(a) (i) Benchmarking is the process of gathering data about targets and comparators that permit current levels of performance to be identified and evaluated against best practice. Adoption of identified best practices should improve performance.

(ii) Benchmarking has the following advantages:

• Position audit. Benchmarking can assess a firm’s existing position, and provide a basis for establishing standards of performance.
• The comparisons are carried out by the managers who have to live with any changes implemented as a result of the exercise.
• Benchmarking focuses on improvement of key areas and sets targets which are challenging but evidently achievable.
• The sharing of information can be a spur to innovation.
• The result should be improved performance, particularly in cost control and delivering value.

  (b) In choosing between the most suitable market entry strategy, the key criteria is likely to be:
  The opportunities for sharing or transferring Zamu Fashions’ other resources and capabilities with/to the new businesses: Apart from its brand, which of Zara’s other resources and capabilities can be utilised in the new business?

  • In-House
    In the case of bridal clothing and accessories, Zamu Fashions can probably utilise its existing design, manufacturing, marketing, and distribution capabilities – in which case Zara can develop this business in-house.
  • Joint Venture
    In the case of athletic clothing and equipment, Zamu Fashions may need to access the technical capabilities needed to design products for different sports – hence, a joint venture may be appropriate.
  • Licensing
    In the case of hotel management, it is not apparent that any of Zamu Fashions’ resources and capabilities (other than its brand) relate to the design and operation of luxury hotels – hence, licensing may be the best solution.