Global Communications

Essentially, benchmarking is a tool. This tool can be employed in several areas as an indicator of business profit margins, investment returns, market cycles, sales, and costs. Benchmarking can also be used to access product development, services, customer responsiveness and even in how a business might improve products and other forms of service. Generally, there are two forms of benchmarking involved including internal and external benchmarking processes.

Finally, benchmarking is generally treated in a rather structured manner where a particular model might form the development of a step-by-step process. The idea of structured processes is to provide an objective process by where a business can clearly see where its progress is headed. With this idea in mind, a business can assess changes, variations of those changes, and even tailor the process to fit business expectations. The following examples of several businesses will give an idea of the process on general terms, and within the examples shown.

10 Benchmarked Companies

Longs Drugs

Company background

Longs Drugs is a pharmacy chain store located in the west coast of the United States. Brothers Thomas and Joseph Long founded it in 1938, with their first store in Oakland California. Longs Drugs currently has over 500 stores located in California, Colorado, Nevada, Washington, and Hawaii; and is headquartered in Walnut Creek, California.

On February 28, 2007 Longs Drugs announced that it would be closing 23 stores in Colorado, Washington, and Oregon, and would be exiting those markets entirely, because the company did not have a sufficient store base in any of those states to compete with its larger competitors Walgreens, Rite Aide, and CVS Pharmacy.

On 2005 Longs Drugs announced that it would be opening RX America prescription insurance plan.

On 2006 Longs Drugs announced that it would be opening the first mail order facility in Los Vegas, Nevada, and 3 other high-automated central fill facilities.

Concept outline

Longs Drugs has faced significant pressure from large competitors in Colorado, Oregon, and Washington. Longs Drugs didn't have the sufficient store base to grow in those states and overcome such competition.

The decision was to close all those stores and exit those markets entirely. Reducing the expenses on competition was a significant factor of closing those stores, then the corporation started to open new stores in California, Nevada, and Hawaii. Where the competition is will not be as stressful and sufficient store base to grow and increase the portability.

Since January 2006 the government of the United States rolled out Medicare Part D plan for senior citizen or any citizen who is Medicare Part A and B eligible. The Medicare part D started by paying as low as wholesale price for all prescription they covered and with a minimum of the dispensing fee. All pharmacy chain stores had a big impact and significant reduction in profit.

The decision has been taken by Longs Drugs to overcome such reduction is to reduce the labor on prescriptions. So utilizing the highly automated central fill facilities or the mail order facilities, where the dispensing fee for each prescription will be 1.5$ versus 5-9$ a prescription in any retail drug store.

Longs Drugs as an owner for RX America has created alliances with Medicare part D to offer prescription insurance plan for Medicare Part D eligible senior citizens.

This way RX America can organize with the affiliated drug stores for the preferred drug formulary and buy the most cost effective drugs. That will allow the profit margin to grow back again after the depreciation in profit since January 2006.

Walgreens

Walgreens background

Walgreens is a pharmacy chain, mail service pharmacy, pharmacy benefit manager, and specialty pharmacy, which have operations throughout the continental United States and Puerto Rico. Walgreens owns more than 5800 in operation with a current goal to have 7000 stores by 2010. Over 4 million customers are served by Walgreens daily chain wide.

Communication in Walgreens

Walgreens is a very good example of a very good communicated company. Walgreens has invested more than $1 billion in advanced communications and technology in the last few years. The system is based on communication between all 5800 stores, for example, employees able to find complete customers profile in the 5800 stores. Walgreens is the largest private user of satellite transmission data in the world, second only to the U. S. Government.

The Problem faced Walgreens as a drug chain was Medicare Part D plan as all other Pharmacy chain store suffered from tremendous cut in the budget. Walgreens had a negative impact for the first 3 months till March 2006. Walgreens faced this problem by reduce labor in a way doesn't affect the expected customer service. Walgreens utilized the well communicated system to have low prescription volume stores (using the minimum required labor) to help the high volume prescription stores by typing the data of the scanned prescription into the system or verify the accuracy of the data already entered in the system by the pharmacist only.

So the labor at the low volume stores gives the support and the help needed for the high volume stores.

Walgreens announced that it would be opening the prescription insurance plan affiliated by Medicare Part D. Walgreens will set the formulary drugs from the most profitability drugs specially with generic drugs.

Apple

The future of Apple Inc. looked doomed a decade ago. Today, it is literally an iconic company, reputed for its inventiveness (Leaders: Lessons from Apple; Innovation, 2007). Its ability to keep ahead of the times and exemplary arts of innovation are reasons why Apple has prospered. Amidst complaints on manufacturing defects and customer service, it remains ahead of the pack and three important lessons can be learnt from it.

First, Apple is, in short, an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists (Leaders: Lessons from Apple; Innovation, 2007). Global Communications (GC) can learn from this concept and apply it to their outsourcing strategy. Instead of strictly following the outsourcing methods of other companies, they can be creative and flexible on their outsource-scheme to reduce the impact on their employees.

Second,

...