Benchmarking is a valuable tool for process improvement, allowing organizations to compare their performance against industry best practices. To effectively use benchmarking, it is crucial to start by identifying the specific processes or areas that need improvement. This involves understanding the organization's goals, customer needs, and critical success factors. Once the focus areas are clear, the organization can proceed with benchmarking activities, which may include analyzing competitors' products, establishing target goals, and selecting benchmarking partners. However, the initial step is to identify what needs benchmarking, making option C the correct answer1. References: 1: The ASQ Certified Manager of Quality/Organizational Excellence Handbook, Fifth Edition 1.