Final answer:
Benchmarking is the process where a firm identifies important success factors and improves by studying industry best practices. This often works hand in hand with focusing on a company's core competencies to maintain a competitive edge.
Step-by-step explanation:
The process described where a firm identifies its critical success factors, studies the best practices of other firms, and then applies those lessons to improve their own operations is known as benchmarking. Benchmarking is a systematic way of examining and measuring a firm's own processes against those of leaders in the industry to gather information that will help improve performance. However, the effectiveness of benchmarking is often linked to a business's focus on its core competency, which suggests that being successful typically involves concentrating on a limited set of products or services that the company does best.
By identifying best practices in the industry, a firm can innovate to create products that are more appealing to consumers or more cost-effective to produce. This is closely related to how market competition drives innovation and the development of new technologies, offering firms a temporary advantage over their competitors and the potential for above-average profits. Samsung's CEO Gregory Lee highlights the importance of being relentless in the pursuit of new innovation to maintain a competitive edge.