The purpose of this paper is to contribute to the management and benchmarking methodology at the small and medium enterprise level jointed to industrial cluster. As emerged from this literature review, there has been almost nothing done in this context, however, the currency of benchmarking models for individual SMEs needs an innovative transformation to adhere to the dynamics of the business environment. As well, it has observed that benchmarking methodologies should focus on analyzing forward looking, predictive and future performance comparisons rather than static ones. This study finds that entering into cooperative relations with other SMEs and related partner institutions, SMEs will overcome their size limitations as well as improving their productivity, innovativeness and overall. Hence to compete successfully in the domestic and global markets, SMEs need an appropriate benchmarking model suitable for their new improved environment within clusters.