USING BENCHMARKING TO ENHANCE COMPETITIVE POSITION OF SMALL AND MEDIUM-SIZED BUSINESSES

Abstract

The article seeks to explore the nature and content of benchmarking to provide insights to such distinctive features of benchmarking as on-going (continuous) character of the process; the need to study, adopt and adapt the best practices; self-improvement; and the due regard to business (operational) processes. The study offers a classification of benchmarking projects by the criteria of relevance of their results and the implementation timeline. Thus, each competitive position is linked to a corresponding degree of business processes upgrade (Level 1); competitiveness increase (maintenance) (Level 2) and improvement of a competitive position (Level 3) along with revealing the backbone principles of competitive benchmarking as to competitive positions. Within the scope of this research, benchmarking of competitive positions has been carried out through analysing continuous improvement of small and medium-sized business performances.  The study presents a methodological framework on the use of a combination of key metrics (indicators) that take into account the external and internal business environment impact factors to assess the effects of the key factors of business success on small and medium-sized business performance indicators. Apart from that, an original approach has been developed to identify a competitive position level for small and medium-sized businesses to support their management decision-making process which accommodates the benefits of a multifaceted assessment and benchmarking of external business units and SMEs by the four groups of business units and six groups of reference indicators. The study also provides sound reasoning to management diagnostics procedures to enhance competitive positioning of small and medium-sized businesses through the implementation of an integrated set of indicators of integrity and adequacy of the competitive positioning model. Based on benchmarking, a range of management tools was generalized. The proposed methodology on identifying the business development level was tested on JSC "Cherkasy Liubava knitwear". A number of promising areas to develop competitive positions of small and medium-sized enterprises in the textile industry have been identified. The study argues that inefficient and ineffective implementation of benchmarking projects might result from the inability to "minimize restrictions (barriers)" caused by the wrong choice of the reference business unit.