Benchmarking involves:
1. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.
2. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with.
3. studying whether a company's resource strengths are more or less powerful than the resource strengths of rival companies.
4. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities.
5. comparing the best practices in one industry against the best practices in another industry.