Step 1: Pick an industry that you find interesting. This may be driven by a company by which you would like to be employed or by some other factor. Within the industry, identify three companies that compete with one another. In order to ensure comparability, go to https://money.msn.com, find and enter the company stock symbol, and then go to Fundamentals, Company Report. The industry is in the first column, under Company Information. Find three companies that are in the same industry.
Step 2: Collect data related to each company. At a minimum, find the income per employee, revenue per employee, receivable turnover, inventory turnover, and asset turnover for each company. This data is available under Fundamentals, Key Ratios, and Mgmt Efficiency on the website. You might also find it useful to review the Company Report for each firm. Here read the description of each company to better understand how they do business.
Step 3: Compare the companies based on what you have found. Which company appears to have the most productive employees? Which company has the best operations and supply chain processes? Which company is most efficient in its use of credit? Which company makes the best use of its facility and equipment assets?
Step 4: What insights can you draw from your analysis? Benchmarking is a process where one company studies the processes of another company (or industry) to identify best practices. What could your companies learn from benchmarking each other?