Benchmarking involves

comparing how different companies $($both inside and outside the industry$)$ perform certain specific value chain activities and then making cross$-$company comparisons of the costs of these activities.

comparing the best practices in one industry against the best practices in another industry.

using company financial statements to determine which companies in an industry have the lowest overall cost per unit sold.

comparing how a company's own best practice costs stack up against the best practice costs of its rivals.

using activity$-$based cost accounting to determine how a company's resource costs compare against the resource costs of its close rivals.