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CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge

Sundaram Auto Components compares its order-to-delivery cycle time with that of a leading firm from a completely different industry that is known for exceptionally fast logistics, in order to borrow ideas. Which type of benchmarking is this?

This is functional or generic benchmarking, because the firm compares a specific process, delivery cycle time, with a best-in-class performer from an unrelated industry. Competitive benchmarking uses direct rivals, and internal benchmarking uses the firm's own units, so neither fits the described comparison.

  1. AInternal benchmarking
  2. BCompetitive benchmarking
  3. CFunctional (generic) benchmarkingCorrect
  4. DStrategic benchmarking of the firm's mission only

Explanation

Functional or generic benchmarking compares a specific process with the best performer in that function, even from another industry. Competitive benchmarking would limit the comparison to direct rivals, which is not the case here. Internal benchmarking compares units within the same organisation.

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