Benchmarking involves comparing a company's business processes and performance metrics to best practices from other industries. It helps organizations understand their strengths and weaknesses, satisfy customer needs, motivate employees, and improve competitive advantage. There are different types of benchmarking such as process, financial, performance, product, and strategic benchmarking. Benchmarking has advantages like product and process improvement, reduced time and costs, and competitive strategy development. However, benchmarking also has disadvantages if the wrong comparisons are made or if organizations are reluctant to share information.