Benchmarking is the study of analyzing best business practices used in a particular sector, comparing a business to existing competitors, and looking for the best deals available, which the firm may apply to its procedures. Benchmarking is a comparison examination when a company has to alter its course while discovering new wants of its target market. The fundamental goal of benchmarking is to elevate the organization and increase its level of competition. In terms of this essay, a Walmart department will be researched.
To begin with, it is necessary to study this Walmart’s seasonal average sales, average inventory, and turnover. Seasonal average sales stand for the average net sales of the product within a season, average inventory for the estimation of the worth or quantity of a specific product in defined periods, and turnover for how fast the business sells its inventory (Lin, 2019). As for average sales, they were 2% above last season. However, since the information in the paint department’s previous season’s total dollar sales indicates that total paint department sales were 4% lower than the previous season, action has to be taken in this department. To set a performance benchmark for the coming season, it is essential to develop an achievable goal, for example, to try to make the average sales reach at least 5% above the previous season by making special offers for clients or by setting some discount programs. It is needed to overcome the potential risk of total risk being lower than the previous season.
Overall, there could have been an internal factor contributing to the paint department’s poor performance last season—for example, the pricing of the paint, which did not attract many customers. Therefore, to solve it, it is needed to run a better analysis to compare business practices such as lower pricing or putting the product closer to the cash registers so more customers will notice it. In addition, internal benchmarking has advantages and disadvantages compared to external benchmarking. One of the main advantages is that internal benchmarking provides a company with quick access to its documents, data, and information. However, its actions are limited only to the company without being able to make more global changes to get better results in contrast to external benchmarking.
Reference
Lin, R. (2019). The importance of successful inventory management to enterprises: a case study of Walmart. International Conference on Management, Finance and Social Sciences Research (MFSSR). London: Francis Academic Press.