A Quantitative Method Of Benchmarking Based On Competitive Strategy Perspective

Benchmarking has developed as one of the three classic western managingmethods since Xerox first proposed it in1979. More broadly conceived, the modelof ‘Learning-Imitating-Innovating’ of benchmarking can not only help enterprise toimprove continuously and shape core competitive advantage, but also provide with areference standard for developing competitive strategy in the future. In narrow terms,benchmarking can find those potential competitors and best practices.Therefore,benchmarking has been widely used in the modern enterprise.Most of the existing researches of benchmarking are based on micro indexes tochoose the best practice, which is short of strategic considerations. Moreover,benchmarking should be a continuous and systematic evaluation process, theexisting multi-step benchmarking are also lack of certain ability to predict the future.The paper uses planning, searching, collecting, analyzing and improving as theprocess of benchmarking, and analyzing is the focus of this study. The single-stageand two-stage benchmarking selection method of enterprise based on Portercompetitive strategy haves been proposed later. In the analysis phase, this paper usesself-organizing map to identify potential benchmarks based on the similarity of inputuse. The super DEA efficiencies and two-stage DEA efficiency are used to identifythe industry leaders. Different from other researches, the appropriate target is finallydetermined based not only on the DEA efficiency scores but also on the choicepreference of Porter competitive strategies. Efficiency improvement is the ultimategoal of benchmarking, this paper uses DEA slack variables to adjust input and outputvariables to make the non-effective decision making unit to reach the frontier.This paper makes use of2009-2011Annual Report data of4state-owned banks,12joint-stock commercial banks, and32city commercial banks to develop anempirical study. The single-stage and two-stage optimal benchmark based ondecentralization strategy, differentiation strategy and cost leadership strategy havabeen selected for58banks. Finally, This paper analyzes the difference betweensingle-stage and two-stage optimal benchmark under different index system.