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ACCA Strategic Professional · Advanced Performance Management · Performance improvement models and techniques

Maribel Logistics wants to improve its warehouse order-picking process. Its board decides to study the picking process of an online fashion retailer renowned for speed, even though the retailer is not a logistics firm. What is the main advantage of this approach compared with competitive benchmarking?

The main advantage is that studying a best-in-class firm in another industry is more likely to reveal innovative practices beyond the industry norm. Competitors tend to share similar methods, so competitive benchmarking rarely produces breakthroughs, and practices still need adapting to Maribel's context.

  1. AData is easier to obtain because the partner is not a rival
  2. BIt is more likely to reveal innovative practices beyond the current industry normCorrect
  3. CIt removes the need to adapt practices to Maribel's own context
  4. DIt guarantees that cost savings will match the partner's results

Explanation

Looking at a best-in-class firm in another industry (functional benchmarking) can uncover breakthrough practices that competitors have not adopted. Data may be easier to get, but this is not the main advantage. Adaptation is still needed, and results are never guaranteed.

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