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ACCA Strategic Professional · Strategic Business Leader · Enabling success: performance excellence

Marlow Foods runs five bakeries. The head office finds that Bakery 3 has waste of 2% against 6% elsewhere and asks Bakery 3 to document its methods so the other four can adopt them. What is the main advantage of this internal benchmarking approach compared with external benchmarking?

The main advantage is that data is easier to obtain and compare, since the units share systems, ownership and no confidentiality barriers. The weakness is that internal benchmarking is inward looking and may miss better external practices, so it cannot guarantee industry leadership or avoid the need for staff acceptance.

  1. AIt reveals radically different practices from other industries
  2. BData is usually easier to obtain and comparable because of common systems and no confidentiality barriersCorrect
  3. CIt guarantees the company will become the industry leader
  4. DIt removes the need for staff buy-in because practices are already familiar

Explanation

Internal benchmarking benefits from access to data and similar processes within the same group. Its weakness is that it is inward looking and may not reveal industry-leading or radically different practices, so option A is a limit of internal, not an advantage. It does not guarantee leadership or remove the need for buy-in.

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