Benchmarking - Essay

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Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. It is recognised to play a major role in developing and monitoring the business strategy, and therefore achieving a competitive advantage in the industry. However Andrew Campbell has suggested there is a problem in benchmarking as it can be valuable but can also mislead and distract; therefore “it can prevent managers from focusing on what is unique to their situation”. As a result he suggests that the designed planning processes “fail to add value” and consequently companies should spend time on the “needs of their businesses and skills of their corporate managers”. The selected company which I will use to examine whether the statement made by Andrew Campbell is still valid will be Honda. I will first start of by defining the strategy which they implement. Then I will move on to discussing their Management Control Systems (MCS) and how they are aligned to the strategy, as well as how they help Honda achieve their strategic goals. After this I will consider the major risks which face the company and how they can use the Levers of Control Framework (LOCF) to assess it strategic risks and uncertainties. Successful companies are those that focus their efforts strategically which can be seen within Honda Motor Company Ltd. A strategy is the determination of the basic long term goals and objectives of the enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. Honda is a multinational automobile manufacturing corporation which was founded in 1948 by Soichiro Honda, a Japanese engineer and industrialist. He crafted Honda’s philosophy which shapes their present corporate activities. Their corporate strategy consists of a wide portfolio which includes operating in three different markets; the Automobiles business, Motorcycles business and Power business. Consequently, it is principally engaged in manufacturing and selling motorcycles, scooter, automobiles and power products. Honda also produces home improvement and gardening products, besides providing financial services for the sale of its products. They are devoted in one basic rule: “building products close to the customer”, which has guided them to become the world's largest motorcycle manufacturer and one of the leading automobile makers. In addition to this, Honda’s continuing success and growth is based upon its underlying business strategy. This states that they maintain a global viewpoint, by dedicating to supply products of the highest quality at a reasonable price for worldwide customer satisfaction. Its policy to grow the business mainly through R&D is sharpening the business advantage of Honda. The research and development system in place benefits customers by promising leading-edge technology and commitment to innovation. In addition, Honda nourishes collaborations with third parties as a critical part of its business strategy. The company also focuses on attracting, retaining, and motivating its employees to drive its operational excellence and scope of business operations. Together with the intense rivalry against top car manufacturers such as Toyota has created a work ethic which is unseen in the industry. Ultimately, the Company has conducted its activities with a commitment to protecting the environment and enhancing safety in a mobile society. Their philosophy consists of a collection of principles which are shared by all subsidiaries, affiliate companies and their employees. Furthermore, it operates under the fundamental values of “Respect for the Individual”, “The Three Joys” and the management policies. “Respect for the Individual” revolves around three primary morals which are Initiative, Equality and Trust. This helps sustain their perceptions to respect the unique character and ability of each individual person, trusting each other as...
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