i) Explanation of Benchmarking:

Benchmarking is the process of gathering data about targets and comparators that permit current levels of performance to be identified and evaluated against best practices. It involves comparing an organization’s processes, practices, and performance metrics to those of industry leaders or competitors to identify areas for improvement. The goal of benchmarking is to adopt the best practices identified through the comparison to enhance the organization’s overall performance.
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ii) Advantages of Benchmarking:

1. Position Audit: Benchmarking allows companies to assess their existing position by comparing it to industry standards or best practices. This helps identify gaps in performance and areas where improvements are needed.
2. Focus on Improvement: Benchmarking provides a clear focus on the improvement of key areas. By identifying best practices, companies can set challenging but achievable targets, driving continuous performance enhancement.
3. Encourages Innovation: The process of benchmarking often involves sharing information and learning from other organizations, which can be a spur to innovation. Companies can adopt new ideas and strategies that have been successful elsewhere.
4. Improved Performance: By adopting best practices identified through benchmarking, companies can improve their performance, particularly in cost control, quality, customer satisfaction, and operational efficiency. This can lead to a competitive advantage in the marketplace.