in management, which the world went through in the last half of the 20th century:
1) 1950-1970s – characterized by strict control by management “Management by Objectives”;
2) 1970-1980s – the period of assessment and comparison of values, characterized by the compilation of “value charts” - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s – the influence of competitors increases, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, “Beat The Competition”;
4) 1990s – beginning of the 21st century. – “Focus on Processes”.
The most recent changes in management philosophy reflect an increased interest in competition and its analysis. This is caused by objective reasons, primarily by variations in the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only to determine and establish parameters, final criteria and control the processes of achieving them. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, responding to the requirements of modern times and current conditions, switched to how to correctly and quickly get ahead of the competitor’s performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. Once you have determined the best way to manage and do things, you need to answer the question: “How can we do this better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, and also mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer of the targeted use of benchmarking was the Rank Xerox company, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Currently, benchmarking is considered one of the most effective areas of consulting. He is becoming more and more in demand and earning himself more and more popularity. Even government agencies, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its fundamentals to improve their processes and systems, although in Russia this is more common for private organizations.
In Europe, this process is slow, but stable; the popularity of benchmarking remains very moderate. Significant differences in the understanding of business processes in different countries slow down its implementation in business processes in various sectors of the economy.
The basis of benchmarking the idea of comparative activity is laid down not only in relation to competing enterprises, but also to leading companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where objectives are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all components of the strategy development system, industry analysis processes and analysis of competitors' experience. To better understand benchmarking methods, you need to determine its relationship with strategic planning.
In order to rationally select areas of activity, the size of the required resource base, and create relationships between the areas of its activities, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves studying the degree and characteristics of competition, customer behavior patterns, the nature of behavior of suppliers of certain resources, barriers to entry into a market or economic sector, mobility and adaptability of production, as well as other specifics. Industry analysis prepares material for fairly accurate forecasting of industry average profit potential, and also identifies the reasons why some firms differ from others.
You need to start your industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical characteristics, low price, etc.). Next, their impact on profitability as a whole and individually is determined.
The next stage is a detailed study of competition. First of all, it analyzes how important your line of business is for a competitor, i.e., how much resources and financial investments it will need to develop these lines. Here it is necessary to estimate the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how a competitor distributes available resources, in other words, what it has at the time of entering the market (product, price, sales and delivery system, marketing, customer service system), as well as the costs of its activities. We should not forget about another important factor - this is the similar work of a competitor in the direction of research and development, which has a positive effect on the cost of its products, as well as the necessary marketing costs over a certain period of time.
After identifying the most profitable market segments and assessing your own competitive advantages, you need to choose a “model to follow.” To achieve the most effective results in a short time, benchmarking experts advise not only finding such organizations and accumulating data on their activities and “advanced” management decisions, but also establishing contacts with them. After the data has been collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next stage is to develop a plan, the goal of which is to achieve the highest efficiency of the changed processes.
After conducting an industry analysis and an analysis of competitors, it is recommended to begin developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, revising the pricing system, sales and delivery, marketing, personnel, technology, etc.
According to published data from the famous consulting company Bain & Co, over the past two years, benchmarking has become one of the three most common methods of business management, but this is typical for large international corporations. Its popularity is based on the fact that it helps to modernize business processes quite quickly and at lower costs. It reflects and details the work of leading companies and helps achieve the same, and perhaps even better results.
Reasons for the growing popularity of benchmarking in the modern world are:
1) global competition. In the context of growing international integration and globalization of business, firms are faced with the need for a comprehensive and detailed study and subsequent application of the best achievements of competitors for the purposes of their own well-being and development;
2) reward for quality. Recently, promotions, competitions, reviews and tenders held at the national and international levels to identify and reward quality leading organizations have become increasingly widespread and received public response. The conditions for participation in such events require, in addition to the demonstration by participating firms of the competitive advantages of their products, the mandatory use of the concept of benchmarking in the course of normal, systematic management of the company;
3) the need to comply with modern rapidly changing conditions, adapt to them, as well as the introduction of world achievements in the field of production and business technologies. To avoid being left behind by their competitors, all companies (no matter size or industry) should regularly study other companies to apply best practices in manufacturing and business technology.
There are enterprises and organizations in Russia that use benchmarking, but so far there are very few of them. But management always encourages middle and senior managers to enter into informal relationships with colleagues or competitors in everyday life outside of work, and then take note and implement each other’s best achievements in their companies. The experience of many organizations, as well as research, prove that direct communication with colleagues leads to the most valuable innovations for a particular business: ideas and knowledge, which very often leads to the successful, quick and easy implementation of new methods and forms of management, more efficient distribution and use resources, etc. But this model “works” only in those organizations where management is ready for this. Interested managers have enormous potential for the development of the company, but the ability to competently create motivation is the prerogative of management; this also needs to be learned and learned from colleagues.
By level of openness business can be divided into two categories:
1) organizations that profess the principle of secrecy of their activities, carefully hiding absolutely all information about their company;
2) companies that are as open as possible, confident that while all competitors are far behind and by the time they catch up, they will be able to come up with something new. The world-famous company General Motors has created and made its database available to everyone. This is mainly for suppliers to plan their production better.
Exchange of experience is a thing known to Russian enterprises since the times of the USSR; it is not new, only now it is customary to call it benchmarking in the Western manner. The implementation of benchmarking for any Russian enterprise is usually difficult, which is due to objective reasons (such as old technologies and equipment, lack of young specialists, low economic indicators) - you have to re-train people, sometimes simply explain in detail and clearly why all this is needed. However, if desired, the process can be established quite quickly and clearly. In some way, all services of the organization are engaged in collecting, processing and implementing new experience.
At the initial stage, in the organization concerned, each department collects information about its profile. Very often, the sources are open reports of Western and Russian companies, special industry press, and an integral part of modernity - the Internet. Information is accumulated (collected) during trips and business trips to Russian and Western companies. Entrepreneurs quite actively attend specialized exhibitions: almost every month, trained enterprise employees travel to collect information. All collected information is accumulated and analyzed in a single report, which is intended for the board of directors. Next, the organization’s indicators are considered in relation to the industry average, after which it becomes clear in which of them the organization comes out ahead or lags behind its competitors. After this, tactics for improving performance are developed. Now, for example, many large Russian factories are engaged in increasing labor productivity, the impetus for this was the experience of the Volvo company, where a specialist from one domestic factory studied management, and later competitors also took advantage of his experience, so it can be useful to “look around.”
In the West, where benchmarking has long been popular, the following practice has been established: a company, actively adopting the experience of others, certainly shares its own. Most successful enterprises publish detailed reports on the results of their activities and host competitors. The Western principle of successful work “if you are open, then you are developing” simply does not work in Russia and will not work for a number of objective reasons (such as: an increase in the number of inspections by competent authorities, attracting the attention of tax and other services, and many others).
Economic Sciences/2.Marketing and management
Student Boychenko Mikhail Alexandrovich
National Technical University of Ukraine "Kiev Polytechnic Institute"
Department of Industrial Marketing
Benchmarkingas a tool for developing competitive advantages
Benchmarking is the new buzzword in management circles. IN Ukraine This concept is still viewed with caution, fearing that the concept of benchmarking is used as a cover for industrial intelligence. However, benchmarking was not invented yesterday or today.
Benchmarking as we know it today was developed in the United States in the seventies, but its basic concepts were known much earlier. Research into scientific methods of labor organization was carried out by Frederick Taylor at the end of the nineteenth century. They can also be considered the foundations of the concept of benchmarking.
The term “benchmarking” itself comes from English word benchmark (“reference point”, “notch”). In the most general sense, a benchmark is something that has a certain quantity, quality and ability to be used as a standard when compared with other objects. Benchmarking is a systematic activity aimed at finding, evaluating and learning best examples business.
The most recent changes in management philosophy indicate an increased emphasis on competition. Changes in management philosophy over time reflect the changing competitive environment. In the 50s, when demand was greater than supply, management's tasks included only establishing final criteria and monitoring the process of achieving them. However, already in the nineties, supply significantly exceeded demand and management began to think about how to get ahead of the competitor’s performance in production and marketing “processes.”
Benchmarking may seem similar to competitive analysis, although in reality it is more detailed, formalized and streamlined.thancompetitive analysis approach (Table 1).The essence of todaythinterpretationAndbenchmarking is a continuous systematic search and implementation of best practices that will lead the organization to a more advanced form.
TablesA 1. ComparisonPOincomeOto benchmarkAndngAAndcompetitive anal AndhA
|
Process characteristics sa |
AnalAndz competitorOV |
BenchmarkAndng |
|
Common goal |
Analysis of strategy and competition |
Analysis of why and how competitors or leading companies do it |
|
Subject of study |
Strategy and competitor |
Business methods have been developed that satisfy the needs of customers |
|
Object of study |
Products and markets |
Methodology, process s veden and I b and znes a |
|
Main restrictions |
Activities on the market |
Neo bordered |
|
The importance of acceptance solutions |
Certain |
Very big |
|
Main sources of information |
Industry experts and anal and tics |
Enterprises - leaders in the industry, outside the industry, competitors, in internal divisions |
The purpose of benchmarking is to find businesses that are doing better than you. But this is not enough: after finding a better way to manage and do things, you will still have to find the answer to the question “how to do it better?” on your own.
This method was first developed in 1972 to assess business performance by the Institute for Strategic Planning in Cambridge (USA). For the first time, Rank Xerox began to purposefully use benchmarking at the time of the severe crisis in 1979 to analyze the costs and quality of its own products in comparison with Japanese ones. Currently, benchmarking is considered the most effective area of consulting.
The application of benchmarking consists of four sequential actions:
1. Understanding the details of your own business processes.
2. Analysis of business processes of other companies.
3. Compare the results of your processes with the results of the analyzed companies.
4. Implement necessary changes to close the gap.
About here and allocate several types of benchmarking activities:
· internal – comparison of the work of company divisions;
· competitive – comparison of your enterprise with competitors according to various parameters;
· general - comparison of the company with indirect competitors according to selected parameters;
· functional – comparison by function (sales, purchasing, etc.).
· joint – carried out in cooperation between groups of companies
They differ in the complexity of the tasks that are set (simple and complex), in the focus (internal and external), in the level at which benchmarking is supposed to be carried out (strategic and operational) . How a company uses benchmarking depends on its goals, its stage of development and the state of the industry, that is, its main competitors.
Benchmarking cannot be a one-time analysis. To get the most out of this process, you need to make it an integral part of your business' innovation and improvement process.
In recent years, organizations such as government agencies and universities have also begun to discover the benefits of benchmarking and are applying its core principles to improve their processes and systems.
In Europe, the use and popularity of benchmarking is still quite moderate. Significant differences in the understanding of business processes in different countries significantly slow down its implementation in business processes of various sectors of the economy.
In fact, benchmarking is an alternative method of strategic planning in which tasks are determined not based on what has been achieved, but on the basis of an analysis of competitors' performance. Benchmarking technology brings together strategy development, industry analysis and competitor analysis into a single system. To understand benchmarking methods, it is necessary to determine its relationship with strategic planning.
To select areas of activity, allocate resources and look for connections between areas of its activities, a company must understand the strategic features of its industry. That's why industry analysis is the first step in developing a strategy. It includes examination of the extent and nature of competition, customer behavior patterns and purchasing power, supplier behavior patterns, industry entry barriers, threats of product and service substitutes, and other features. Industry analysis provides material for calculating industry average profit potential and helps identify the reasons why some companies outperform others.
When starting an industry analysis, it is necessary to answer questions about how profitable the industry is now and what its prospects are in the near future, what are the key success factors. The market is segmented into the most profitable sectors, then success factors are identified (this could be a sales system, low price, etc.). It then determines how the key ones differ from each other in their impact on profitability.
The next stage is competition analysis. First of all, you should analyze how much attention the competitor pays to your business areas, that is, how much resources he will spend on the development of these areas. Here you need to understand the overall financial strength of your competitor and the relationship between his priorities in the area of your competition with him.
Once you have figured out the most profitable market segments and assessed your competitive advantages, you need to choose an object to “imitate”. To achieve the most effective result in benchmarking, experts recommend not only finding such enterprises and accumulating information about their activities and progressive management decisions, but also establishing contacts with them. After the information is collected and classified, the degree of achievement of the goal and the factors determining the result are assessed. Well, then a plan is developed. Its goal is obvious: to ensure that the processes being changed achieve the highest efficiency.
Having decided on industry and competitor analysis,we can startto strategy development. Actually necessary answer the question of how a company can outperform competitors using key success factors in the context of various functional areas: expansion of production, introduction of new products and services, changes in pricing, sales and delivery, marketing, personnel, technology, etc.
Thus, most businesses use "benchmarking" as one of the means by which they remain competitive. But there are a large number of “traps” that organizations fall into when they first use the concept of benchmarking to improve their competitiveness.
The main mistakes that are often encountered in the practice of organizations when using the benchmarking approach are:
1. Perception of benchmarking as an “inspection check” of the functioning of an enterprise.
2. Assumption that existing and approved “baselines” can be used without modification.
3. Decreased focus on service and customer satisfaction.
4. Set yourself tasks that have too vague boundaries and formulations.
5. Inconsistency.
6. The process is too large and complex to be manageable.
7. Insufficiently complete research of the benchmarking partneru.
8. Lack of grounds for benchmarking.
The main advantages of benchmarking:
· Increased work efficiency.
· Reducing costs for in-house developments (strategies and processes) by copying and modifying others.
· In partner benchmarking, the establishment of trusting relationships between partner companies.
· Continuous improvement of the company's activities by systematically comparing elements of activity with similar elements of more successful activities at the macro and micro levels.
Thus, benchmarking can be considered as one of the most importantareas of strategically oriented marketing research.The benefit of benchmarking is that production and marketing s e features become most manageable when explored and enhancedat your enterprise the best methods and technologies of others, not your ownenterprises or industries. This can lead to profitableentrepreneurship with high efficiency, creation of usefulcompetition and meeting customer needs.
Literature:
1. Balabanov I. T. Innovative management. Forecasting. Reengineering. Benchmarking. Publisher: Peter, 2001
2. Voevodina N. A. R. Raider. Benchmarking as a tool for determining strategy and increasing profits. Publisher: RIA "Standards and Quality", 2006
3. Robert Camp. Legal industrial espionage. Benchmarking business processes: search technologies and implementation best methods the work of your competitors. Publisher: Balance-Club, 2004
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