Introduction
In today’s modern times, managing methods continue to develop as a base for optimum resource usage, efficiency, and success of any business. Techniques like value chain analysis and benchmarking equip managers to fine-tune their operations and grow their profitability. Through eBay as a case study, it is possible to assess the practicality of these strategies in the pursuit of organizational goals. Through detailed analysis, it has been highlighted that eBay emphasizes customer satisfaction, training of team members, revenue growth, and order fulfillment. These strategic priorities provide a favorable setting for eBay in terms of growth, profitability, and strategic development.
Through benchmarking, eBay has set up a modern approach to management, which allows it to detect and imitate the best practices of industry leaders. This study aims to reveal why benchmarking is a must management method for eBay. However, it aims to incorporate the best examples, displaying how other organizations attained superiority through benchmarking. Through an analysis of benchmarking Applicability to eBay’s practices, the study is intended to develop a comprehensive and tailored benchmarking implementation plan based on eBay’s specific principles and goals. This study will be carried out using thorough analysis and evaluation of the role benchmarking plays in the achievement of eBay’s critical success factors. Through the dissection of eBay’s strategic approach and the use of benchmarking as a tool, the study seeks to provide valuable insights for managers that can help improve the performance and competitiveness of their organization. Overall, by applying and comprehending the current management apparatus like benchmarking, eBay can cope with the complexities of the modern business world and triumph in a highly competitive domain.
The rationale for selecting benchmarking
According to Zameer et al. (2020), benchmarking is one of the methods that organizations utilize to get a competitive edge within the business realm. Moreover, Zameer et al. (2020) provide an example pointing out that benchmarking is an effective tool not solely for large enterprises but also for different industries. The fact that eBay did not take advantage of benchmarking in the past can be attributed to a few key points. First, eBay mainly operated with a small team of employees until recent years, when the business was limited by its business plans. In addition, because of the distinctness of eBay’s business model, its competitors seemed limited until other companies adopted this online marketing business. Not only that, it also has large-scale, long-term projects for big companies as well as the government. Customer service providers most desire giant jobs and tenders from prestigious firms and government agencies. Hence, such projects and contracts offer attractive returns and can contribute to a future lucrative business, thus facilitating company expansion and improvement. Over time, and as eBay continues to become an international pillar in e-commerce, its competition, both nationally and globally, has increased substantially. Consequently, if all factors suggested in the following paragraphs are considered, benchmarking can be considered a vital modern management tool while eBay competes and boosts its profit.
An in-depth analysis for benchmarking
Benchmarking is a contemporary management metric that can be used to identify and assess the practices and services undertaken by a firm(Blocher & Hicks, 2019). Following this approach, companies can add new management levels and use the same resources to renovate existing processes. Benchmarking can also be vertical, which refers to a specific company or industry being compared. Besides, horizontal Benchmarking includes particular operations, rules, procedures, and techniques. It is also equally valid that there are many different types of benchmarking, with Internal benchmarking analyzing the in-company processes and procedures. Benchmarking aims to analyze critical quantitative indicators to identify problematic areas. Competitive benchmarking involves comparing a company’s data with that of a direct competitor using the rivalry comparison method. The function of benchmarking is to look at qualitative data that helps to see how an activity is executed through processes, people, and technology.
Through the insights provided by Ogutu et al. (2023), Benchmarking can determine how a business performs compared to other businesses regardless of industry type. Ogutu et al. (2023) further stress that Benchmarking is used at various times for companies to measure their strength and weaknesses. For example, a business can start the benchmarking process to shift the management, reduce costs, or resolve an economic crisis; consequently, the general well-being of firms is enhanced. By adopting benchmarking, organizations can measure the performance of their services and business practices and compare them against others in the same industry. The benchmarking parameter is also crucial for keeping management accountants well-updated about the present industry situation and what alterations or innovations are required to stay ahead of their competitors.
Moreover, benchmarking helps organizational leaders identify and manage any loopholes in the business that prevent advancement(Blocher & Hicks, 2019). Also, Companies employ benchmarking to gauge competition and carry on change throughout their own company according to what has been observed and measured. Therefore, Benchmarking is a vital tool used to create early awareness of issues or decline in competitiveness. Also, the approach helps businesses to react proactively by implementing change and creating performance measures and goals based on solid data analysis.
According to Ogutu et al. (2023), Benchmarking is a part of a detailed study of competitors’ processes and practices. From the benchmarking process, emerging information can be employed to develop business networking and other relationships that will impact internal processes. In addition to selecting the best operating processes, management accountants can reorder what needs to change and improve customer satisfaction. The problem is that Benchmarking speeds up and eases the standard improvement operations in enterprises. Business change has a slow pace and results from identifying an issue or need for change. The implementation process is another vital approach in the benchmarking process. Therefore, by benchmarking, businesses establish a way of identifying and eliminating counter-competitive strategies of other companies. This approach allows a business to use successful strategies and learn from companies’ mistakes in the same category. Also, benchmarking helps save resources, which embeds the company in a high probability of success.
The success of benchmarking in a company is dependent on many factors. Goals and objectives need to be clearly defined and followed through. Also, the Data collected must be accurate, current, consistent, and well-measured. Therefore, managers in charge should be able to interpret the data and compare the collected data to their own and their competitors. Another major part of a company’s benchmarking for success is management. Management in a company must be devoted to employing and using the modern management approach. A company’s management must be open-minded and flexible to improve organizational growth. Having a solid business network also helps in the benchmarking process. Generally, networking leads managers to learn and gain internal knowledge about competitors and their operations, which is otherwise unavailable to the public.
Moreover, management accountants who need to become more competent with modern management techniques may hire a consultant who specializes in benchmarking to obtain advice and assistance. Typical advantages of companies using benchmarking are the facilitation of workflow, simplification of business processes, and reduced costs. Also, businesses can enjoy improved data collection and historical data keeping, which can help in management processes and identify processes that can be contracted or scaled down.
Implementation Process for benchmarking
According to Caeiro et al. (2020), benchmarking implementation commences with planning. Caeiro et al. (2020) further underscore that implementation is one of the most critical phases because errors or mistakes in planning can make the entire procedure unproductive. In order to make sure that this phase is complete, with minimal or no errors, the company should dedicate sufficient time and attention to the planning phase. Benchmarking should start with determining what to benchmark. Leadership teams must undertake their analysis and prioritization, after which they list the processes to benchmark. In addition, managers decide based on what organizations or industries they will benchmark. Managers will have to choose a benchmarking source, considering whether there is enough data to be collected from the source in time and whether the data is relevant to what will be benchmarked. The last step in the planning process is to organize the data collection. Hence, planning involves planning a schedule for interviews/meetings, sending information requests, and gathering data for benchmarking analysis. Once all the relevant data is gathered, the analysis stage is in its initial stage. Data shows where the industrial leaders’ processes and methods led to their success or failures. This information can be used to enhance their internal processes or even to introduce new processes. Goals that relate to process improvement and implementation are also created. The chosen goals should be achieved at a higher level than the competitors from which the data was gathered. With this, the company will not only reach the competitors’ level of success but will even surpass it.
After data is analyzed and goals are set, the integration phase is started. The next step after analysis involves the communication of findings and suggestions to upper management and company leaders. Management and leaders must be aligned with the proposed changes to move the initiative forward. The integration stage can be successful only if the organization’s leaders commit. After the investigation and recommendations are approved, improvement and implementation targets will be set. The last phase in the implementation process is called the action stage. A specific action plan has to be created based on the preceding stages. The action plan will outline the benchmarking schedule, work activities that the assigned members of the organization should complete, and how shortages will be addressed. As an action plan is implemented, management should monitor the process and ensure that responsibilities are met. The same applies to management, who are not only in charge of the smooth transition of the action phase through intervention but also have to guide the members when needed. On completion of the whole process, a report needs to be submitted covering aspects like the process that was followed. Also, the report should include any necessary deviations, the timeline achieved in contrast to what was supposed to be, and the impacts that have resulted from the overall process. Also, a system or process should be developed to sustain progress and continuity.
How other organizations apply benchmarking
Due to the ceaseless competition in the market, businesses more and more tend to resort to benchmarking strategies in order to have a better chance of maintaining their advantage. This approach is achieved by contrasting one’s processes, products, or services with those of competitors or leaders of the industry. This approach helps businesses understand where they perform well and where improvement is needed. In addition, benchmarking assists in increasing customer satisfaction. Through the examination of various companies’ successes, organizations can identify the best practices that lead to customer loyalty and satisfaction. With the help of comprehensive assessment and analysis, companies will be able to identify the crucial performance indicators and establish strategies for their goals to either meet or exceed the industry standards. Besides that, it shows the company in a good light and brings profit to the organization. Eventually, benchmarking helps organizations to adapt, innovate, and strive to achieve excellence in their fields, positioning them as leaders and, at the same time, satisfying their customers.
Canon
One of the first companies that went through a detailed benchmarking process was Canon (Kruskal et al., 2019). Canon imaging has grown despite stiff competition. Even though the company was deemed successful, its operating costs were extremely high. In the early 1980s, Canon was a target of threat by U.S. companies, which had been producing high-quality copiers and other products at low cost (Sushil & Anbarasan, 2021). Consequently, Canon’s profit was reduced sharply because of fierce international competition. The intensified competition forced Canon to adopt strategies to boost its products for the global market. Canon’s benchmarking goal was to achieve higher product quality and lower manufacturing costs. Also, some other Japanese companies benchmark their respective operations to boost their overall quality. Additionally, the companies wanted to plan their actions to overtake and go beyond the success of their Japanese and global rivals. Consequently, the benchmarking plan developed five stages, i.e., planning, analysis, integration, action, and maturity.
Canon’s journey with its benchmarking strategy commenced, but the company soon understood that benchmarking against its industrial competitors left it with industry practices that were not available. The shift occurred from competitive to functional benchmarking. Therefore, Canon resorted to benchmarking other sectors rather than their direct competitors. Through this approach, Canon transformed from merely being competitive to being functional. For this reason, Canon needed to model its business practices from different firms like Honda and H.P. With the data collected, Canon discovered that the functions could be consolidated and simplified. The firm subsequently introduced standard components, which reduced supply vendors from thousands to only hundreds.
Furthermore, a vendor certification process was introduced to maintain quality standards. Inventory revised to concentrate on genuine usage and saving time. With time, Canon developed a customer satisfaction program to meet customers’ needs and measure satisfaction. Thus, customers’ satisfaction improved significantly, leading to customer satisfaction and the well-being of the business reputation.
Starbucks
As for Starbucks, it is arguably the most famous fast-food brand both in the U.S. and worldwide. Besides Starbucks’ good reputation, this essay underscores that other firms undertake benchmarking of Starbucks’s success. Starbucks highly values benchmarking as it is essential to its success and social status. Moreover, Starbucks regularly assesses internally and with its competitors, such as McDonald’s and KFC. Fields of benchmarking include advertising, social responsibility, diversification, expansion, and customer loyalty and satisfaction. The organization constantly implements new or more effective means to improve efficiency, develop product designs, cut costs, and reach sustainability.
Starbucks’ benchmarking strategies vary with the purpose or objective in mind. To be precise, the company splits the benchmarking groups into four sections: planning, sourcing, making, and delivering. Planning comprises individuals launching products, advertising, or any other process requiring planning. Manufacturing refers to the making of products, whether by producing or sub-contracted. The delivery sector of the organization includes people who deliver, transport, or in any other way distribute Starbucks products. In that case, the benchmarking teams engage in the process of comparing the data to historical trends and competitors’ current data. The company has used benchmarking projects to discover discrepancies in their contracts, logistics, and sourcing. Through benchmarking, Starbucks addressed areas such as logistics, making it more sustainable and ensuring reasonable prices from the suppliers such as farmers. The introduction of Coffee and Farmer Equity benchmarking has increased the local producers’ trustworthiness without competitive threats. This agricultural practice is a business policy that entails a set of social, environmental, and economic responsibility guidelines and aims to provide long-term benefits for farmers, customers, and other stakeholders.
Moreover, Starbucks’ commitment to continuous improvement attained through regular benchmarking has helped the restaurant chain identify problematic areas more quickly and take preemptive actions. Therefore, Benchmarking was one of the critical points in Starbucks’s strategy, which enabled the company to be ahead of competitors, decrease costs, and maintain customer loyalty. Consequently, benchmarking has transformed the firm into a worldwide leader in the fast-food industry and the general business sector.
Plan for Implementation
Since eBay’s success is primarily attributed to customer satisfaction, team member training, increased revenue, and order fulfillment, eBay can strategically use benchmarking to boost productivity. As observed by Caeiro et al. (2020), benchmarking is one of the most effective methods for evaluating eBay’s crucial success factors and can identify areas of improvement and opportunities. Firstly, the implementation process will have the benchmarking team, which will be structured, and a plan for the benchmarking process will be developed. Customer service and quality assurance policies and procedures are the subjects of the benchmarking process. EBay will compare its operations to those of Microsoft and H.P. to achieve this goal. Despite these companies operating in different sectors than eBay, they consistently showcase exemplary customer service and quality product production and have unparalleled customer loyalty and retention. Among the key objectives eBay embarked on was data collection. The data collection process will occur through scheduled interviews with the senior managers of both companies. After data collection, the eBay benchmarking team will analyze the data, focusing on areas for improvement. During the benchmarking process, eBay’s team will selectively focus on the business processes, executive skills, customer service, and quality control measures implemented by Microsoft and H.P. eBay will obtain this information by studying how both companies have affected their customer satisfaction and loyalty.
Besides studying the processes and policies of both companies, eBay will be able to understand how the companies work together. Thus, benchmarking will promote the integration of these aspects into eBay’s processes. The factors influencing eBay’s service and product satisfaction will be listed using the SWOT analysis for strengths, weaknesses, opportunities, and threats. The data obtained will then be compared with data obtained from Microsoft and H.P. In order to find the gaps that exist within the company, eBay will be assessed and tackled by applying H.P. and Microsoft’s success factors. In another aspect, goals will be created and sometimes reviewed to keep eBay aligned with the progress of its implementation.
Evaluation/Applicability of Benchmarking for eBay
The e-commerce sector has witnessed an impressive boom in recent years, with eBay having to face tough competition around the business. With the growth of the industry, eBay has become engaged in the struggle to maintain its position in the market, which presents the need for developed measures for the company’s sustainability and victory. In the end, eBay remains one of the most competitive and permissive platforms due to the critical process of benchmarking. Amid intense ecommerce competition, eBay knows that pinpoint delivery of excellent customer service plays a vital role in that domain. Thus, benchmarking becomes a critical tool for assessing performance both internally and externally. Through benchmarking with competitors, eBay establishes a deep understanding of imminent threats and new opportunities. Thus, the company reacts proactively and innovates quickly. As one of the major competitors of eBay, Amazon is a giant in the ecommerce sector. Benchmarking eBay will collect the information where it is behind or ahead of the other retailers, especially Amazon, and therefore, will focus on the areas where eBay needs improvement. Additionally, benchmarking technology utilization for customer service allows us to access the latest information on customers’ preferences and technology innovations. Through the advancement of technology, eBay can update its service, making its customers more satisfied and encouraged to continue patronizing the store.
Internally, this benchmarking provides eBay with an approach to determine how well the company’s operations are going and where improvement is needed. By comparing its performance across time, eBay can assess growth, process improvements, and whether the adopted strategies are working. This internal benchmarking process, in turn, serves as a tool for continuous improvement, which leads to the fact that eBay needs to be adaptable and receptive to the movements and trends in the market. Therefore, eBay management can use benchmarking as a broad-based tool to lead in the competitive environment of ecommerce. Through the process of self-evaluation and comparisons with the competition, eBay receives meaningful data that leads the company to make strategic decisions that facilitate its long-term accomplishment and survival in the market. EBay can employ this strategic approach to differentiate itself, optimize performance, and maintain its position as a leader in the ecommerce industry.
Conclusion
This research has demonstrated that benchmarking, an affordable approach, helps identify and rectify gaps resulting from enhancements in the organization’s processes. According to research, benchmarking is a unique and valuable tool that can help enhance companies’ decision-making regarding reliability and flexibility. Benchmarking should be a part of eBay’s business model after a thorough understanding of the benchmarking concept and the criteria for selection that eBay requires. In support, this essay affirmed that eBay must benchmark to realize its strategic CSFs, stimulate its growth, heighten its competitiveness, and stimulate success in general. Benchmarking would also be the most critical determinant of eBay’s efforts if they installed a benchmarking system. Thus, this will help eBay collect data that they can use to create trends and patterns of their historical and current performance. Hence, as a result of this study, the goal of organizations, which is to give consumers as much satisfaction as possible, is a top priority. Besides, benchmarking ensures that companies are always on top of their competition, thriving on their organization’s weaknesses. Overall, this paper notes that benchmarking is a current and effective mechanism of management that assists distinct organizations in creating a solution that satisfies all customer expectations.
References
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