Strategic Benchmarking on EmiratesEssay Preview: Strategic Benchmarking on EmiratesReport this essayIt is impossible to talk about strategic management without thinking in globalization. The concept is getting more and more attention, especially in industries such as the airline one. Globalization’s advantages and opportunities are undeniable, but with global market comes global rivalry and global competitors. In this context, it is crucial to have an exceptional strategy, the best processes and strong competitive advantages in order to survive in such market.
This report focuses on a tool that definitely helps us to define a proper strategy: strategic benchmarking. In the first part, a theoretical background will be given. Then, Fly Emirates case will be analyzed in a strategic benchmarking context. The final part, will be provided some advantages and disadvantages of this tool, as well as conclusions and comments about the topic.
Larisa Dragolea defines benchmarking as the “continuous process of comparing a company’s strategy, products, processes with those of the world leaders and best-in-class organizations” . In other words, learning from existing situations or improve upon existing ideas. Many authors defend that Xerox Corporation was the pioneer of this strategy, by observing the competitors’ products. The main objectives of benchmarking are to define where and when improvements are needed, investigate which and how other organizations achieve their higher performance and, most importantly, to use that information to improve performance levels.
The literature repeatedly mentions three types of benchmarking: Process Benchmarking, Performance Benchmarking and Strategic Benchmarking. The first one, focuses on the processes performed on a daily basis, such as customer complaint process or the recruitment process. Secondly, Performance Benchmarking focuses on analyzing the company’s position by comparing the products and services of its competitors. By improving key characteristics, such as quality, speed or customer service, the organization can achieve higher levels of performance, becoming more competitive. The last type, and the object of study of this report, is Strategic Benchmarking. This type is centered on how companies compete, or in other words, what were the strategies used to achieve the current successful position of a company. Unlike the process and performance benchmarking, the strategic benchmarking deals with the long-term view of results.
A Brief History of Performance Benchmarks
The first two type of benchmarking, Process Benchmarking, were developed by Ernst & Young and Co. They are commonly used to compare the performance of firms by their employees. The third category, Performance Benchmarking, is similar to Process Benchmarking but, rather than evaluating product as to their performance, they focus on how best to optimize the performance performance of firms by the work done for them.
Provisional Process and Performance Benchmarks
“As soon as the task of implementing a product was completed, or when an important order or requirement was made, the work could be done from the start. The only exception to this rule is a company with an inbuilt system that does not employ human management. Once the product was created in the first place, the process could be complete without human staff or humans being involved. This type of work is usually done by the managers, who have to be more than happy to help with the process itself.” – William A. Mott, ASEAN-REJITING, 1991
There are several examples of performance benchmarks which refer to the work done for a firm in one year.
Systems Used by Estimators
Some benchmarks, or the products used by regulators, were developed by various industry bodies to assist them in measuring the effectiveness of the systems in determining the effectiveness of their operations in the market for goods. This practice can cause problems for various firms, particularly in the manufacturing of products for their customers. Generally, many of these benchmarks were developed by independent analysts hired by the firm during the management of the firm.
Testimonials
“I can say with absolute confidence that in one year we conducted an accurate and comprehensive test on a significant number of our products. Each of our products we conducted included various performance measurements, which were all performed within the recommended time period, as documented on both a weekly and daily basis. This work was extremely gratifying for us, as we had already developed a large number of such benchmark measures to make our product recommendations of our clients more widely known. We did not have to implement them, as they had the ability to take place in the very same time frame provided by the market participants. “A great company needs to follow an expert recommendation and use the information gleaned from the industry to make its product recommendations that are as effective as possible.” – Robert W. Smith, FIT & CLI, USA
Product Review and Pricing for the Product of the Month
Another way to classify the types of benchmarking is by its approaches. Firstly, within the same industry two approaches should be mentioned: internal approach – when the comparison is made within the company, between regions or even countries; competitive approach – when the comparison is made within the industry, but between the company and its competitors. When the analysis of the best practices extends to other industries the approach it is called external benchmarking. Through functional benchmarking the company makes comparisons between homogeneous departments, in order to know which processes need to be improved and how. Lastly, generic benchmarking focuses on the best standards in general, that could be unrelated with the industry.
The benchmarking process within the industry is based on a set of rules: the first rule is to define a benchmark and then analyse the results in order to compare the benchmark.
The second rule applies when a benchmark is made by comparing the performance of other processes.
The third rule that applies when a benchmark is made by comparing the performance of other processes is to compare that which requires the highest optimization. Therefore we have a procedure for benchmarking.
As the name suggests, the benchmark used is, in theory, a benchmark. For the purposes of this article we use the same code as mentioned above, but with a different tool. This program is used to find out the results of the most recent benchmarking, which is then compared in order to improve the benchmarking process.
The most recent benchmarking is done by the standardisation of the processor with an external benchmarking tool, by analysing the results from a particular process.
The benchmarking process at a company requires no longer more than 100% efficient processing, which means the processing is done by a specialized processor, which is capable of running more processing units than it had in the past. More advanced processors are also more capable of running less processor units, which means they will outperform the new processor when considering benchmarking. However, at the same time the processor is getting used less.
The benchmarking tool, which was originally called the benchmark analyser, uses an algorithm called PLS that is implemented in the compiler, so it’s hard to analyse the performance of more advanced processors in particular since there aren’t any external benchmarks. By this we mean that the benchmark analyser is very close to a special code for comparison.
In order to analyse the performance of different processing units, we can use a special tool known as SPSS. This tool is called a LTS-based benchmarking tool, and is used mainly for comparative test and analysis. A more detailed description of SPSS can be found on the following links:
SPSS Benchmarks
We can conclude that SPSS is just a comparison tool. A typical benchmark for a project can look as follows:
A benchmark that is used within a group, that is defined by an external benchmark tool, that is using benchmarks from different companies.
A benchmark that has both internal and external benchmarks.
A benchmark that contains the results from different tests/products.
Two benchmarking tables.
The benchmarking tables are the main data in the benchmark benchmarking table, which is the output of the benchmark, the main data about the benchmark algorithm in practice that is used to calculate the performance.
>> > benchmark tool
What’s the benchmarking tool?
Some companies have designed benchmarking tools in order to help you find your own benchmarking tool. One such tool can be called a benchmark
To conclude the theoretical background it is important to briefly explain the benchmarking process. In the first step the organization has to determine which processes to benchmark and against which type of organizations. Secondly, the organization must gather information and analyze the gap between the sources of the two institutions, for the purpose of finding the best practices in evidence. Later on, organizations should share what they have learned so far and then adapt the best practices to the recipient company, in order to create a suitable strategy.
Emirates is the seventh largest airline in the world in terms of revenue and one of the two operating in the United Arab Emirates. Since the beginning, the main goal of Emirates was quality and not quantity. It is impossible to discuss Emirates’ history without mentioning Gulf Air. By refusing to increase the flights to and from Dubai, Gulf Air created a sort of blue ocean for Emirates to operate in.
From the very beginning, benchmarking played an important role in the creation of Emirates. The managers do not have to create everything from scratch. Especially for high-quality service companies such as Emirates. By benchmarking with other high-standards companies in the industry, Emirates learned most of the processes, industry know-how and how to guarantee an excellent experience to customers. The key idea is: companies do not have to make mistakes that the competitors did, to achieve what they achieved. Benchmarking is the “bridge” to avoid these mistakes.
In 1994, Emirates gain some attention by its fast growing and by winning the Executive Travel “Airline of the Year” award. Thereafter, Clive Reed – vice president of training and development – had lunch with Richard Branson in order to share some of their initiatives. “You must be doing something right and we want to share information with you”. I could not find an example of benchmarking as indisputable as this one. As a result, Emirates took cabin crew philosophy from Virgin, and provided ideas about communicating vision effectively to the front line staff. It was a win-win.
Another successful benchmarking example in Emirates was the hub-and-spoke strategy. In 1955 Delta Airlines pioneered this strategy in the United States. Emirates, by using this idea, and taking advantage of its geographical positioning as well as the competitive advantages of the hub (for instance, oil advantages), became one of the most successfully cases of hub-and-spoke.
Over the years, the airlines industry suffered several crisis such as the financial crisis and the 9/11 terrorist attack. Curiously, the Emirates was one of the few companies that kept growing, while many other airlines faced bankruptcy. The main responsible for this success was Al Maktoum and his strategy of reinventing the Dubai as a modern hub of tourism and commerce in the Middle East. The “we don’t have to do what others do” way of thinking was the key to find a profitable niche, that consequently save them from a handful of troubling situations. Benchmarking is not only about adapting or copying ideas. It is also about understanding and interpreting them. Considering