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

Which one of the following is the most accurate description of strategic benchmarking, as distinct from process or functional benchmarking?

Strategic benchmarking compares the firm's long-term strategic choices and overall performance outcomes with those of successful firms, in order to improve its competitive position. It differs from process or functional benchmarking, which compares specific activities, and from year-on-year self comparison.

  1. AComparing the cost of individual activities such as invoicing with similar activities in any other industry
  2. BComparing long-term strategic choices and performance outcomes of the firm with those of successful firms to improve its overall competitive positionCorrect
  3. CComparing a firm's current-year financial results with its own previous year's results
  4. DComparing statutory compliance records with those of regulators

Explanation

Strategic benchmarking looks at the long-term strategies and overall outcomes of high-performing organisations, in order to refine one's own strategic direction. Comparing a specific activity across industries is functional or process benchmarking. Comparing against one's own past results is internal trend analysis, not benchmarking against others.

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