STRATEGY ASSESSMENT USING BENCHMARKING 

Benchmarking methodology (identify the best, corporate with them and study them, learn from them, remember?) can be also applied to determine company strategies, similar to the analyzing processes and operations of best-in-class firms. 

Which are the best firms in a specific industry? Why? What kind of strategies makes them so successful? 

When strategy assessment using benchmarking might be needed? 

• Entry to a new industry 
• The involved industry is undergoing in a rapid change 
• We are forced to employ a change in our strategy 
• An overall involved industry assessment   

• Competition 

Sooner or later, we will be facing competition, threading our market share and decreasing the profitability, 

We should not wait for a competitor (Japanese ?) driving us out of market 

          It might even force us to leave the market; 

          Many examples exist, 

(Recall the ones exposed by Japanese firms; don’t you think that too much examples from only one country is a little bit enormous!)  

British Motorcycle Manufacturers – Lost whole US Market against Honda in 1960s-1970s 

• Other changes in current business environment 

       Legislation 

          Increasing public concerns about environment 

Steps to Strategy Assessment: 

• Analyze the Overall Industry 

Industry structure,  potential for profitability/opportunities, competition, likely evolutionary path, other environmental factors 

                    What is our strategic position?   

• Identify the Most Successful Firms 

          According to the financial results, current market share, growth rate 

• Analyze the Identified Successful Firms  

          Re-check financial results (profitability, ratio tests...)  

Identify their strategy, Business operating systems (value chain, human resources, marketing, production..)   

• Compare the most successful firms with each other and with yours 

          What is different? Why? So what? What is in it for me? 

Why it is important to understand the employed strategy?