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Discussion Thread: REPLY Cost Management, Strategy, Technique (Week 1)
Lena A. McQuary
BUSI 601
Liberty University
Dr. Charlene Geisler
1/22/2023
Author Note
Lena McQuary
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Lena McQuary
Email: lmcquary@liberty.edu
Thank you, Marc, for sharing your analysis of how benchmarking could help First
National Bank. Understanding your market and competition is essential for all businesses to
succeed and thrive.
Perhaps we could look at First National Bank to benchmark Bank of America because
while Bank of America is a major player in ecommerce and First National Bank could learn from
them and vice versa, in ways, the two companies target different consumers. From the text of
(Razipour-GhalehJough, S., Lotfi, F. H., Rostamy-Malkhalifeh, M., & Sharafi, H. (2021), “Data
Envelopment Analysis is a method for performing assessments, including the recognition of
efficient decision-making units, and introducing benchmarks for the inefficient ones. Sometimes,
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the performance of organizations not only depends on the period under evaluation alone but is
also under the influence of production of the former periods.”
The textbook identifies benchmarking being a process of identifying your firm’s critical
success factors, analyzing the best practices of other firms in these same success factors, and
then implementing improvements to match or beat those competitors, (Blocher, E., Juras, P., &
Smith, S., 2022). It’s possible that Bank of America could be a direct competitor to First
National Bank.
How has First National Bank gained market share? In what areas are they beating First
National Bank, and how can First National Bank address those areas? What is First National
Bank doing well that we can match or better? In benchmarking against competition in the same
industry, First National Bank is likely to have more success gaining back market share. From the
text (Kumar, A., & Srivastava, A. (2021), “A comparative assessment of Cost Income Ratio
(CIR) shows that the behavior of CIR and its relationships with other vital financial parameters
of scheduled Urban Cooperative Banks (UCBs) in India is different from that of the commercial
banks.”
It is always beneficial to learn from the success of others and innovation is invaluable,
which studying Bank of America could provide, but to truly practice benchmarking, First
National Bank should look within its own industry. Philippians 2:3 (ESV) reminds us “Do
nothing from rivalry or conceit, but in humility count others more significant than yourselves.”
Benchmarking is an act of humility, understanding that you don’t have all the answers and that
others can be doing things better than you. By learning from others in this way, it can help you
succeed and thrive.
Reference:
Blocher, E., Juras, P., & Smith, S. (2022). Cost Management: A Strategic Emphasis. In
prod.reader-ui.prod.mheducation.com (9th ed.). McGraw Hill LLC. (Original work
published 2013).
Kumar, A., & Srivastava, A. (2021). A Comparative Assessment of Cost Income Ratio of
Scheduled Urban Cooperative Banks in India: Benchmarking the Operational Efficiency.
Prajnan, 50(2), 145-165. https://go.openathens.net/redirector/liberty.edu?
url=https://www.proquest.com/scholarly-journals/comparative-assessment-cost-income-
ratio/docview/2668447293/se-2
Razipour-GhalehJough, S., Lotfi, F. H., Rostamy-Malkhalifeh, M., & Sharafi, H. (2021).
Benchmarking bank branches: A dynamic DEA approach. Journal of Information &
Optimization Sciences, 42(6), 1203-1236.
https://doi.org/10.1080/02522667.2020.1833441
