Case example
Making eBay work
Question 1
Analyse eBay’s strategic capability using an analytical framework(s)
Threshold resources
• IT server platforms and space
• Offices and facilities
• Appropriate personnel
• Sufficient customers and suppliers Threshold competences
• Account management
• All other general managerial skills
• Sophisticated ICT skills
• Customers and suppliers who are competent
Unique resources
• The biggest on-line electronic exchange platform
• The eBay brand
• First mover advantage
• An active and vocal community of users
• Learning from experience Unique competences
• A unique form of account management that balances central control versus decentralised community involvement
• Leadership
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• What aspects of eBay’s strategic capability are easily copied by new entrants and if so would you copy them and how would you copy them?
The fact that eBay does have some successful competition means that its strategic capability has become less unique. There is a hint in their competitor profile that innovation and perhaps adaptability to different cultures as they innovate is not core to eBay and something which has been developed more successfully by others working within their own national culture. Indeed, eBay rules in its own territory of North America and in Europe. The search capability of eBay also means that niche players do not really make sense, whereas the consumer trust that comes from being a big player is worth everything when trading on-line, as is the notion that whatever you want it will be on eBay because of its size. Thus, the so-called network effects of eBay (the bigger the company, the more successful it will be) and its first mover advantage that has led to this level are key to its success.
The extent to which you consider whether any new competences have been created over time is a function perhaps of how much you buy into their secret being Web 2.0 management. If this is a key to their success then they have probably just built on web management skills transforming them as the web develops. If not, you might say
Connected strengths decide eBays force of rivalry and henceforth the productivity and engaging quality of
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage
How the five forces analysis reveal about the nature and strength of the various competitive pressures eBay faces
There are many major competitors for EBay. Of the many companies that are in the same industry which are at the top of the Hoovers in depth list is Amazon, Google, Overstock.com, Walmart.com, HSN and the list goes on. The industry that these companies are in is a multibillion dollar industry. All these companies know that the consumer is their main concern. The consumer will always have a these companies doing all they can so that they stay on top.[6]
eBay needs to focus on several issues to become more competitive. One issue is the fact that their competitors, like Amazon, make website purchases less difficult. On Amazon a customer can make a quick buy instead of having to bid on an item, wait for the auction to end, and then see if they won the auction. Another issue for eBay is the customer’s perception that scams are more likely on their site since purchases involve individuals and not companies. Even though eBay has the buyer protection plan to counter this idea, some customers might still shy away because they do not want to take a chance of having to go through the dispute resolution process in case it is a scam. When looking at Amazon’s return policy, they back their buyers 100%. If the buyer is not satisfied with the product or it doesn’t match the description that was on the website, Amazon will give the buyer a full refund. Looking at this from a buyer’s perspective, it makes purchasing more convenient to return a product as opposed to having to track down the buyer and trying to work out a resolution. I think that if eBay changes the protection policy and would
Database System: A database system is an important part of an eCommerce website. The database is used to store information about the products for sale on the site. The database will hold information such as store pricing, descriptions, images and other details. In addition to this the customers details are
This report seeks to evaluate the major issue facing eBay with regards to its international strategy. This will be done through the analysis of eBay’s competitive environment using the Porter’s 5 forces and positioning in the industry using the BCG portfolio matrix. Following which, we will proceed to identify the sustainable competitive advantages of eBay using the resource-based view of the firm. The core competence of eBay will also be discussed. Through an overview of the above mentioned analyses, we will propose recommendations to address the problem faced by eBay.
The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. “Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its
Following a 220% increase in profits and 800% increase in revenues over six months, eBay Inc. is considering the following courses of action:
Ebay, as a company itself, fits more in the category of an oligopoly, which is actually pretty common in any market. Other alternative websites include Yahoo!, Amazon, and Quibids, but there are only a small number of them, certainly not hundreds as in monopolistic competition. Also, eBay is interdependent on the few other auction website companies, competing with the fees they charge, as well as quality of customer support, and buyer/seller reliability. Another characteristic of eBay that coincides with it being considered an oligopoly is the fact that it has numerous entry barriers. It’s such a large company with many restrictions, and it would be hard for an up and coming substitute auction website to break into the market and compete with eBay or the other top companies in the industry. (6)
Assessment of eBay´s choice of market entry strategy for China, listing both the advantages and disadvantages of its acquisition strategy Assessment of the potential benefits and risks of eBay´ s joint venture with Tom Online Assessment of both companies: eBay and Tom Online, decisions on their respective
The business opportunity for eBay as of right now is not great although there is a lot of potential growth in the future. In 2014, the Indian ecommerce industry showed a tremendous growth. This growth is driven by the rapid adoption of technology such as smartphones and tablets (ecommerce in India – Accelerating growth, 2015). There are opportunities for eBay to expand its market and invest more in the future. But there are also their competitions that they need to worry about. A company like Amazon is a well-known international online shopping superstore where you can buy almost everything. There are Flipkart and Snapdeal that started their online store in India. eBay is losing its battle with their competition. For example, eBay Inc. pumped in about `650 crore into the India business last year. In comparison, Flipkart raised about $1.4 billion from institutional investors in the last 13 months, while Snapdeal mopped up $1.1 billion in about the same time. Amazon also announced in that the company will pump in $2 billion into India. Amazon has infused `2,437 crore into its India arm. (live mint, 2016). Although eBay is not making as much revenue as they wanted the future generation in India will become more online. The Indian youth will dominate the county 's 130million strong urban mass and it will drive the consumer market growth over the next 510 years (The
E-commerce is a process of buying, selling, transferring, or exchanging products, services, and/or information via electronic transactions. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. E-Commerce is swiftly growing throughout the years with the development in Internet and innovation. The gigantic development of virtual groups - individuals getting together in ad hoc groups online - guarantees to alter the poise of economic power from the producer to the customer. This report presents the compensations and concerns e-commerce industry would face in the next five years.
The internet, what a wonderful example of connecting two people thousands of kilometres away with only the touch of a button. How extraordinary to think that in the pocket of most people is a device that connects one to unthinkable amounts of data and people only with the touch of a button. Almost all of us use smartphones on a daily basis. Smartphones work best when certain applications that supply different services are used (Basu:2008). Thus, developers saw a gigantic gap in the market of online applications and software sales. People sell different applications and software to different people in different countries throughout the world even though they aren’t physically present in the countries that the sales are made.
Despite the rapid growth of E-commerce sites, 43 percent of the them fails, and the difference between the success and the failure is consumer experience, according to Ecommercetimes.com. The Dotcom Survival Guide reported there is still one resource left untapped that can save dotcoms from failure. It's the one resource that historically is most ignored in favor of ads, press, and flashy features yet it's the one resource that can lead dotcoms to survival. That resource is customers. Customers can provide the revenues needed to attain profitability. Customers can give the word-of-mouth marketing to drive traffic. Customers can give the feedback needed to continually improve the website.