Skip to content

CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment

Lakshya Motors' managers compare the firm's cost per vehicle and quality metrics with those of the best performer in the industry, and with leading firms in other industries, to find improvement areas. Which technique are they using?

They are using benchmarking, which means comparing the firm's own performance, costs and processes against the best performers, inside or outside the industry, to identify gaps and adopt better practices. SWOT and experience curve analysis do not involve this comparison.

  1. ABenchmarkingCorrect
  2. BSWOT analysis
  3. CValue chain analysis only for primary activities
  4. DExperience curve analysis

Explanation

Benchmarking compares an organisation's processes, costs and performance with best-in-class firms, within or outside the industry, to learn and improve. The experience curve concerns cost reduction with cumulative volume, not comparison with others.

Did you get it right without looking?

One question tells you little. A timed set on Strategic Analysis: Internal Environment shows your real accuracy, how long you take and where you lose marks.

Practise Strategic Analysis: Internal EnvironmentFree diagnostic mock

More Strategic Analysis: Internal Environment questions