assessing the role of benchmarking on the …
TRANSCRIPT
ASSESSING THE ROLE OF BENCHMARKING ON THE PERFORMANCE OF
SUPERMARKETS A CASE OF SUPERMARKETS IN KISII COUNTY
CATHERINE BOGETA OBWOGE
A Research Report Submitted to the School of Undergraduate Studies in Partial Fulfillment of the Requirement for the Award of a Diploma in purchasing and Supplies Management of School of Business and Economics,
Kisii University
NOVEMBER , 2017
DECLARATION AND RECOMMENDATION
DECLARATION
This Research Project Report is my original work and has not been submitted to this university or any other university for the award of diploma or degree.
....................................... ………………………
Signature Date
Catherine Bogeta Obwoge REG NO CB05/10040/16
RECOMMENDATION
This Research Project Report has been submitted for examination with our approval as University Supervisors.
……………………. ………………………….
Signature Date Mr Joseph Kamotho Lecturer School of Business and EconomicsKisii University.
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DEDICATIONThis Research Project report is dedicated to my mother Agnes Kerubo , husband Yabesh
Omwenga and children Willvie Nyamweya , Wallace Nyamweya and Weiner Nyamweya
respectively for their moral and financial support and encouragement throughout the study.
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AKNOWLEDGEMENT
My sincere acknowledgement goes to the Almighty God for the gift of life and good health, I am
also thankful to my supervisor Mr. Joseph Kamotho for his invaluable guidance throughout the
Project report development as well as the efforts of all lecturers who taught me more so to my
Research Methods lecturer Mr. Nicholas Ndege.
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ABSTRACT
The purpose of this study was to assess the role of benchmarking on the performance ofsupply chain management. The study was guided by the following specific objectives; to identifythe internal benchmarking applied by supermarkets, to establish the role of competitivebenchmarking in enhancing the organizational performance and to establish the Genericbenchmarking encountered by supermarkets in the supermarkets in Kisii County . The studyadopted a case study design which helped in obtaining the role of benchmarking in the supplychain management in supermarket. The target population of the study was 200 employees fromthe selected supermarkets with a sample size scaled down to 20 employees due to timeconstraints using stratified random sampling. The study used primary data which was obtainedby the use of the questionnaire with open and closed ended questions administered by theresearcher. Data was analyzed by use of descriptive statistics methods such as weighted average,mean and percentages. Thereafter data was then presented in form of tables and pie charts. Thestudy established that benchmarking practices has been applied in the supermarkets in KisiiCounty. The study revealed that in relation to process benchmarking companies have focused onachieving improvements in key processes to obtain quick benefits. The research also summarizesthat in order to improve on functional benchmarking supermarkets compare the businessfunctions with others which have lead to incremental innovation. The research noted that lesstime and resources are needed for internal benchmarking. The findings were clear that companiesbenchmark with partners drawn from the same sector. Based on the research findings, the studyconcludes that process benchmarking leads to improve the performance of supermarkets in KisiiCounty. Basing on the finding and conclusions the study recommends that operation managers ofsupermarkets should focus highly on accomplishing enhancement in key processes to attain fastresults. The operation managers also have to improve on specific critical processes relative. Thestudy also recommends that operation managers of supermarkets in Kisii County to compare thebusiness functions with others which have lead to incremental innovation. The study furtherrecommends that operation managers of the supermarkets in Kisii should increase the level ofinternal benchmarking in their industries since internal benchmarking requires less time andresources. In order to suppress stiff competition in the industry the study recommends tooperation managers to take into account competitive benchmarking, in relation to this theoperation managers of the supermarkets should benchmark their products with partners drawnfrom the same sector. The study finally recommends that operation managers of the supermarketshave to improve on overall performance of their supermarkets by focusing on general approachesthat have facilitated high-performance to thrive.
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Table of ContentsDECLARATION AND RECOMMENDATION.....................................................................................................ii
DEDICATION................................................................................................................................................ iii
AKNOWLEDGEMENT................................................................................................................................... iv
ABSTRACT....................................................................................................................................................v
LIST OF TABLES..........................................................................................................................................viii
LIST OF FIGURES.......................................................................................................................................... ix
CHAPTER ONE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................................1
1.1 Background of the Study.......................................................................................................................1
1.2 Statement Problem................................................................................................................................6
1.3 Research Objectives...............................................................................................................................7
1.4 Research Questions...............................................................................................................................8
1.5 Significance of the Study.......................................................................................................................8
1.6 Scope and Justification of the study.....................................................................................................9
1.7 Limitation of the study...........................................................................................................................9
1.8 Assumptions of the study......................................................................................................................9
1.9 Definition of Terms..............................................................................................................................10
CHAPTER TWO...........................................................................................................................................11
LTERATURE REVIEW...................................................................................................................................11
2.0 Introduction.........................................................................................................................................11
2.1 Theoretical Review..............................................................................................................................11
2.2 Theoretical Framework........................................................................................................................11
2.2.2 Resource Dependence Theory......................................................................................................11
2.2.3 Information Theory.......................................................................................................................12
2.3 Empirical Literature.............................................................................................................................12
2.3.1 Internal Benchmarking applied by supermarkets........................................................................12
2.3.2 Role of competitive benchmarking in enhancing the organization performance.......................15
2.3.3 Generic benchmarking encountered by supermarkets..............................................................17
2.4 Empirical Studies.................................................................................................................................19
2.5 Summary of the Literature...................................................................................................................19
2.6 Conceptual Framework.......................................................................................................................21
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CHAPTER THREE........................................................................................................................................22
RESEARCH METHODOLOGY.......................................................................................................................22
3.1 Research Design...................................................................................................................................22
3.2 Study Area...........................................................................................................................................22
3.3 Study Population.................................................................................................................................22
3.4 Sampling Technique.............................................................................................................................22
3.5 Sample Size..........................................................................................................................................23
3.6 Data Collection Methods & Procedure................................................................................................23
3.7 Instrumentation...................................................................................................................................23
3.7.1 Reliability of Instruments..............................................................................................................23
3.7.2 Validity of Instruments..................................................................................................................24
3.8 Data Analysis Methods........................................................................................................................24
CHAPTER FOUR..........................................................................................................................................25
DATA ANALYSIS AND DISCUSSION..........................................................................................................25
4.1 Introduction........................................................................................................................................25
4.2 Demographic Information o the Respondents.....................................................................................25
4.3 Internal Benchmarking applied by supermarkets................................................................................27
4.4 Competitive benchmarking.................................................................................................................28
4.5 Generic Benchmarking........................................................................................................................29
CHAPTER FIVE............................................................................................................................................30
SUMMARY OF FINDINGS CONCLUSION AND RECOMMENDATIONS.........................................................30
5.1 Introduction.........................................................................................................................................30
5.2 Summary of the Research Findings......................................................................................................30
5.3 Conclusion...........................................................................................................................................31
5.4 Recommendations...............................................................................................................................32
5.5 Suggestions for further Studies............................................................................................................33
REFERENCES..............................................................................................................................................34
APPENDICES...............................................................................................................................................37
Appendix i: Questionnaire.....................................................................................................................37
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LIST OF TABLES
Table 4.1 Working experience ……………………………………………………. 25
Table 4.2 Number of branches the supermarket has……………………………… 26
Table 4.3 Number of employees in the supermarket ……………………………… 26
Table 4.4 Internal Benchmarking ………………………………………………….. 27
Table 4.5 Competitive Benchmarking……………………………………………... 28
Table 4.6 Competitive Benchmarking …………………………………………….. 29
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LIST OF FIGURESFIG 2.1 CONCEPTUAL FRAME WORK …………………………………………… 21
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CHAPTER ONE
INTRODUCTION
1.1 Background of the StudyAccording to Skandalakis & Nelder,(2001), more efficient ways of performing activities and
company operational processes, supermarkets are giving more attention to benchmarking.
Benchmarking entails comparing key activities with world class greatest practices. It endeavors
to classify an activity, such as client order processing, that requires to be enhanced and finding a
non -rival organization that is considered to correspond to world class best performance for the
activity and learning on how it executes the activity (Drury,2009).
A process, no matter how well controlled, is capable of enhancement. In reality, the emphasis has
shifted remarkably towards creating enhancement on the key duties of operations supervisors of
supermarkets. For any operations supervisor to chart their approach to the upgrading of their
operations, they have to identify the level they are currently in. The complexity of competition
has changed towards a more collaborative approach while taking care to improve competencies
and capabilities. This results from the realization that other firms facing the same turbulence in
the business environment are doing things better. A study by Voss, (2012)argues that an indirect
link between benchmarking and performance as it increased understanding on firm’s position
relative to its competition. Benchmarking participation promotes a way of life which stresses on
quality and assessing one’s own performance as well as cultivating a culture of accountability
for it. This in turn improves on customer relations and promotes self-criticism. Continuous
improvement may simply be defined as a process of finding ways to advance some elements of a
business such as price, excellence, delivery, and client service persistently. Rich,(2012) argues
that, all through the preceding two decades , benchmarking has confirmed to be an efficient
quality enhancement tool.
Every part of an operation consequently requires some sort of performance standard as a
prerequisite of improvement. Plainly, performance customarily would consequently comprise
simply of evaluating the performance realized from the operations of a department and checking
whether it is superior or worse than that of its rivals (Norman, 2001).Leaders are confronted
more than ever by concerns of excellence, cost, competitiveness, swift change, outdated culture,
and innovative know-how and in a number of instances a desire to re-invent the organization.
Benchmarking is important and has the greatest practices in the business for attaining
continuous improvement in business operations. The changes in the competitive environment are
so fast and it calls for a closer watch on the environment and the ability to adapt quickly to any
stuff in the operating system. Benchmarking recognizes that ideas are available everywhere, the
challenge is seeking them and applying them. Superior performance which in Japanese implies
aiming to be the greatest of the greatest tries to capture the significance of benchmarking
(Vermulen, 2003).
Corporations adopt benchmarking activity to get better on their performance level and also as an
organizational plan for knowledge and correction. A firm that does benchmarking is able to
compare it’s operational and management practices and performance to those of its rival firms, or
to those firms which are deemed to the finest in that industry. Information obtained from other
organizations is therefore valuable in mounting the benchmarking industry’s operational and
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management practices (Saxena, 2011). Benchmarking is defined by the Water Environment
Research Foundation (2004) as a systematic search process for the most excellent practices,
novel ideas, and the most successful operating procedures that can steer to greater performance
and then adopting them to improve the performance level of one’s own firm. It is therefore a
continuous process which offers a practical tool for enabling an industry to evaluate its
performance level, to an ordinary firm or other firms. Benchmarking can therefore be described
as a development method of improvement on performance by continually categorizing, adapting
as well as understanding exceptional practices and procedures found within or external to the
firm (Jackson & Lund, 2000).
Supermarkets inventiveness for continuing expansion is very significant, benchmarking should
be used for evaluating supermarkets innovativeness in terms of the requisite activities for
companies to innovate in practice (Guimaraes & Langley, 2010). This activity is geared towards
enhancing customer relations and encouraging self-criticism. There are a number of
benchmarking styles namely; process benchmarking, internal benchmarking, performance
benchmarking, functional benchmarking, generic benchmarking, strategic benchmarking, and
competitive benchmarking (Watson, 2010).The performance level of organizations found in any
sector or business is exceptionally critical to management in view of the fact that it describes the
end result which has been realized by an entity or a collection of individuals in an institution. In
this study, however, institutional performance is described in terms of the capacity of an
organization to satisfy the preferred expectations of three key stakeholders consisting of owners
(government), workforce and clients. To Chen and Chen (2008) institutional performance implies
the “conversion of inputs into outputs for realizing definite results. With consideration to its
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substance, performance enlightens concerning the relationship linking least and efficient cost
(economy), among efficient cost and recognized output (efficiency) and connecting output and
attained result (effectiveness).
Borade (2008) states that institutional performance entails persistent activities that set up
institutional goals, monitors the growth towards the objectives and makes modifications to
realize the objectives more effectively and efficiently. It can therefore be argued that
organizational performance can be judged in terms of whether or not an organization has
achieved the objectives set before it. Borade (2008) further states that a measure of
organizational performance is an understanding of the relationship between economic inputs and
outputs. Financial and operational limitations have been suggested to be one of the most main
hurdles to growth (Storey, 2010). It has also been suggested, that especially supermarket’s face
the most difficulties in achieving their financial and operational objectives, it is for this reason
most of them are turning their attention to benchmarking so at to be financially stable and
independent.
Benchmarking provides a gap analysis tool between where a company is and the best in class
organizations. Innovations and technical breakthroughs are identified and their applicability
assessed. Most benchmarking agree that benchmarking focus on how to develop any business
process specified by taking advantage of most excellent practices. The practices are the grounds
of top performance (Coughlan, 2011). Learning top practice offers the maximum prospects for
attaining strategic operational and financial benefit. Benchmarking also promotes the evolution
of a learning culture through the organization. It is the key to continuous improvement, total
Quality management and competitiveness over a long period. Making better informed decisions
based on getting more and better information ensure less chance for error.
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Through benchmarking, a business is able to apply best practices in order to achieve best
performance. In a competitive market place quality improvement tools can help align key
business process in the supply chain to achieve higher customer satisfaction, business
competitiveness and bottom-line results (Cassell et al., 2000). According to Hinton (2001),
benchmarking is widely accepted in the private sector in the exploration for and absorption of
best practice to realize competitive advantage.
A supermarket is a marketing intermediary that sells to ultimate consumers for their own use.
Supermarkets create utility for consumers, that is, the need-satisfying ability and worth that an
institution adds to commodities and services by making them more valuable or available to
customers. In East Africa, Kenya is the most highly developed in terms of existence of
supermarkets. The Kenyan supermarket division is composed of diverse categories of local
chains: Grocery, Electronics (GAIN, 2008). It was noted that the bulk of supermarkets are in
Nairobi. Supermarkets in Kenya mushroomed from upper income suburbs in large cities to
middle class and poorer consumer markets. The spread of supermarkets then advanced into
`poorer and less advanced countries` such as Uganda, Tanzania, Rwanda and South Sudan.
Njenga (2006) noted that advancement in supermarkets is more evident from the fact that
Kenya’s five major towns; Nairobi, Kisumu, Mombasa, Eldoret and Nakuru had more than 300
supermarkets. The expansion of Kenyan supermarkets is similar to that of South Africa.
Presently, Kenya has more than 300 supermarkets distributed across the country (Economic
Survey, 2015). Mageto (2009) maintained that the supermarkets sector composed of three tiers,
first, second and third tiers. The clear market leaders Uchumi, Nakumatt and Tuskys
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supermarkets belong to the first tier. They have domestic-capital chains representing 65% of the
supermarket sector (Neven and Reardon, 2004). The second tier, Ukwala and Naivas chains,
have 28% of the huge design stores in Kenya. Supermarkets in the second tier sector have gone
beyond the other supermarkets and are increasing more rapidly, growing their supremacy over
time. The third tier consists of small chains of which are about 40 and autonomous (single stores)
supermarkets. In this category, we find the smaller cities as well as those that have
conventionally accommodated high-income set and emigrants. Supermarkets in Kenya play a
very significant economic role.
Each supermarket strives to ensure a memorable shopping experience to their customers to win
customers loyalty and consistent shopping visits. There are many supermarkets operating within
Kisii county. Other countries have also entered the local market notable among them South
Africa`s which entered the market with the aim of revolutionizing the supermarket business in
the region. Supermarkets in Kisii are increasingly growing in number and size and is expected to
grow further in the future. The supermarkets in Kisii has faced stiff competition as each
superstores endeavor to outsmart each other. The divergent consumers taste for the different
brands and the consistent consumer disposable income has ensured considerable growth in the
market.
1.2 Statement Problem Benchmarking for best practices is an important activity for organizations including
supermarkets aiming to improve performance . It entails comparing key activities with world
class best practices; and where viable replicating the same in the organization .In doing so, the
benchmarking organization gains in many ways by avoiding the managerial and operational
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challenges that peer organization could have encountered in the past. If carried out effectively,
benchmarking could significantly help an organization operate efficiently hence achieve
quality production of goods and services.
Recently, however, some supermarkets in Kisii had been performing poorly in terms of
profits ,sales and general performance That some supermarkets in Kisii have recently been
performing poorly in terms of profits, sales etc and this could be as a result of failure to
benchmark with industry’s successful supermarkets. As it stands, very few studies in Kenya
have attempted to assess the relationship between benchmarking practices an organizational
performance specifically in supply chain management. In addition, there exists no study done
on the subject area for supermarket in Kisii town. This study therefore seeks to fill this gap
and will assess the role of benchmarking on the performance of supermarkets in Kisii Town.
1.3 Research Objectives The main objective of this study was to assess the role of benchmarking on the performance of
supply chain management a case of supermarkets in Kisii County , and the study was guided
by the following objectives :-
i. To identify the internal benchmarking applied by supermarkets in Kisii County as a
strategy for enhancing organizational performance.
ii. To establish the role of competitive benchmarking in enhancing the organizational
performance of supply chain management in the supermarkets in Kisii County.
iii. To establish the generic benchmarking encountered by supermarkets in the performance
of supply chain management in the supermarkets in Kisii County .
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1.4 Research Questions i. What is the internal benchmarking applied by supermarkets in Kisii county as a strategy
for enhancing organizational performance?
ii. What is the role of competitive benchmarking in enhancing the organizational
performance of supply chain management in the supermarkets in Kisii County.
iii. What is the generic benchmarking encountered by supermarkets in supply chain
management in supermarkets in Kisii County ?
1.5 Significance of the StudyTo the Supermarkets, this study was going to recognize the challenges that were faced in
implementation of business process improvement approaches by the supermarkets in Kenya.
New investors made use of the study to verify critical aspects relating to the supermarket
business. The information to be gathered from the study was of essence to the investors as a
guiding principle to understand the dynamics and operations related to the supermarkets
business. Researchers and academicians used the study to expose further on the study topic. The
study data and information obtained was to explore further the topic for more understanding.
This was used for referencing on the topic and guide interested persons on the same for details
and deliberations. To the government and policy makers, in the development of Government
policy papers, the role of the supermarket sector greatly needs the effective participation of
competition watchdog. The policy maker was able to know how well to incorporate the sector
and how effectively to ensure its full participation. The study provided information for
government and policy makers that were relevant for ensuring that the retail market industry
was well regulated.
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1.6 Scope and Justification of the studyThis study confined itself to supermarkets in Kisii County and was only dealt with employees
in supermarkets in Kisii County . The geographical area was Kisii County which is located in
Nyanza region. The research confined itself with the regulations which focused on
benchmarking practices and it’s importance in the supply chain management. That no research
had been carried out on the subject specifically for supermarkets in Kisii ,this sought to fill this
gap by evaluating the role of benchmarking on the performance of supermarkets in Kisii town.
1.7 Limitation of the studyThe research was only limited to supermarkets in Kisii County ,the findings of the study was
only duplicated in other parts of the country with caution and cannot be generalized
1.8 Assumptions of the study
This study assumed that all the information given by the respondents was true to the best of
their knowledge and that it assisted the researcher. The study was taken into consideration the
assumption that variables that was used in the study was not change in the cause of the research
period and that the respondents gave correct and valid information so as to get valid data.
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1.9 Definition of Terms Benchmarking : A measurement of the quality of an organization's policies,
products, programs, strategies, etc., and their comparison
with standard measurements, or similar measurements of its
peers
Performance : Is fulfillment of an obligation, in a manner that releases the
performer from all liabilities under the contract.
Practices : A method, procedure, process, or rule used in a particular
field or profession
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CHAPTER TWO
LTERATURE REVIEW
2.0 IntroductionThis chapter will discuss the theoretical review, empirical review and the theoretical framework.
2.1 Theoretical Review
2.2 Theoretical Framework The theoretical foundation of this study was anchored on contingency theory, resource
dependence theory and information theory.
2.2.1 Contingency Theory
This theory asserts that there is no optimal method for an industry and the institutional structure
of the business to be systematized (Fiedler, 2011). Further, it argues that in any organization, the
most fitting structure is the one that best fits a known operating contingency, for instance the
environment. Each business is faced with its own set of inner and outer challenge as well as
particular environmental events that affect in distinguishing stages of environmental
uncertainties therefore there is no one optimal institutional plan for every firm since each
organization has diverse organizational culture and viewpoint towards risk (Delmas & Montiel,
2010).
Benchmarking is recognized as an important means for continuous enhancement of excellence. A
huge number of research works by a range of writers mirror the attention in this system. An
analysis of literature on benchmarking has been done in the past by a number of scholars.
Nonetheless, bearing in mind the contributions in the recent times; an all-inclusive assessment is
attempted here. In the business world, a benchmark is a standard of excellence against which to
measure and compare (Saxena, 2011).
2.2.2 Resource Dependence Theory Resource Dependence Theory (RDT) is based on the notion that the external resources of an
organization influence the performance of the firm. The procurement of external resources is a
significant principle of management of any company. On the other hand, a theory of the
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consequences of this significance was not made official until the 1970s, with the publication of
The External Control of Organizations: A Resource Dependence Perspective (Jackson & Lund,
2000). Resource Dependence Theory has inference as regards to the most favorable divisional
formation of institutions, employment of board members and other staff members, plans to be
used in production, external organizational relations, the contract structure, and other features of
organizational strategy. Resource Dependence Theory is therefore one of the many theories of
institutional researches regarding the conduct and performance of an industry (Camp, 2010).
2.2.3 Information Theory Those companies that may look for ways to communicate their environmental performance to
outside shareholders and stakeholders may be hindered by lack of full understanding of the
commodities, practices and resources going through their supply chains. This might be due to
suppliers may cling to some information about their environmental performance and the impact
the customers will experience. This situation is also known as information asymmetry (Khan,
2011). The main benefit of green supply chains is obtained from the potential to market and sell
green products. This kind of capacity can potentially develop innovative commodities thereby
building a competitive edge for the firms. Despite all these, the businesses may perhaps not be
able to gain or gain owing to the information asymmetry coming out of the consumers’ failure to
distinguish how green the commodities or materials from the supply chain might be (Delmas &
Montiel, 2010).
2.3 Empirical Literature
2.3.1 Internal Benchmarking applied by supermarkets Elmuti and Kathawala, 2012),internal benchmarking is a comparison of a business process to a
similar process inside the organization to acquire the best internal. business practices.In the
private sector, a retail food store chain selects its most profitable store as a benchmark for the
others. increased productivity should lead to improved products or services that meet or exceed
customers’ requirements to enable the organization remain competitive in business. In fact, the
end-result of any typical work process, whether distributing a physical product or a service,
should be something of worth that meets the requirements of the next client in the process or
those of the end-user. The foregoing benefits of benchmarking should enable the organization
that applies benchmarking to rise to a position of competitive advantage. The organization must
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understand the competition through competitive benchmarking of products, services or work
processes; and develop effective plans to deliver those products and services competitively
(Camp, 2010). That means the company must consistently deliver products or services of
superior quality at a lower cost than its nearest rival to maintain its competitive advantage.
An increasing rate in studies done on benchmarking has been realized, although a larger
percentage of those studies relate to the effects of best practices on performance point out that
those relations do exist; nevertheless, there is very slight suggestion of the strengths of those
relations (Briesch, Ciarreta & Zarraga, 2012). With any suggestion lacking of the strength of a
relationship, it is much harder to prioritize practices for execution and implementation. This kind
of categorization would be able to permit benchmarking to be implemented in a series that would
facilitate the attainment of highest benefits.
According to Elmuti (2012), different types of benchmarking with suitability depending on
operational and strategic objectives. Elmuti,(2012) further categorize benchmarking into four
types as internal, competitive, functional, and process benchmarking. The focus of process
benchmarking is the best work practices by emphasizing on the similarity of procedures and
functions rather than the business practices of the company that one is benchmarking with. This
type of benchmarking can be applied to organizations from different departments of the
economy. In another conceptual research paper with consistent findings, Bhutta and Huq (2012)
describe two additional types of benchmarking: generic and strategic benchmarking. Elmuti and
Kathawala (2012) caution that, each organization should be able to assess its personal perception
of benchmarking and then plan on how they would wish to apply the process. The firm should
establish whether their main focus is monetary or whether it’s on meeting customer needs, since
this is the only efficient way to initiate the benchmarking process.
Elmuti, & Kathawala, (2012). benchmarking compares Supermarket’s industry methods and
financial performance metrics to business most excellent or most excellent practices from other
companies. Supermarkets management recognize the greatest outlets in their business or in a
different firm where related processes are present, and judges against the outcomes as well as the
processes of those considered to one's own outcomes and processes. Through this mode the
businesses gain knowledge of how well the targeted firms achieve and, more prominently, the
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production methods that elucidate why these businesses are flourishing. Benchmarking has
various benefits; it offers an incentive for building breakthrough change programs reality and it
enlarges an organization’s experience base. It also provides a self-determining appraisal of how
well a process is operating by assessing similar processes in the organization (Watson, 2014).
Benchmarking contributes to competition fundamentals such as customer focus, organization
learning, innovation and motivation.
Mugenda, O.M., & Mugenda (2003), benchmarking provides a gap analysis tool between where
a company is and the best in class organizations. Innovations and technical breakthroughs are
identified and their applicability assessed. Most benchmarking agree that benchmarking focus
on how to develop specified business process by taking advantage of most excellent practices.
Most excellent practices are the grounds on performances which are on top performance
(Coughlan, 2013). Learning top practice offers the maximum prospects for attaining strategic
operational and financial benefit. Benchmarking also promotes the evolution of a learning
culture through the organization. It is the key to continuous improvement, total Quality
management and competitiveness over a long period. Making better informed decisions based on
getting more and better information ensure less chance for error.
Mutuku, J. K (2010), argues through benchmarking, a business is able to apply best practices in
order to achieve best performance. In a competitive market place quality improvement tools can
help align key business process in the supply chain to achieve higher customer satisfaction,
business competitiveness and bottom-line results (Cassell et al., 2010). Benchmarking
contributes to competition fundamentals such as customer focus, organization learning,
innovation and motivation.
Okombo, (2013), benchmarking provides a gap analysis tool between where a company is and
the best in class organizations. Innovations and technical breakthroughs are identified and their
applicability assessed. Most benchmarking gurus agree that benchmarking focus on how to
develop any specified business process by taking advantage of most excellent practices. most
excellent practices are the grounds of top performance (Coughlan, 2012). Learning top practice
offers the maximum prospects for attaining strategic operational and financial benefit.
Benchmarking also promotes the evolution of a learning culture through the organization. It is
14
the key to continuous improvement, total Quality management and competitiveness over a long
period. Making better informed decisions based on getting more and better information ensure
less chance for error.
Through benchmarking, a business is able to apply best practices in order to achieve best
performance. In a competitive market place quality improvement tools can help align key
business process in the supply chain to achieve higher customer satisfaction, business
competitiveness and bottom-line results (Cassell et al., 2010). According to Hinton (2011),
benchmarking is widely accepted in the private sector in the exploration for and absorption of
best practice to realize competitive advantage.
2.3.2 Role of competitive benchmarking in enhancing the organization performance According to Rich,(2012), competitive benchmarking is a direct competitor-to-competitor
comparison of a product, service, process, or method. This form of benchmarking provides an
opportunity to know yourself and your competition better; combine forces against another
common competitor. An example of competitive benchmarking within the Department of
Defense, might include contrasting Army and Air Force supply systems for Joint initiatives.
Within the private sector, two or more American car companies might benchmark for mutual
benefit against common international competitor. Waters (2010) puts it in the following manner,
“To be blunt, organizations use benchmarking to find ideas for logistics that they can copy or
adapt”. It helps in identifying the factors that are critical for success. It also portrays the factors
that are less important and thus needing lesser pie from the resources. These things are
fundamental for the long-term success of any business. Since the business environment is
changing rapidly, there is a need for setting new benchmarks. Supply chain embodies all such
activities that influence timing, cost, quality and delivery of a product. Increased competitiveness
has forced the businesses to look into matters of quality and costs. The need for benchmarking
arises when the company wishes to improve its operations or supply chain; wants to bring
organizational changes; enter into some mergers and acquisitions; receives some competitive
pressures or initiates some cost reduction actions.
According to Mike Donovan (2011), president of R. Michael Donovan & Co. Inc., an
international management-consulting firm, a company should ask many questions about its
15
supply chain characteristics as an initial benchmark. Some of these questions are pertaining to
the realization of the strengths and weaknesses of the supply chain sub-processes, generation of
information flow by the supply chain system, orientation and training of personnel on supply
chain processes, whether supply chain works on pull or push technology, whether continuous
improvements are dome with supply chain processes, continual improvement of logistical
business models and usage of e-commerce and technology etc. Benchmarking is not a trivial
process and needs a lot of efforts from organizations because the efforts here are directed
towards comparing oneself with the “best in the trade” and about reaching that level.
Benchmarking is related to Kaizen philosophy that says that everything has to continuously
improve. Kaizen is a Japanese management concept whose key elements are quality, effort,
involvement of all employees, willingness to change and communication. Actually, K in Kaizen
means Kai (Change) and Zen means (Good). So, Kaizen is all about making changes to become
good. Benchmarking is also the same as it also intends to make changes for achieving the
best.
Somekhand, & Lewin, (2011) benchmarking may be lower labor costs, For example, a small
manufacturing company may study how a top competitor uses robots for several basic plant
functions. These robots may help the competitor save a significant amount of money on labor
costs. Company managers may obtain information on these robotics systems through the
competitor's website or online articles. Subsequently, the company using benchmarking may call
the robot manufacturer to help set up its own system. Companies may also use benchmarking to
improve product quality. Sue,(2011). States that managers sometimes purchase leading
competitors' products. They may then take them apart, study them and determine how the
competitors' products outlast or outperform others in the industry.. They can then compare
various elements contained in competitive products to their own product line. Subsequently,
improvements to product quality can be made.
Wanyama,(2012), argues that A company uses benchmarking to improve its functions,
operations, products and services may enjoy increases in sales and profits. Customers are likely
to notice these improvements. The benchmarking company also may promote improvements
through company brochures. These efforts are likely to increase sales, especially among major
customers. Companies that operate more efficiently due to benchmarking can drastically lower
16
their expenses. These savings can lead to greater profits,some organizations use internal
benchmarking to improve performance in different departments. Department managers may
study and emulate the best practices of a particular department. These changes may make
improvements among all departments. Internal benchmarking has its advantages. Dishon,
(2014) , argues that the company's top department may not be functioning as efficiently as others
in the industry. This means the other departments were not truly benchmarking against the best
departments out there
2.3.3 Generic benchmarking encountered by supermarkets Generic benchmarking broadly conceptualizes unrelated business processes or functions that can
be practiced in the same or similar ways regardless of the industry, this means that without a
brand. It is a pure form of benchmarking. Venkatachalam, (2013) the need to articulate with and
integrate the various nodes within the supply chain,other suppliers, buyers, customers,
facilitating organizations) (Sahin and Robinson, 2012) and the pressure to be “green” or
environmentally conscious in word and deed Nijhof, (2002). The supermarket as a whole faces a
series of challenges in many of the geographical areas, goods demand growth is weak. However,
product trading has increased as a result of insufficient refining capacity in the main consuming
areas. This creates a pressure on margins in regions with a deficit, because finished products start
flowing from the regions with a surplus. On the other hand, this situation creates new markets in
other countries for local supermarkets and opportunities for increased efficiency in the overall
supply chain
The quality issues becomes more especially constraining as the new products specifications
demand more complex processing and expensive investment in new equipment at the supplying
point. These investments do not always provide an attractive return but are in many cases
required to keep the refinery operating. How well suppliers harness these forces or respond to
market demands may be assessed through the Resource‐based View of the firm. Since the
17
resource‐based view is not empirically superior to others like principal agent, transaction cost,
network‐based in defining Supply Chain Management , it nonetheless presents itself as the most
appropriate of existing theories of Supply Chain Management for analyzing the capabilities
both manifest and latent of firms and suppliers in managing knowledge; linking/interacting with
other actors in the supply chain, and in responding to external pressures and mandates to be
environmentally responsible. Furthermore, the interrelatedness of these capabilities within the
supply chain need to be realized by management and coordinated to reach the full potential of
their resources Wu et al. (2009). How well firms and suppliers mobilize and manage resources,
including managing knowledge, dealing with internal and external networks, and responding to
the challenges of “greenness,” are of no less importance in fact, perhaps even more so than
government policies, exchange rates, labour laws, and external competition from the Far East
(Soler and Lopez, 2013; Power, Sohal and Rahman, 2011).
According to Hamilton, 2003 ,the environmental regulations and compliance rules are also
becoming increasingly severe, making the operation of the existing facilities or the construction
of new supermarkets even more expensive and intricate. Moreover, the liabilities in case of
environmental damage and public image vulnerabilities are becoming big hurdles for the
supermarkets One of the most common challenges in Supply Chain Management is the so-
called bullwhip effect. Even small fluctuations in demand or inventory levels of the final
supermarkets in the chain are propagated and enlarged throughout the chain. Because each
company in the chain has incomplete information about the needs of others, it has to respond
with a disproportional increase in inventory levels and consequently an even larger fluctuation in
its demand relative to others down the chain (Forrester, 2011). Several authors (Bicheno, 2012)
have shown that the production peak can be significantly reduced by transmitting information
directly from the customer to the manufacturer.
18
Boasson, 2004, argues that the long distance between supply chain partners and slow modes of
transportation induce not only high transportation costs and in-transit inventory, but also high
inventory carrying costs in terms of safety stocks at the final customer location. The distances
between supply chain partners presents a high variability of transportation times that can hinder
suppliers because of service levels and final customers in terms of safety stock costs. Moreover,
the transportation process is carried out either by trucks, ships, pipelines, or railroads. In many
instances, a shipment has to exploit multiple transportation modes before reaching the final
customer’s location. “Very few industries deal with that kind of complexity in shipping,” said
Doug Houseman, a senior manager at the consulting firm (Morton, 2013). Constraints on
transportation modes in this type of industry induce long lead times from the shipping point to
the final location of customers compared to other industries. Considering the amount of
inflexibility involved, meeting the broadening prospect of products demand while maintaining
high service-levels and efficiency is a challenge in the supermarkets.
2.4 Empirical Studies
Okombo (2013) did a study on Benchmarking Practices in the supermarkets, Kenya. This
particular research will seek after establishing the degree of application of benchmarking in
supermarkets in Kisii County , Kenya; and to determine the role of benchmarking used in the
supermarkets in Kenya. Dishon (2014) did a research to explore the effect of benchmarking
practices on financial performance of small and medium supermarkets in Kenya. The research
will be seek after establishing the effect of benchmarking practices on the financial performance
of supermarkets in Kenya, as well as to find out the new business practices adopted by the
supermarkets as a result of benchmarking practices to improve their financial performance. The
study found out that there exist a relationship and most of the supermarkets that carry out
benchmarking practices and adopt the practices which had a positive change in their financial
performance. The supermarkets should have their own policy which facilitates a body which
allows access to finances to supermarkets only to facilitate training on better business practices
to improve financial performance.
19
Lee (2015) did a study on benchmarking practices and performance of supermarkets in Kisii
County . The aim of the study will be to assess the role of benchmarking in the supply chain
management in the supermarkets in Kisii County. Sue (2011) did a study on Benchmarking
small business performance: barriers and benefits. The study will aims at reviewing previous
benchmarking research work broadly, establishing the backdrop to its development, and benefits
and difficulties relating purposely to implementation by supermarkets.
2.5 Summary of the Literature This study will anchor on contingency theory, resource dependence theory and information
theory. The attention of process benchmarking is centered on the best work processes by
stressing on the likeness of procedures and functions to a certain extent than the business
practices of that supermarkets that is being benchmarking with. Functional benchmarking is
performed externally against managers of the industry or the best functional operations of certain
Supermarkets. Internal benchmarking compares the organization’s internal activities and
processes of branch against other branches. Competitive benchmarking involves the comparison
of the company’s products, services or processes with those of direct competitors in the same
market while strategic benchmarking is undertaken when a company is attempting to change its
strategic direction and wishes to compare its performance against the competition in terms of
strategy.
20
2.6 Conceptual Framework Independent Variable
Dependent Variable
21
Internal Benchmarking applied by supermarkets
- Methods and financial performance
- Personal perceptions - Innovations and technical
breakthrough
Organization performance - Financial - Customer base/ market share - Internal business process - Learning and growth
Competitive benchmarking enhancing the organization performance
- Gauge the successes- find ideas for logistics- realization of the strengths and
weaknesses-
Intervening Variables
Figure 2.1 Conceptual Framework
The conceptual framework discusses about the three independent variables i.e Role ofBenchmarking , benchmarking practices and challenges facing benchmarking in thesupermarkets in Kisii County , the dependent variable also consist of supermarketperformance through finance , customer , internal business process and learning and growthand the intervening variable consist of government and stakeholders .
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design Mugenda and Mugenda (2003) noted that a survey research attempts to collect data from
members of a population and describes existing phenomena by asking individuals about their
perception, attitudes, behaviour or values. Surveys enable collection of data from a sizeable
population in a highly economical way. The data obtained was standardized, to allow easy
comparison. Moreover, it explored the existing status of two or more variables at a given point in
time.
3.2 Study Area The case study of this research was based in supermarkets in Kisii county . The study was
confined on the role of benchmarking in the supply chain management in supermarkets in Kisii
county
22
Generic benchmarking encounteredby supermarkets
- Knowledge within the firm - Demand growth - Resource based view
- Government power of regulations- Stakeholders e.g suppliers ,
shareholders and competitors
3.3 Study Population According to Ngechu (2004), population is the total collection of elements with common
observable characteristics about which some inferences can be made. A large set of observations
is referred to as a population while the smaller set is called the sample. The target population
comprised 200 employees in supermarkets in Kisii County .The targeted respondents was of
certain characteristics since purposive random sampling method was used during data collection.
These characteristics included respondents who were above 18 years.
3.4 Sampling Technique The study adopted a probability sampling design since each sampling unit had a known non-zero
chance of getting selected in the final sample and results generalized to the target population with
a specified margin of error through statistical methods. Stratified random sampling technique
was employed to obtain a reasonable sample size of the study and sampling frame was stratified
into undergraduate customers and graduate customers. This gave the researcher assurance of
representativeness, comparison between strata and a deeper understanding of each stratum as
well as their unique characteristics.
3.5 Sample Size Out of a target population of 200 employees from the selected Nakumatt supermarket the study
employed convenience sampling to obtain a number of respondents. The sample was 30% of the
total population and was suitable for this study as recommended by Scooper and Schondler
(2001).Determining the sample size is a complex task and involves much clarity with regard to
the balance between the resources available and number or accuracy of information obtained.
Qualitative factors must be considered including nature of the research, expected outcomes,
importance of the findings, number of variables to be studied, nature of analysis and resource
constraints. Quantitative factors included variability of the population characters hence a larger
sample size due to high variability of the account holders. Tests was conducted at 95%
confidence level in estimating the population characteristics; larger sample size was preferred
for accurate description of the examination systems.
23
3.6 Data Collection Methods & ProcedureThis research was collected primary data using questionnaires. The questionnaires comprised of
both open and closed ended questions in line with the objectives of the study. A five point Likert
scale will be used for closed ended questions. The questionnaire contained two sections each.
The first section sought to establish the respondents’ demographic data while the second section
sought to establish the respondents’ opinions on the three variables considered in this study.
3.7 Instrumentation
3.7.1 Reliability of InstrumentsReliability is important as it enables the researcher to make the necessary adjustments thus
making the data collected have more reliability, Nachemias(2004), states that measuring
instrument contains errors that appear inconsistent from observations to observations during
anyone measurement attempt or that vary each time given is measured by the same instrument.
3.7.2 Validity of Instruments Questionnaires was edited to ensure consistency across respondent and locate omissions as
recommended by Bryman and Cramer (1997).The usual procedure was assessing the content
validity of a measure to use a professional in a particular field, Mugenda and Mugenda (2009).
3.8 Data Analysis Methods Before processing the responses, data preparation was done on the completed questionnaires by
editing, coding, entering and cleaning the data. Data collected was analyzed using descriptive
statistics tabulations and bar graphs was used in the analysis. The descriptive statistical tools
helped in describing the data and determining the respondents’ degree of agreement with the
various statements under each factor. Data analysis was done using descriptive statistics and
regression analysis was carried out, analyzed and tabulated.
24
CHAPTER FOUR
DATA ANALYSIS AND DISCUSSION
4.1 Introduction This chapter discusses the interpretation and presentation of the findings obtained form field.
The chapter presents the background information of the respondents , findings of the analysis
based on the objectives of the study . Descriptive was used to discuss the findings of the
study . The study targeted a sample size of 60 respondents from which 50 filled in and
returned the questionnaires making a response rate of 83% , this response rate was satisfactory
to make conclusions for the study.
4.2 Demographic Information o the Respondents Table 4.1 Working experience
Response Frequency Percentage
25
Below 10yrs 46 92
10-15 yrs 2 4
16-20 yrs 1 2
21 and above 1 2
Total 50 100
From the research findings the study established that the majority of the respondents as
shown by 92% had a working experience of below 10 years , whereas 4 % of the respondents
had 10- 15 years , 2% 16- 20 years and 21 and above years, this implied that most of the
respondents had good experience of work .
Table 4.2 Number of branches the supermarket has
Branches Frequency Percentage Below 5 45 90
6-10 3 6
11-15 1 2
Above 16 1 2
Total 50 100
The study requested the respondents to indicate the number of branches of supermarket
they have. From the findings the study established that most of the respondent as shown by
90% said they have below 5 branches , a few of them said 6-10 which was 6% ,11-15 had
2% and above 16 had 2% .This is an indication that the branches were well distributed for
easy benchmarking to take place .
26
Table 4.3 Number of employees in the supermarket
No of employee Frequency Percentage Below 100 1 2
101-150 1 2
151-200 46 92
201 and above 2 4
Total 50 100
The study requested the respondents to indicate the number of employees in the supermarket .
Most of the employees said that the number of employees were between 151-200 which had
92% , 201 and above were 4% , 101 – 150 were 2% and below 100 were 2% , this indicated
that the supermarket had enough employees to work
4.3 Internal Benchmarking applied by supermarkets The researcher also sought after establishing the level of use of various internal benchmarking
practices in the supermarkets.
Table 4.4 Internal Benchmarking
Effects SA
5
A
4
N
3
D
2
SD
1
∑fi ∑fiwi ∑fiwi
∑f)
Less time and resources are needed for internal operations comparisons
20 2 8 10 10 50 162 3.2
Internal operations comparison enables management to spread expertise quicklythroughout the organization.
Internal comparisons enables our company access to sensitive data and information easily
10
5
8
10
10
5
2
20
20
10
50
50
124
130
2.4
2.6
27
Internal operations comparison exemplifygood practice
20 3 10 6 10 50 164 3.3
The results in the table 4.3 shows that internal operations comparison exemplify good practice to
a greater extent with a mean of 3.3 .Respondents indicated less time and resources are needed
for internal operations comparisons to a great extent with a mean of 3.2. Respondents indicated
with a mean of 2.6 that internal comparisons enables our company access to sensitive data and
information easily to moderate extent. From the findings it’s clear that Internal operations
comparison exemplify good practice are required for internal benchmarking .The study also
deduces less time and resources are needed for internal operations comparisons. This indicated
that once the objective of establishing operating standards within the organization has been
attained, internal benchmarking assists company managers in categorizing their Strengths,
Weaknesses, Opportunities, and therefore improve economic efficiency of the company .
4.4 Competitive benchmarking Table 4.5 Competitive Benchmarking
Effects SA
5
A
4
N
3
D
2
SD
1
∑fi ∑fiwi ∑fiwi
∑f)
The company compares with partners drawn from the same sector.
8 12 5 15 10 50 143 2.8
Our company does competitive analysis undertaken through trade associations or third parties to protect confidentiality
Our company assesses relative level of
18
22
2
15
10
2
5
8
15
3
50
50
153
195
3.1
3.9
28
performance in key areas or activities in comparison with others in the same sector and find ways of closing gaps in performance
Our company considers its position in relation to performance characteristicsof key products and services.
2 18 10 15 5 50 147 2.9
The results in the table 4.3 show that respondents indicated with a mean of 3.9 that their
companies assess relative level of performance in key areas or activities in comparison with
others in the same sector and find ways of closing gaps in performance to a greater extent .
Respondents also indicated that company does competitive analysis undertaken through
trade association or third parties to protect confidentiality with a mean of 3.1. Respondents
indicated with a mean of 2.9 company considers its position in relation to performance
characteristics of key products and services a great extent. Respondent indicated that the
company compares partners drawn from the same sector with a mean of 2.8
that to a moderate extent their companies do competitive. The results of the study supports the
study of Camp (2010) who noted that competitive benchmarking provides a chance to know
yourself and your rivals better; join forces against another common rival
4.5 Generic Benchmarking
Table 4.6 Competitive Benchmarking
Effects SA
5
A
4
N
3
D
2
SD
1
∑fi ∑fiwi ∑fiwi
∑f)
Profit . 10 20 4 6 10 50 164 3.2
29
Market share
sales revenue
15
20
5
15
10
5
5
8
15
2
50
50
150
193
3.0
3.8
The study sought to determine what has been the value of measures at the organization ,
from the findings majority of the respondents as show the rate of 3.8 that is sales revenue was
used more than Profit which 3.2 , then market share which is at the rate of 3.0 , this indicated
that Generic benchmarking is more used in the value of sales revenue hence enhance the
organizational performance.
CHAPTER FIVE
SUMMARY OF FINDINGS CONCLUSION AND RECOMMENDATIONS
5.1 IntroductionThis chapter presents the summary, conclusion drawn from the findings highlighted and
recommendation made as per the objective of the study which was to determine the relationship
between benchmarking practices and the performance of supermarkets in Nairobi County in
Kenya. The role of benchmarking on the performance of supply chain management .
30
5.2 Summary of the Research FindingsThe study objectives were to determine the role of benchmarking and the performance of
supermarkets in Kisii County in Kenya. The respondent rate of the study was 83% representing
50 respondents who filled and returned the questionnaires. The research also revealed that most
of respondents had a working experience of below 10 years. The study established that the role
of benchmarking has been applied in the supermarkets in Kisii County. The study revealed that
in relation to process benchmarking companies have focused on attaining enhancement in key
processes to acquire quick benefits and also improving on specific critical processes relative to
best performers but have not really considered creating process maps to make possible
evaluation and analysis as well as focusing on improving operations relative to best performers
in the industry. The results agree with study of Elmuti (2012) which caution that each business
ought to weigh up cautiously its own point of view of benchmarking and how they desire to
apply the process. The business ought to establish whether their focus is on monetary results or
on meeting client needs , given that this is the only successful way to initiate the benchmarking
on the performance of supply chain management.
The research also summarizes that in order to improve on functional benchmarking
supermarkets compare the business functions with others which have led to incremental
innovation. The study also noted that companies compares with allies drawn from diverse
business segments to uncover ways of improving related functions or work processes. There was
doubt by the study whether comparing the business functions with others often leads to dramatic
improvements. This findings concurs with the finding of Saxena (2011) which pointed out that
optimizing sales is a main goal for retailers, consequently. The research noted that less time and
resources are needed for internal benchmarking. The results are supported by Wöber (2001) who
indicated that once the objective of establishing operating standards within the organization has
been attained, internal benchmarking assists business managers in recognizing their Strengths,
Weaknesses, Opportunities and therefore improve economic efficiency of the business. The
findings were clear that companies benchmark with partners drawn from the same sector.
Furthermore, a company focuses on common approaches that have facilitated high –
performance to be successful . The results the study supports the study of Camp (2010) who
31
noted that competitive benchmarking offers a chance to be acquainted with yourself and your
rivals well; join forces against another common rival .
5.3 ConclusionBased on the research findings, the study concluded that role of benchmarking leads to improve
the performance of supermarkets in Kisii County. Supermarkets have focused on realizing
improvements in key processes to attain quick benefits and they have also improves specific
critical processes relative to best performers but have not really considered generating process
maps to ease evaluation and analysis as well as focusing on improving operations relative to best
performers in the industry. The study also concludes that functional benchmarking enhances the
performance of supermarkets in Kisii County.
Supermarkets compare the business functions with others which have lead to incremental
innovation. Apart from those companies also compares with allies drawn from diverse business
Segments to find ways of enhancing alike roles or work processes. Comparing the business
functions with others does not often leads to dramatic improvements of the supermarkets. The
study found out that internal benchmarking determines the performance of the supermarkets.
The research established that less time and resources are needed for internal benchmarking. Once
the objective of establishing operating standards within the organization has been attained,
internal benchmarking assists business managers in recognizing their Strengths, Weaknesses,
Opportunities, and Threats (SWOT); and as a result it improves economic efficiency of the
business. In addition this study concludes that competitive benchmarking has a positive
correlation with the performance of supermarkets in Nairobi County. The study found out that
the supermarkets benchmark with partners drawn from the same sector. The companies look at
their situation in relative to performance features of key commodities and services; they also
do competitive analysis. The study finally concludes that strategic benchmarking has an effect on
supermarket performance. Companies have improved competence for dealing with adjustments
in the outside environment through strategic evaluation.
32
5.4 RecommendationsBasing on the finding and conclusions above the study comes up with the following
recommendation;
The study recommends that operation managers of supermarkets ought to focus exceedingly on
realizing improvements in key processes to attain quick benefits. The operation managers also
have to improve on specific critical processes relative. The study also recommends best
performers to be considered in producing process maps to ease evaluation and analysis as well
as focusing on improving operations comparative to top performers in the industry. The study
also recommends that operation managers of supermarkets in Nairobi County to compare the
business functions with others which have lead to incremental innovation. They should also take
into consideration comparing their companies with allies drawn from Diverse business
segments to find ways of improving related roles or work processes.
The study further recommends that operation managers of the supermarkets in Kisii should
increase the level of internal benchmarking in their industries since internal benchmarking
requires less time and resources. The managers are advised to apply SWOT analysis method
while doing internal benchmarking since the method help in identifying their strengths,
weaknesses, opportunities, and threats of the company and therefore improving economic
efficiency of the company. In order to suppress stiff competition in the industry the study
recommends to operation managers to take into account competitive benchmarking, in relation to
this the operation managers of the supermarkets should benchmark their products with partners
drawn from the same sector. The companies ought to reflect on their situation in relative to
performance features of key commodities and services as well as doing competitive analysis.
By so doing the competitive edge of their companies will improve hence leading to better
performance of their company.
The study finally recommends that operation managers of the supermarkets have to improve on
overall performance of their supermarkets by focusing on common approaches that have
facilitated high -performance to be successful. They also have to improve potential for dealing
with adjustments in the outside environment through strategic evaluation, this can be attained
33
by looking into strategies set by other supermarkets and then coming up by their unique
strategies e.g. developing new products and services relative to best performers . The strategies
set ought to be the long- term strategies that have facilitated high-performance to be successful
5.5 Suggestions for further StudiesThis study advocates for further studies on the same topic of determining relationship between
benchmarking practice and organization performance to be carried out on other industry apart
from supermarkets. The industry can be communication industry
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APPENDICES
Appendix i: Questionnaire You are requested to fill out your personal information in the spaces below. Please tick only one
response
SECTION A: DEMOGRAPHIC INFORMATION
i. Years in operation of the supermarket
a) Below 10 years ( )
b) 10-15 ( )
c) 16-20 ( )
d) 21 and above ( )
ii. What are the number of branches the supermarket has?
a) Below 5 ( )
b) 6-10 ( )
c) 11-15 ( )
d) Above 16 ( )
iii. Number of employees in the supermarket.
a) Below 100 ( )
b) 101-150 ( )
c) 151-200 ( )
d) 201 and above ( )
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SECTION B
1. Internal Benchmarking applied by supermarkets
i. Does your supermarket focus on improving operations relative to best performers
in the industry ?
Yes No
ii. Do your supermarket produce process maps to facilitate comparison and analysis
Yes No
iii. Do your Supermarket compare with partners drawn from different business sectors to
find ways of improving similar functions or work processes ?
Yes No
iv. Do your supermarket improve overall performance, and focus on general approaches
that have enabled high-performance to succeed ?
Yes No
v. To what extent does your organization apply the following benchmarking practices? Use a scale of 1-5 where 5= Strongly agree 4=Agree 3=Not all 2=disagree 1=Strongly Disagree No Details SA A N D SD1 Our company compares its operations from within the
organization (e.g. business units in different countries).
2 Internal comparisons enables our company access to sensitive data and information easily
3 Less time and resources are needed for internal operations comparisons
4 Internal operations comparison enables management to spread expertise quickly throughout the organization
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2. Competitive benchmarking in enhancing the organizational performance i. What are the general process of benchmarking ?
a. identifying problem areasb. selecting top competitors who excel where a company falls short c. making the necessary changes.
ii. What types of systems are currently in use in your company to support
benchmarking?
a. Comparing like processes
b. Know your competition better
c. Possible partnership
d. Warehouse Management System
iii. To what extent does your organization apply the following benchmarking practices? Use a scale of 1-5 where 5= Strongly agree 4=Agree 3=Not all 2=disagree 1=Strongly Disagree No Details SA A N D SD1 Our company considers its position in relation to performance
characteristics of key products and services.2 The company compares with partners drawn from the same
sector.
3 Our company does competitive analysis undertaken through tradeassociations or third parties to protect confidentiality
4 Our company assesses relative level of performance in key areas or activities in comparison with others in the same sector and findways of closing gaps in performance
3. Generic benchmarking encountered by supermarkets
i. Do your supermarket need more funding and financial support to run the business ?
Yes No
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ii. What has been the value of the following performance measures at your organization
for the last five years?
Profit
Market share
Sales revenue
iii. Do your supermarket have Closer cooperation between companies and government?
Yes No
iv. Do goods reach in time to your supermarket?
Yes No
If No , please state the obstacle………………………………………………………
v. Are the neighbouring supermarkets near to your supermarket?
Yes No
vi. To what extent does your organization apply the following benchmarking practices? Use a scale of 1-5 where 5= Strongly agree 4=Agree 3=Not all 2=disagree 1=Strongly Disagree No Details SA A N D SD1 Our company compares its operations from within the
organization (e.g. business units in different countries).
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2 Internal comparisons enables our company access to sensitive data and information easily
3 Less time and resources are needed for internal operations comparisons
4 Internal operations comparison enables management to spread expertise quickly throughout the organization
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