Meg Whitman exploited Kotter’s Eight Step Process for Creating Major Change to turn eBay into the company it is now. First, the new CEO created a sense of urgency. Whitman ran numerous meetings with the company’s employees. She ensured the staff that the company was doing fine, but it was steadily evolving into something new. She explained that they were to help the company evolve into a huge and successful enterprise. Thus, she used the first step of Kotter’s process of change, i.e. she made employees understand that the change was vital.
Main Body
One of the examples of the use of Step 2 (i.e. forming the guiding coalition) is Whitman’s desire to work with Omidyar. Whitman claimed that Omidyar knew the companies’ employees better than anyone else. She understood that Omidyar would be the leader who would lead the employees effectively. One more example of the use of this step is Whitman’s decision to divide the employees into groups of professionals responsible for exact processes. They also hired high-profile marketing and legal professionals. Initially, the company consisted of engineers who shared responsibility, though the growth of the company made it impossible for this structure to be effective.
Whitman came up with a vision. She created it on the basis of the company’s values, i.e. community and fairness. The CEO understood that the company’s values were the reason why it had become successful. Whitman knew it was impossible to change that, but she also created the vision to fit a big company that could be successful in the global market. Therefore, this can be an example of step 3, i.e. creating a vision.
An example of the fourth step is Whitman’s way to make her vision and strategy work. She effectively communicated her vision to the head of the company as well as every employee. The CEO managed to convince employees that the company was evolving and it needed to change the strategy. However, the major values were still taken into account and the idea of community and fairness was at the core of the new strategy.
One of the examples of the use of Step 5, i.e. empowering action, was the way decisions were made. Thus, Whitman notes that the company was characterized by a very particular feature as there was no wrong side. Employees were encouraged to question decisions and come up with ideas and options. This was effective as they could get more data to make the right decision.
The sixth step is generating short-term wins. Whitman claimed that the company was growing. Thus, one of the short-term wins was the growth of the company. In fact, the company was growing really fast so employees could see how effective the new strategy was.
One of the examples of Step 7 (Consolidating Gains) is the way the company acquired other auctions. Thus, the acquisition of Butterfield & Butterfield enabled the company to enter the new market, i.e. the market of higher-end products. Admittedly, this was a very successful step as it led to an increase in revenue. Another example of the implementation of Step 7 is the decision to hire more employees. Thus, Whitman and Omidyar made a decision to have 300 employees and about 300 employees in the companies which eBay had acquired.
Conclusion
An example of Step 8 is Whitman’s consistency in HR management. They hire people and make sure these people have the same values and are ready to share the company’s vision.
Auction websites are online shopping sites for buying and selling goods and services. In this paper, two websites, eBay.com and Quibids.com, have been considered. From each site, the paper examines the bidding criteria based on an item of choice. The eBay.com website is among the most notable auction websites offering broad categories of products, including appliances, equipment, vehicles décor, and collectibles to furnishings between other products.
On the other hand, Quibids.com is a renowned auction website for penny auction. As far as the eBay auction website is concerned, a brand of a wristwatch for ladies-Xmas Gift D1W is considered. On the other hand, for Quibids.com, a camera carrying case- Kata Ex-07 is considered.
eBay.com
What type of auction format was used, and what item did you choose to follow?
The first item used to be a wristwatch, which was chosen from the eBay auction website. The auction format used was the auction-style listing.
Did the item sell at a higher or lower price for the winning bidder than similarly priced items on the site?
The wristwatch was sold at AU $ 5.50. Some items on the site were sold as expensive as AU $ 15.70 whereas, others were sold as cheap as AU $ 2.99. Therefore, the wristwatch was sold at a price between the most expensive and the cheapest items sold by the auction site.
What tools do you have available as a consumer to determine price/value?
As a consumer, one should look at the item specifications provided on the site while determining the price and value of the item. Also, eBay provides the product page that is aligned with tools like the value box, where product prices of all sellers are determined.
How much did the winning bidder pay?
The winning bidder paid AU $ 5.50 for the wristwatch.
How many bidders participated in the auction during the time you observed it, did they change & could they use automated bidding, if so could you tell it was being used?
Five bidders participated in the auction and who placed 9 bids. Among the bidders, some used automated bidding. In this case, the eBay company placed three automated bids.
What features does each website use to protect both the buyer & seller from fraud?
The issue of security is critical in online auctioning. In respect to the eBay auction site, the eBay toolbar allows customers to download accounts’ guards to protect their accounts and passwords. Besides, the toolbar has a feature that alerts customers on whether they are logged into the legitimate eBay website every time they visit the site. It helps customers to identify fake sites resembling the eBay site. Another powerful feature installed in eBay auction sites is the virtual feedback tool.
This feature enables online buyers and sellers in creating a centralized feedback system that is independent of the site. The virtual feedback site provides a platform for effective communication that allows users to rate each other appropriately. It enables potential buyers to make a firm decision before engaging in a bidding process (eBay Inc, 2012).
Quibids.com
What type of auction format was used, and what item did you choose to follow?
The second item was the Kata Ex-07 camera case, which was selected from the Quibids auction website.
Did the item sell at a higher or lower price for the winning bidder than similarly priced items on the site?
The item was sold at $ 1.25. Notably, other similar items sold by the auction site went for between $ 0.02 to $ 1.62. Thus, the item was sold at a price between the most expensive and the cheapest ever sold.
What tools do you have available as a consumer to determine price/value?
As a consumer, one needs to look at the features of the product to determine its value and worthiness. Additionally, QuiBids provides the product page that is aligned with tools like the value box where product prices of all sellers are determined (QuiBids.com, 2012).
How much did the winning bidder pay?
For this item, the winning bidder paid $ 1.25 plus the $ 2.40 bids credit. Thus, a total of $ 3.65 was paid for the item. The winner saved about 85% of the value price, which was placed at $ 24.99.
How many bidders participated in the auction during the time you observed it, did they change & could they use automated bidding, if so could you tell it was being used?
Three bidders participated in the auction for this item. The three bidders changed their bids because there was a total of 9 bids. In penny auctions, automatic bidding does not exist. Penny auction does not give room where a bidder can set a maximum bid and await automation bidding until one is outbid.
What features does each website use to protect both the buyer & seller from fraud?
Just like eBay websites, Quibids websites are also prone to fraud. However, fraud, in this case, is attributed to the website managers. Investigations regarding Quibids.com have proved that the site has proper guidelines that evaluate the bidding process. It ensures that the users of the site are treated where their needs are fulfilled.
References
eBay Inc. (2012). Fashion Lady Girl Perfect Wrist watch Xmas Gift D1W. Web.
QuiBids.com. (2012). Kata EX-07 Camera Carrying Case. Web.
EBay Incorporated was founded on 1995 with its head office located in California. eBay Inc. and its subsidiaries is an online business that provides its customer a marketplace for buying and selling goods, communication and other transaction between businesses located in USA and internationally. It is an online commerce that enables the two businesses to interact with one another. It provides fast transaction between individuals, and businesses.
Discussion
Ethical Consideration
There is an ethics in a company’s financial reports when it is communicated with other people, employees, stockholders, and creditors. We can say it is communicated when it is known by concerned people in the company. It makes people feel valued and important in the company. It helps them know the implication and may be able to help in the success of the business.
EBay’s financial reports footnotes show that there would be a loss on the reported profit if they accounted the employees a stock option plan in a fair value method. However, they did not provide this project. Considerably, the stock option plan provides the employees a chance to partly owned the company and be among the stockholders. It motivates the employees to work on their best in the company because it makes them cared a lot on the company. It also preserves those talented and deserving employees to stay in the company. Thus, it helps a lot in the company growth. With a loss of small amount in the profit, it can gain a lot more.
Financial Consideration
However, financial consideration is given to the stock option plan. The stockholder thought it would be best not to approve the proposed stock option plan of eBay. They observed that most of the employees are just sitting down. Also, they believe it will not benefit the company regarding with the return of the investment. Furthermore, stockholders consider that an excessive compensation to the employees may harm the return of stockholder’s equity. Stockholders fear that if they add value by giving employees the stock option plan, it dilutes the value of existing shares owned by the investors. Stockholders of eBay defend that they already giving compensation to the employees well and it is justifiable.
Meg Whitman Joins the Growing Trend
If Meg Whitman joins the growing trend of other companies in switching to the fair market value method of accounting for employee stock options, then she is making the right decision. Inflation is more possible to happen than deflation. Most of the companies experienced an increase in the value of money and other resources. Also, individuals happened to be affected on the inflation. Prices of commodities are increasing but the value of money stays the same.
The purchasing power of monetary value declined. Therefore, to meet the increasing needs, the income of an employee must increase as well. On the other hand, company needs to be updated on the value of their compensation on their employees. By using the fair value method, employees receive their salary and other compensation in an actual value or market price of their services to the company.
If eBay would not approve the proposals regarding the use of fair value in stock option plans for their employees, then they might experience a loss also. Employees would not be motivated to work on their best and attained their goals. The customers would experience low quality of services due to uninterested employees. This may result to the decrease of the company’s income. Worst, their employees might decide to transfer to another company. Thus, eBay might lose their talented staff that contributed greatly to the success of the company.
However, if they would not be approved using the fair value method, then the stockholders would benefit more on these. The value of their shares increases and would not be diluted. The profits might stay the same, providing the staff would not leave the company. If the profit is high, then the dividends that will receive by each stockholder are also high. Therefore, they would be the one who will become richer. They would be enjoying the great returns of their investment in the company.
If we will take a closer look on this, these investors, the stockholders are belonging to the higher society. They are rich enough to buy those stocks. To be fair, they invest in the company hoping to receive higher returns in their investments. In result, stockholders wanted to be richer than ever. They do not experience the real life faced by their employees.
Conclusion
Meg Whitman should change the accounting regarding the stock option plan for their employees. The company should feel that employees’ loyalty is of greater risk than the stock price. If the employees feel that they are not well compensated, then they would find another place in the other company. eBay must foresee what would happen if they would lose their talented employees. These employees have great contribution to the company. Without them, the company might experienced and prone to decrease of income. It is important that both the company and its employees are growing and achieving success.
References:
EBay Company Profile.(2009). Web.
Bradshaw, M. (2001). eBay,Inc:Stock Option Plans (A). Web.
Kopytoff, V. (2004). EBay Staff Sitting Pretty. Web.
Davis, J. (2009). eBay Seeks OK To Exchange Employees’ Underwater Options for Restricted Stock. Web.
Companies have attempted to analyze and invent global commercial approaches through the presentation of various ideas. There exist a unique connection between organizational arrangements and competition in the universal arena. An examination of the domestic potential of an organization to generate competitive gains has also been done. The solution to an effective global strategy lies in the suitable construction and supervision of an organizational universal value chain. Most often than not, divergent requirements of universal integration against regional reactions are scrutinized (Wit and Meyer, 2010).
Online market auction has been the core competency of eBay. It specializes in initiating and recovering equipment that enhances information flow through the buyers and sellers a safe. eBay users engaging in assorted types of products are authorized to generate innovations base on the equipment provided. However, success has been attributed to various activities for instance technical know-how, reliability and improved rapport with client and supplier relationships. Besides, the company has further assured inventory and broadened the distinguished competencies for the products. eBay has helped businesses to link with other partners, therefore, selling products that would be less worth to them (Joyner, 2005 ). A firm with out-of-date products is most likely to sell them at a lower value as compared to a company that could sell the same products at a higher value on eBay, for instance, 70 cents to the dollar against 15 cents to the dollar.
The value of eBay is very inclined. It offers the necessary infrastructures for trouble-free business. Even though major technologies are consolidated, it is necessary to carry out business in local exchange as demanded by the need to keep consignment of products within the locality. It has centralized expertise for international coordination and decentralized constructions for transportation currencies and regional languages. On the other hand, there is a needs that eBay use local words to illustrate merchandise. In effect, these massive subsidiaries have been built up for autonomous states.
The majority of eBay’s value is virtual. Furthermore, the main objective is to generate virtual sites for trade. The idea behind eBay is to coordinate virtual contact among traders and their clients. The company has by no means dealt with any or part of the merchandise it sells. As earlier mentioned in this essay, eBay strives to raise a perfectly protected society through which consumers and buyers can trade in various physical commodities. eBay’s role in the process is basically to stimulate, preserve, and strengthen the virtual ties created by users that lead to the real exchange of goods. Each chain is based on the description of a company’s merchandise. eBay has allowed companies to operate globally with a lot of ease without necessarily having physical contacts with their clients (Perry, 2009).
eBay’s basic strategy has remained the same in the previous ten years. However, changes have been observed in the degree to which the strategy is executed. This is attributed to the fact that eBay has a comprehensive existence within the major market and the United States. Furthermore, the company has expanded its functions to accommodate other nations. No considerable transformations have been observed on the company’s spirited gain and the measures are taken to establish and guard those gains. In contrast, eBay leads to the development of new global industries that helps in improving business (Trites et al, 2005).
Local and universal growth is the core challenge experienced by eBay. This has been caused by the anxiety to react to regional settings by simplifying things for users while in their native countries and developing a centralized universal market. Therefore there exist need to invent various tools that would enable traders in one nation to easily access consumer in several other nations. This would include creating translation programs and polished payment structures that would enhance easy currency transactions between buyers and sellers. Another major challenge is working in a scenario of diverse government policies across nations. eBay has invested in setting regulations to its site for actions that breach regional policies and substituted with disclaimers and depend entirely on its traders to stand for regional policies. eBay will still have to deal with additional offensive matters (McGee, 2004). Mc Gee looks at one incident where a man infected with AIDS registered his remains, and another person attempted to auction fetus. Another person who was certainly not known presents a couple of hundreds of pounds for illegal drugs. Many clients on the other hand are unfamiliar with available delivery services neither do they understand the tracking systems (Kanfeld & Harver, 2005).
The dynamic feature of technologies and policies has resulted in an increment of the international organizational environment which has also brought with it a better variety of industries and schemes. The prospective business arena is anticipated to be densely colonized by a diversity of organizations ranging from organizations that trade regionally and globally as well as organizations that trade in fewer as well as others that trade in more countries. Possible projections into the future are also federal firms alongside associations of firms.
References
Joyner, A. (2005). The eBay Millionaire: Titanium Powersellers Secrets for Building a Big Online Businesses. John Willey and Sons Inc. Hoboken. New Jersey
Kanfeld, J. and Harvey, T. (2005). Developing eBay business for dummies. Willey Publishing Inc. Indianapolis, Indiana.
Mc Gee, K. (2004). Heads Up: How to Anticipate Business Surprises and Seize Opportunities first. Gartner Inc. USA.
Perry, B. (2009). CIMA Learning Systems Enterprise Operations. CIMA Publishers. Burlington, USA.
Trites, G., Boritz, J., & Pugshy, D. (2005). E-Business: A Canadian Perspective for a Networked World. Pearson Education, Canada.
Wit, B. & Meyer, R. (2010). Strategy: Process, Content, Context, An International Perspective. Cengage Learning. USA.
Digital business is the process of reinventing business models and transforming an organization’s goods and customer experiences through digital technology. The key trends in digital business are cyber security and the democratization of AI. Based on this, eBay has been active in ensuring that it becomes secure from a cyber-attack. The corporation is also using AI to perform its operations effectively. Therefore, being a digital business gives eBay the advantage to expand its operations across the globe.
Blockchain, hidden revenue generation, and ad-supported models are examples of emerging digital business models. A hidden revenue generation model is when an organization does not charge users for the services offered. For example, Google uses this technique to attract more people. The blockchain business model is decentralized, promotes peer-to-peer transactions, and aids in creating a trustworthy network. EBay is currently using the ad-supported model to achieve its objectives.
Collaborative relationships and strategic alliances are some of the strategies used by organizations to improve their performance. It involves two or more people working together to achieve mutual goals. On the other hand, a strategic alliance is a collaboration between two or more companies that allows each to achieve particular strategic goals that neither would achieve on their own. For example, eBay engages in strategic alliances with other organizations to improve its service delivery.
E-commerce is buying and selling products through the internet. The main principles of e-commerce focus on digital contact channels, building digital transparency, self-service, and measuring customer service. EBay, like an e-commerce business, is using these principles to improve its operations on the internet. For instance, they use feedback from customers to measure their customer service. Thus, e-commerce principles help an organization achieve its objectives in a digital business.
Introduction
Today, every business requires digital technology to perform its operations effectively. Digital technology helps contemporary businesses to achieve the intended efficiency. EBay is one of the e-commerce businesses that depend on technology to function. It is a multinational corporation based in the US that promotes consumer-to-consumer and business-to-consumer sales. EBay exist to promote economic opportunity for individuals, entrepreneur, businesses and organizations of all sizes. The corporation was established in 1995 by Pierre Omidyar and became a success story. Since its inception, the organization has grown tremendously by expanding its market base across the globe. The corporation has effectively attracted buyers and sellers across the globe due to its excellent services. In addition, the corporation has an interactive platform owing to the adoption of technologies such as AI.
EBay has effectively expanded as a multinational company and now operates in countries outside the US. Currently, it links millions of buyers and sellers in more than 190 markets across the globe. This means that eBay operates in more than 190 countries. In addition, the corporation has more than 154 million active buyers and 19 million active sellers globally. The cornerstone of its growth and customer loyalty over the past 25 years has been innovation and technological advancement. For instance, in 2020, the corporation reported revenue of more than $10 billion, an 18.93% increase from 2019. One of the reasons for this performance is the formation of strategic alliances with leading corporations across the globe. Therefore, eBay is using digital technology to meet the needs of its customers across the globe.
Overview of Key Trends and Advantages
Definition of Digital Business
Digital business is a business that mainly depends on technology to achieve value for its target customers. In other words, it is the process of reimagining business models and transforming an organization’s products and customer experiences through digital technology (VendrellHerrero et al., 2018). It also entails inventing products and connecting people to objects, insights, and experiences to create new value. The business is made up of digital-based brands that transform their operations using technology. As a result, digital business depends on technology to improve operations and perform effectively.
Advantages of Digital Business
A digital business can easily expand to the international market because of globalization. While some organizations may find international expansion difficult, worldwide expansion becomes much easier for a digital business because of the internet domain, which allows anyone in the world to access the business (Schallmo & Daniel, 2018). In addition, a corporation that does not have a physical presence can also integrate new staff from anywhere globally. For example, the company does not need to set up a physical office to operate in a given region. Since capital for running an office and warehouse is one of the barriers for most organizations going global, a digital business can operate without these resources (Buchanan & McCalman, 2018). As a result, a digital business can have clients across the globe depending on the product they provide.
Another advantage of digital business is improved employee satisfaction, which eventually promote productivity. Employees who work from home tend to be happier because they are close to the family and can attend to some of their needs (Schallmo & Daniel, 2018). Furthermore, working from home saves employees from the stress of working in offices. It can be stressful for an employee to work where their employers can come and check the progress. As a result, remote working enables individuals to work at their own pace without fear of being watched by their supervisors and managers (Ancarani & Di Mauro, 2018). Therefore, a satisfied employee is more likely to work hard to achieve the set goals.
Key Trends in Digital Business
One of the trends in digital business is refocusing on cybersecurity. In a world where everything is on the internet, ensuring that data remains safe is one of the biggest challenges of cyber security. Digital businesses across the globe are constantly facing the threat of cyber-attack (Harari, 2018). Hackers often increase their effort and change strategy to breach networks and systems. Based on this, digital organizations are refocusing on the most basic and important steps to increase security. As part of risk management, organizations now have chief information security officers to achieve cyber security hygiene.
The other trend in virtual business is the democratization of artificial intelligence. This process can accelerate digital transformation in an organization. Democratization AI increases accessibility to every business and everyone within that organization (Harari, 2018). When people access the AI system, more innovations are bound to emerge. This trend involves using AI tools to identify trends, make decisions, forecast, learn and improve. Every organization, from tech-savvy start-ups to large ones, is currently trying to integrate AI into its systems and operations. Therefore, the adoption of AI is increasing to promote efficiency.
Application to Using Digital Business with Advantages and Key Trends Applied
EBay uses AI to transform its operations and improve service delivery to its clients. The corporation deployed computer-vision technology in its system to transform online shopping (EBay, 2021). It launched an image-scanning tool on its app, beginning with trading cards that sellers can scan with their smartphones to auto-populate and improve listings. During the pandemic, the corporation has effectively used computer vision detection and classification models on items such as hand sanitizers to determine listings with inflated prices and products that make false health claims (EBay, 2021). Therefore, the corporation is using AI to improve its operations.
New and Emerging Digital Business Models
Emerging Digital Business Models
The emerging digital business models are the blockchain business model, Hidden revenue generation model, and Ad-supported model. A hidden revenue generation model is where an organization makes money, and the people that use it are unaware (Cuofano, 2021). A good example of corporations using this model is Google and Facebook. An ad-supported model is where a business publishes free content that drives many users to their site. Google uses this type of model to attract more users. The blockchain business model is distributed and enhance peer-to-peer operations and assist in creating a trusted system. As a result, most corporations adopt this type of model to improve their efficiency.
Discussion of The Emerging Digital Business Model
The ad-supported model is becoming attractive to digital businesses across the globe. In this model, an organization bring commercial information to internet users. However, security and ethical issues have become the main issues affecting online advertising (Cuofano, 2021). A cyber-attacker can create different forms of fraud to obtain money for advertisers. Ethics is also an issue that can affect the reputation of the advertisers because of the types of content being advertised. Most businesses focus more on the money they obtain and do not bother to investigate their advertising businesses (Nwaiwu, 2018). Therefore, it has been a challenge for most businesses to choose between money and morality.
The blockchain business model is decentralized and peer-to-peer transactions within a trusted and reliable network. The immutable record of data is a feature that makes this model secure from attackers. The security of data in the blocks is achieved through cryptography (Cuofano, 2021). This means that the model is automated and secure to transfer data from one user to another effectively. Although the model is secure, privacy is a problem, and users must be trustable. The users can see all the transactions of another (Cuofano, 2021). The model was designed to enhance transparency between users within the block. As a result, it helps an organization effectively protect its data and build a positive relationship with customers.
A hidden revenue generation model is used by organizations that do not charge users for the services offered. The model is founded on the idea of keeping an organization’s consumers and income separate (Cuofano, 2021). In this manner, the company focuses on the products or services it provides to its clients to gain the greatest benefits from their engagement. However, cyber security in this model is daunting because of the high traffic of users. The users must be informed constantly on how to protect their data (Cuofano, 2021). In addition, the model must ensure that clients’ data are safeguarded based on ethics. Therefore, this model majors more on the relationship between businesses and customers.
EBay is using an ad-supported model to increase seller listing of products. In 2017, the corporation shifted from a third-party advertising strategy to a first-party done on their platform. As a result, the company and its sellers can use first-party marketing, such as promoted listings, to attract more customers to their greatest items. This non-cannibalistic style of advertising directs more traffic to certain listings or special events selected by the seller or brand while keeping the customer on the eBay platform (EBay, 2021). In addition, EBay’s promoted listings service is unique in the business in that it is based on a Cost Per Sale approach, which means the seller only pays for the ad if it results in a sale.
The Impact of New Collaborative Relationships and Strategic Alliances
Collaborative relationships involve two or more people working together to achieve mutual goals. Collaboration has emerged as a favored method of dealing with diverse individuals or organizations with opposing viewpoints (Richardson et al., 2019). It compels each party to assess what is required and what resources will be required and immediately establishes a collaborative relationship where both parties are incentivized to fulfil all milestones and deadlines. Organizations normally use it to expand their operation to new markets. For example, an organization can collaborate with another one to promote its products (Richardson et al., 2019). As a result, cooperation is a difficult process that sometimes requires people to learn to listen and communicate in ways they would not typically do.
A strategic alliance in business is a partnership between two or more organizations that allows each to attain certain strategic goals that none could achieve on their own (Gundolf et al., 2018). It is an agreement between two independent business companies to pool resources to achieve a common purpose. The strategic partners maintain their autonomy and unique identities, share the partnership’s benefits and governance, and continue to participate until it is ended. Strategic alliances are frequently created in the global marketplace by businesses situated in different parts of the world (Gundolf et al., 2018). The main drive of these alliances is to create a win-win situation. Therefore, all the partners in a strategic alliance stand to gain.
Advantages and Disadvantages
There are various advantages and disadvantages of new collaborative relationships. This relationship helps enhance business performance. When organizations work together, they can share information that can boost performance (Richardson et al., 2019). Collaboration leads to idea generation and the development of new approaches to achieve key tasks. It also helps improve the efficiency of operations because each party comes with their strengths. However, a collaborative relationship can lead to slow decision-making because many parties are involved in the process (Richardson et al., 2019). The relationship can also result in conflict due to disagreements among the parties. Therefore, it is important to understand its advantages and disadvantages when entering this relationship.
Strategic alliances also have advantages and disadvantages that businesses might experience. The alliance is an efficient way for digital businesses to expand globally and enter new markets (Gundolf et al., 2018). It enables a business to increase its sales and expand by forming alliances with other organizations. In addition, when two organizations come together, they create innovative products which help to increase their productivity. Strategic alliances with leading organizations improve the image of an organization in the market. However, the risk of conflict increases when two organizations of different cultures come together to work on a project (Gundolf et al., 2018). Although strategic alliance can benefit the organization, it also has some disadvantages.
EBay has continuously used strategic alliances to improve its operations in the market. The latest strategic alliance is between eBay and bidadoo, which improves performance. The alliance will combine EBay’s proven platform and worldwide reach with bidadoo’s unique capabilities and experience (Hayes, 2021). eBay and bidadoo will address customers’ demands through this alliance by utilizing technology, data, and expertise to create industry-leading, end-to-end solutions and value. bidadoo delivers specific expertise in the Heavy Equipment sector and the ability to provide customers with a high level of confidence and certainty. Thus, both parties involved in the alliance stand a chance to benefit.
The corporation also partnered with ChannelAdvisor to increase its performance. ChannelAdvisor is a leading provider of cloud-based e-commerce solutions that allow retailers and branded businesses to increase their sales (Business Wire, 2017). The strategic alliance between the two organizations enables them jointly adopt initiatives to enhance growth. In this alliance, the two organizations are supposed to engage in beneficial approaches to all. Based on this, strategic alliances are usually formed with a common objective. The partners are supposed to work together to help attain the goals (Business Wire, 2017). The strategic alliance help the parties improve their performance in operation.
How eBay Can Use E-Commerce Principles
E-commerce is a business model that enables an organization and individual to purchase and sell products through the internet. To put it differently, it is the act of buying and selling items via electronic devices such as mobile applications as well as the internet (Singh et al., 2018). It is a huge part of the economy, and it is crucial for companies that sell items online. Compared to traditional retail, e-commerce allows businesses to reach a bigger number of customers. Due to the high number of individuals who shop online, e-commerce is the fastest-growing retail market (Cai et al., 2018). As the number of online users increases, the model experience more traffic, which is integral for its performance. Therefore, e-commerce is a new model being adopted by organizations across the globe.
The first principle of e-commerce is to focus on digital contact channels. Online communication is an important tool in the effective performance of a digital business. In a digital domain, digital channels generate better outcomes (Kelsey, 2018). A digital business should major in using features such as live chats and chatbots. Many corporations use live chat to allow their customer-facing workforce to communicate with customers or prospects in a direct and timely manner. On the other hand, a chatbot uses text messages to imitate human-like discussions with users (Kelsey, 2018). With these technologies, a digital business can communicate with a client.
The second principle of e-commerce is building digital transparency. The world has become far more transparent as a result of digitalization. This is a positive thing in customer service that digital businesses should adopt (Kelsey, 2018). It is now much easy to keep customers informed. Transparency is providing customers with complete access to their order history and progress. It also entails keeping them informed if a problem takes longer than expected to resolve. This removes ambiguity, makes delays more manageable, and prevents unnecessary help calls (Kelsey, 2018). Because digitization has made a plethora of tools available, it stands to reason that they should be used to improve customer service encounters.
The third principle is to allow self-service rather than rush to serve them. It is important to allow customers to navigate the website page without offering help unless they need one. Before purchasing a product, most individuals perform online research (Kelsey, 2018). As a result, customers usually go for self-service options to solve their problems before asking for any help. Instead of communicating with customers, they prefer to solve problems for themselves online, whether through a FAQ page or other means available. With this strategy, a customer can explore and learn more about the company (Kelsey, 2018). Thus, this principle is crucial because it allows customers to take their time before purchasing a product.
The fourth principle for a digital business is to measure customer service. One of the best aspects of online business is significantly more measurable than the conventional business model (Kelsey, 2018). Because all online actions leave digital fingerprints, it is possible to understand client behaviors and actions better. Customer feedback can also help an organization better measure the quality of its customer service. For feedback to be valuable, it should be offered when the encounters are still fresh in the customers’ minds (Kelsey, 2018). Customers will also be more eager to provide feedback if it does not necessitate any additional effort. Therefore, customer feedback enables an organization to understand the strengths and weaknesses in their customer service.
EBay uses various e-commerce principles to make its online operations effective. The corporation has a customized contact section that promotes digital communication with clients across the globe. The contact us part is divided into various areas, and a client has to choose the area they want to seek help from (EBay, 2021). The corporation also uses the principle of self-service, where buyers and sellers are allowed to navigate the webpage. The clients are free to check any information, including the stories, and decide whether they want to transact through the platform or not. In addition, eBay makes all the information available to interested parties on the website (EBay, 2021). The main aim is to promote transparency, which is integral in building positive relationships.
Conclusion
The success of EBay is linked with the benefits that come with digital business, strategic alliances, adoption of e-commerce principles. The corporation provides a platform where buyers and sellers meet to exchange products. Currently, the corporation links millions of buyers and sellers in various markets across the globe. The expansion was due to its attribute of being a digital business. It reported a revenue of $10 billion in 2020 business of its effective customer service. Its success can be linked with adopting an ad-supported model to increase seller listing of products. The corporation shifted from a third-party advertising strategy to a first-party done on their platform. This enabled the corporation to generate more income from advertisers. The success of the organization is due to the adoption of e-commerce principles. EBay has also experienced the benefits of forming strategic alliances. The corporation has formed strategic alliances with various organizations to improve its operations.
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Technological advancements have led to increased opportunities and the need for courier services. Organizations such as eBay and Alibaba are dependent on third parties for the delivery of their products to their clients. Although eBay positions itself as a reliable e-commerce company that meets its client’s needs, it lacks a delivery service. Therefore, many eBay clients face problems with the delivery of their ordered products. Deliveroo, having an outstanding reputation, can take advantage of the available business opportunity by selling its delivery services to eBay users.
Brand Overview
Deliveroo is one of the earliest food delivery companies that operate in European and Arab countries. The organization was founded in 2013 by Will Shu and Greg Orlowski (Zuev, Psarikidou, and Popan, 2021). Currently, Deliveroo operates in the UK, France, Belgium, Ireland, Italy, Singapore, Hong Kong, the United Arab Emirates, and Kuwait (Poelman, Thornton, and Zenk, 2020). The firm called off its operations in Germany, Taiwan, Spain, the Netherlands, and Australia due to stiff competition and internal mismanagement.
Deliveroo’s business model is platform-to-consumer since it provides delivery services to various restaurants in its countries of operation. The firm has partnered with about 160, 000 local restaurants in more than 100 cities, offering delivery services (Stallkamp and Schotter, 2019). Deliveroo has avoided the risks that come with the restaurant business, making it flexible in offering delivery services for other products (Veen, Barratt, and Goods, 2019). Its cordial relationship with the partner restaurants has led to the acquisition of more restaurants increasing the number of cities of operations as shown in figure 1.0.
Organizations can adopt either a horizontal or vertical business structure to meet their objectives. The vertical organizational structure involves a pyramid-like management structure lwith each level having a clearly defined role (Krajewski, DellaPosta, and Felmlee, 2022). Meanwhile, in the horizontal organizational structure, there is no clear definition of the roles played by different stakeholders. Deliveroo has a vertical organizational structure, and key decisions are made by the top management (Mellist, 2021). The vertical organizational structure is beneficial to Deliveroo since there is clear communication and maximum employee output.
Current Trends in Delivery Industry
Technological advancements have revolutionized the food delivery industry, making it more competitive. The integration of smart technologies has automated customer requests and payment methods (Shang and Chiu, 2022). For instance, the integration of automatic payment methods has made it easy for the delivery companies such as Deliveroo effectively charge their customers (Timko and van Melik, 2021). Furthermore, increasing environmental concerns in the transport industry have made some food delivery companies adopt green energy and transport services (Meneghetti, Dal Magro, and Romagnoli, 2021). While environmental and technological trends seem to make the industry better, the companies will have to increase their investment capital.
Market Analysis
SWOT Analysis
Analyzing the strengths, weaknesses, opportunities, and threats of Deliveroo can help determine its brand positioning. Delveroo’s strengths include a broad consumer base and the integration of technology into its activities (Woodcock and Cant, 2022). The company has more than 160,000 restaurants making it sustainable in the current tech-driven generation (Pang, Shang, and Song, 2022). Additionally, Deliveroo has a dependable management structure which is key in decision-making and mitigating business risks (Rogers-Cooper, 2021). The firm’s weaknesses include stiff competition from companies such as Dominos, Just Eat, and Uber Eats. Competitors such as Uber Eats have a wider consumer base, thus, more profits than Deliveroo.
The greatest opportunity that the company can exploit is the absence of effective delivery services for e-commerce platforms supporting consumer-to-consumer transactions. Moreover, the organization’s possibility of breaking even makes it attractive to the partnership with eBay users (Rogers-Cooper, 2021). Furthermore, increasing the use of eBay for buying and selling services can be exploited (El-Ebiary and Al 2021). The major threats facing Deliveroo are the new entrants, stiff competition, and the decision by major restaurants and e-commerce service providers to establish their delivery systems (Alvarez-Palau et al., 2021). Deliveroo should maximizing on its strengths and available opportunities to remain sustainable.
Competitors’ Evaluation
Deliveroo competes with various cowponies that offer delivery services in the food industry. However, its main competitors are Uber Eats, Just Eat, and Dominos (Chen McCain et al., 2021). The competitors have various advantages compared to Deliveroo. For instance, Uber Eats has partnered with mega restaurants such as KFC to deliver service (Nellist, 2021). Additionally, the company offers other transport services besides food delivery. Furthermore, the competitors have broader consumer base since they operate in more countries than Deliveroo (Chen McCain et al., 2021). Deliveroo’s competitors seem to be more sustainable than the company due to increased sources of income.
Although the competitors have a competitive edge, Deliveroo differentiates itself from the competitors by offering services to specifically Western and Arab countries. The firm’s countries of operations have rapid technological developments. The countries are also first-world, making the business more sustainable and profitable. Moreover, Deliveroo, in its service offering, positions itself as a unique brand whose primary focus is on the end customer. Deliveroo makes its decision based on its clients’ preferences (Rogers-Cooper, 2021). Therefore, its consumer base is more loyal than that of its competitors. Consequently, the company has progressively dominated the food delivery market share as shown in figure 2.0.
Opportunity Identified
Service Proposition
Although Deliveroo is profitable, the introduction of a new service will make the business more sustainable and competitive in the market. The company’s competitors have diversified their service category, making them more profitable than Deliveroo. The introduction of a courier service will make Deliveroo more dependable by its consumer. The courier service will target consumers who purchase their products through eBay e-commerce eBay. Since eBay has a consumer-to-consumer model, the riders will take items from the sellers and deliver them to the buyers. Additionally, for international transactions, Deliveroo will play the role of taking an item from the seller and delivering it to the buyers through various modes of transportation. Deliveroo will help eBay customers avoid the tussle of constant communication with the sellers, for the delivery update. Additionally, the buyers will be helped avoid the challenges associated with customs clearance.
Current Sales Force Structure
Deliveroo has an efficient, adaptive, and effective sales force structure. Currently, the organization has an established consumer base that is loyal to the brand (Henderikx and Stoffers, 2022). Additionally, the consumer base utilizes e-commerce platforms to make online purchases such as electronics and other home items (Muszyński, Pulignano, and Marà, 2022). Deliveroo operates in developed countries in Europe, making it easy to adopt new services line (Henderikx and Stoffers, 2022). The new business venture will involve different levels of logistics structure. The targeted customers order items from other consumers within and without Europe.
A geography-based sales force structure will be significant for the new venture. The approach will allow marketing and sales activities to be carried out based on the buyers’ geographical locations (Bals and Turkulainen, 2021). The organization will recruit logistics officers in different countries, specializing to handle various products. Deliveroo’s sales force structure will include personnel such as global logistics officers, country-based logistics officers, and city-based ones. Meanwhile, the products will be categorized into three types: bulk, fragile, and non-fragile, each attracting particular delivery costs. For the customers, Deliveroo can categorize them as either impulse or loyal customer. While impulse clients are those who rarely make delivery requests, the loyal are the ones who will use the new service frequently. The sales personnel will work to convert impulse customers into loyal ones.
Key Opportunities for the Courier Service
Deliveroo has various opportunities for the establishment of the courier service. However, the three key opportunities are the availability of a broad consumer base, excellent brand reputation, and advanced technology. Deliveroo operates in many countries and has partnered with about 160, 000 restaurants (Bivona, 2022). The organization can easily influence the clients into using its new courier services. Deliveroo is a UK-based company with a brand reputation of excellence. The firm, since its foundation, has recorded increasing profits, therefore, it will be easy to attract buyers and partner companies (Cini, Maccarrone, and Tassinari, 2021).
Deliveroo has prioritized technological integration into its activities, making it ready for changing societal needs. The company’s advanced technology offers an opportunity to expand the market and its service line without hurdles (Allam et al., 2022). Deliveroo should exploit the available opportunities in the adoption of courier services.
Potential Buyer Organization: eBay
Profile and Decision-Making
eBay is one of the most successful multinational e-commerce companies. The corporation has American origin and attracts millions of customers from different parts of the world (Dang et al., 2022). eBay has an e-commerce platform that connects sellers with potential buyers. Through eBay, individuals can sell brand-new and second-hand items (Quinn et al., 2022). The platform has no restrictions on specific products to be sold. Consequently, one can purchase items ranging from machines, and electronics, to home furniture over the platform. eBay integrates B2B, business-to-consumer, and consumer-to-consumer business models.
The new business venture will target eBay users who have problems with delivering products ordered through eBay.The target buyer of the new Deliveroo courier services will be a person working at eBay, who has challenges in delivering the products to their customers. The buyer will need to have worked with eBay for more than five years. Additionally, the buyer will need to have established a good business rapport with other eBay users. Furthermore, the buyer of the new product will require to have a broad-consumer base within the UK, and with constant delivery orders.
Sales Team Recommendations
Roles
The Deliveroo sales team will play a significant role in the marketing of the new service. The team is headed by a sales manager who reports to the company’s manager (Deliveroo, 2022). Additionally, the team has sales trainers who routinely educate the existing sales’ department (TalentLMS, n.d.). The existing sales team takes up the role of advertising the new service to its potential buyers (Woodcock and Cant, 2022). The roles of the sales team will include advertising the new service to potential buyers who use eBay. Additionally, the sales team will be responsible for promoting Deliveroo’s brand reputation to various eBay users. The promotional activities will include providing brochures and posters that explain how one can order delivery services using the new Deliveroo app for eBay.
Recruitment
Although the Deliveroo sales team can take up the promotional role, the company will have to recruit additional members to explore the new business opportunity in the new countries. Recruiting productive salespersons will greatly enhance the profitability of the new business venture (Kaufmann and Kock, 2022). The company will need to recruit individuals who understand Deliveroo’s internal operations and are competent in delivery services. The Boomerang method will help the organization hire past employees who are productive and understand Deliveroo operations (Keller et al., 2020). Meanwhile, the direct advertising method will be crucial for the recruitment of new talents in new areas of operations. The Boomerang and direct advertising are recruitment methods crucial for the new venture.
Training Needed and Remuneration
The recruited salespersons will be subjected to training to gain digital marketing skills. The team will be trained on emotional intelligence skills that will help them effectively interact with the clients over the company’s platform. Moreover, the team will be subjected to marketing ethics to protect the reputation of Deliveroo. Marketing ethics are crucial for client retention and attraction of more potential ones (Bhagia, 2022). The employee performance appraisal approach will be adopted to measure the recruited individual’s productivity.
Each of the employees will have set objectives that they have to achieve after every three months. Their performance will be compared with the set objectives, and determine their retention suitability (Kusumah et al., 2021). Underperforming employees will be subjected to administrative warnings. Meanwhile, those who will excellently perform will receive incentives. Each employee will receive a monthly basic salary topped with incentives and commissions if qualified.
Conclusion
Deliveroo is one of the most successful food delivery companies operating in European and Arab countries. The company is competitive in the marketing with a record of increased profitability over the past years. Although Deliveroo is profitable, introduce courier services will make it more sustainable in the global market. The service can be sold to eBay users since the platform does not offer delivery service. The courier services will benefit eBay users and Deliveroo since they will attract more customers and meet their unique needs.
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eBay has been around for almost three decades and is now a global giant. In less than 30 years, it has transformed from a garage startup into a global giant (Baker et al., 2022). Therefore, it would be interesting to take a closer look at how eBay has turned into one of the most profitable e-commerce enterprises in the world today. A platform is an excellent tool for small and medium-sized businesses. Its goal is to empower people and create economic opportunities. A closed—loop economy in which resources are sold so they can be used for as long as possible, extracting maximum value from them and redirecting waste to landfills while reducing the need to produce new goods is a modern trend (Kaya et al., 2019). However, eBay supports it from the very beginning. The most intriguing element, in this case, is how they innovated and experimented with new products and services. Furthermore, the way they target new customers from all over the world. Moreover, how they improve the quality of customer service and expand their presence worldwide.
Product Life Cycle
The product lifecycle describes all products’ paths from development to final decline. eBay is now at the maturity stage. eBay was one of the first online markets, and they were able to capitalize on the early growth of the Internet to achieve global business success. eBay passed the development stage in 1995 when it was still called AuctionWeb (Baker et al., 2022). It was a special software to help young mothers sell their children’s used clothes. This is how the original eBay business model was born, ensuring its success. This became the stage of introduction. eBay has developed at the growth stage thanks to various strategic partnerships. For example, the founder of eBay convinced the CEO of PayPal to join eBay immediately by offering him 50% of the company (Simakov, 2020). Now that the company is mature, eBay recorded the highest quarterly revenue in the first quarter of 2021 (Baker et al., 2022). Most likely, soon, the company will not more quickly enter the decline stage, as it introduces many innovations and continues to develop.
Porter’s National Advantage
Michael Porter’s Diamond Model, also known as the National Theory of Industry Competitive Advantages, is a strategic tool companies use to identify and develop the basis of competitive advantages necessary for international growth and development. The most competitive factors for eBay are capital resources, technological innovation, and sponsorship.
The main advantages of eBay are capital resources and technological innovations. Capital resources include financial resources available on eBay (Kaya et al., 2019). Technological innovations – scientific knowledge leads to frequent innovations. The company has broad access to technological innovations that help achieve economies of scale and reduce overhead and other operating costs (Simakov, 2020). This also allows them to enter other markets with maximum profit.
Sponsorship and related industries have also significantly helped the brand reach new heights yearly. The presence of associated industries in the domestic and international markets has also been a source of eBay’s growth and development in the field of products and internationalization (Kaya et al., 2019). This is because related industries have helped eBay do business by providing the necessary supporting materials to succeed. The presence of auxiliary enterprises helps eBay to grow and develop its business. In domestic markets, support sectors have helped to create an industry, enabling companies like eBay to grow and develop their business operations, attract consumers, and increase product awareness and recognition in consumer markets.
Conclusion
eBay’s organizational structure and development, as well as vision and strategic decisions, have played an essential role in promoting the company’s international growth and development (Kaya et al., 2019). eBay’s policies and government structures have been particularly favorable in different countries. Government policy has supported eBay’s plans and expansion and growth opportunities (Kaya et al., 2019).
The Internet has brought about many changes in the consumer world. There have been various advantages that have been developed to make life easier for many people. With these advancements, it has become easier to conduct many traditional activities online. These include communication, purchases, and sending important data. The development of online companies like eBay has enabled consumers and producers to gain because it provides an online avenue for conducting business transactions.
About the site (eBay)
EBay is an online website that provides an avenue for buyers and sellers to buy and sell goods. Thus, consumers can easily get the goods and services that they want by simply going through the website and finding the deals that suit them.
It also offers an auction service where consumers can bid for the prices of various products and services. EBay as a company was founded in 1995. Its success has been attributed to the increasing use and access to the Internet. This has increased the website’s audience, making it grow fast over the years. The company operates in over 130 countries, thereby becoming a multi-billion dollar company (Collier 330).
The company is owned by Pierre Omidyar, a computer scientist. It began as a personal website, but he was forced to upgrade by his service provider. During this time it was known as AuctionWeb whereby it provided an online avenue for companies to conduct online auctions. Pierre was forced to charge users of the site because of the high traffic the site was getting during its initial days. Thus, he got the first eBay employee who handled the fees paid by users.
The company’s first president was employed in 1996, thus it signaled the evolution of the company into an online e-commerce website. In its initial days, the company was usually involved in online auctions. Thus, it was able to conduct over 2,000,000 online auctions in 1997 in comparison to 1996 whereby only 250,000 online auctions occurred. The company then began to consider business activities beyond auctions. Thus, it changed its name to eBay in 1997.
The company belonged to a consulting firm owned by Omidyar called Echo Bay Technology group. Thus, the website was to be located at the domain echobay.com, but a different company already owned the name. Omidyar then named it eBay.com, a shortened version of his consulting company (Collier 322).
Major progress for the company occurred in 2002 when it purchased PayPal. Thus, it was able to make a service that enables people to save money within PayPal and use it when making transactions. Thus, this service made it easier to securely send and receive money over the Internet for any company or individual with an email account.
EBay in e-business
EBay is a company that has witnessed increasing growth over the years. Its success is a result of the increasing use of the Internet. Thus, eBay has evolved into an e-business. This means that companies can establish shops online without necessarily having a physical structure.
Thus, all the transactions conducted within the business are depended on eBay. When a consumer wants a product, they simply log into the site and make a selection of what they require. The seller in many cases only has the goods within a warehouse facility for storage. Thus, once purchased the goods are delivered to the customer without hustles (Schwalbe 56).
EBay is a form of e-commerce where business transactions are conducted online. Thus, the website provides a platform where buyers and sellers can interact and sell their goods and services. Moreover, it provides a secure way to conduct these transactions. It also facilitates virtual communication where the customer can interact with the seller.
The use of PayPal also led to improvements in e-commerce. It became easier to conduct business online with a faster method of making transactions. Users could easily open a PayPal account, which would be tied up to their email. Thus, they could make secure transactions that were efficient and safe (Collier 210).
EBay uses an online auction or fixed price trading. Thus, a customer can choose either of the two methods to purchase the products or services they want. The bid made by the highest bidder is still shown during the entire period to allow for price discovery by potential consumers (Collier 207).
The option of negotiating for prices through an auction is an effective strategy to encourage more consumers because people are attracted to a situation where they have a wider choice to choose from. Through negotiations, people can determine the prices of the goods and services that they want and ensure they spend on a cheaper but quality product. Through eBay, people can sell products that are not necessarily new.
Thus, individuals with used products can easily sell their product through the service at a cheaper price. It also enables them to access a wider market, thus they can sell at a profitable price with ease. The customer also finds it easier to conduct transactions because it only involves the click of a mouse without movement and goods or services are then delivered to the customer (Schwalbe 38).
Website targets
EBay is an international company, thus it attracts a diverse group of people ranging from individuals to companies. It has localized websites in countries such as Europe, North America, Latin America, and Asia Pacific. The largest users of the company comprise of individuals. This is the main target audience because a wide range of transactions occurs between individuals and consumers during transactions.
Companies are also allowed to operate accounts with eBay. Thus, they can sell their goods and services to a larger consumer base without necessarily having a physical shop or requiring the consumer to visit the company’s premises.
The website also targets potential consumers with the use of advertising. Thus, it has an online classified website whereby people can meet, exchange ideas, and conduct business easily. This has facilitated the company to increase its online presence and attract more users. The online classified sites include German automobile website mobile.de, itoko, and Netherlands marketplaces.nl (Gitlin 1953).
Website services
EBay is a company that has established various services in relation to trade.. These were various websites under eBay dealing with payment, communication, and commerce. The services include PayPal, Subhub, Half.com, Rent.com, Micro Place, Media Marketplace, Shopping.com, and Kijiji.com.
Online auctioning is one of the initial services offered by eBay. This is where customers can bid for a product until an agreeable price is reached. Being online, individuals can easily bid on a product from home. Thus, it has gained popularity over the years as bidding is an effective strategy to ensure consumers get the goods and services at the best price that they can afford.
Online classified is also one of the services offered by eBay. This is conducted through various websites owned by eBay, including Gumtree and kijiji.com whereby it offers an avenue for online communities within a specific urban region to conduct trade. Thus, advertisements are placed online for a specific audience within a region.
Launched in 2005, it operates in over 300 cities worldwide. Such a service has been able to offer localized advertising whereby users can find products within their geographical regions. PayPal is also a service offered by eBay. It allows for payments and money transfers for users of eBay over the Internet. It processes payments that occur over the Internet with ease and efficiency. PayPal became eBay’s subsidiary in 2002 and operates worldwide (Collier 300).
Global spread
EBay is an international company with operations all over the world. Currently, the company has partner sites namely eBay US and eBay UK. These sites allow for the use of regional currencies for transactions. There are about 31 eBay subsidiaries globally. Many of these websites are localized, thus it encourages people within the various regions to conduct business and easily find what they need. The company, though established in the U.S., is growing twice as fast as a result of international markets.
Many countries had not been traditionally engaged in e-commerce, thus eBay was able to establish this new trend of doing business within various countries. The company has over 125 million registered users. These comprise of both individuals and companies. Thus, the company has been able to adapt a business concept into areas that are characterized by different cultures. It is also flexible where it adapts to local conditions that encourage more users to use the site (Gitlin 1954).
New additions to the website
There have been several additions to the website to facilitate an increase in the number of users and ensure ease of using the services offered by the company. One such example is the creation of a mobile application that runs on Smartphones like the iPhone and Android OS phones. Thus, many people have been able to install the eBay mobile application, which has facilitated the ease at which people can access the website.
Thus, people can easily conduct transactions or advertise their products easily by using the mobile application. Moreover, the mobile application has the ability to scan barcodes, thus it becomes easier to find online prices for a particular commodity. It also provides an interface to check on auctions as they are progressing online (Collier 336).
EBay has also established a gift cards service. This is where cards can be purchased as gifts. These cards can then be used by a user to make purchases on the website without using their own money. Moreover, eBay has a loyalty program whereby users of the website can earn points from the transactions made.
These points can increase over time and be used to make purchases on the website if sufficient. Moreover, the loyalty program can offer discounts and cashback guarantees to customers, thereby providing an attractive reason why they should conduct transactions over the website (Collier 335).
Conclusion
In conclusion, eBay has been able to grow as an online company due to the increasing use of the Internet. Moreover, it provides a way to easily conduct trade and make financial transactions securely. It is user friendly and diverse, thus many people can use the site for various activities including e-commerce, auction, classifieds, and transfer of money. This has ensured that eBay has retained its position as an important online company.
Works Cited
Collier, Marsha. EBay for Dummies. 7th edn. Hoboken, NJ: John Wiley, 2012. Print.
Gitlin, Marty. eBay: the Company and its Founder. Edina, MN: ABDO Pub., 2011. Print.
1. What is eBay’s e-business model and why has it been so successful?
The eBay uses a Consumer-to-Consumer (C2C) business model, which entails the creation of an online platform where consumers can communicate and trade anytime via the Internet. The platform brings together buyers and sellers in such a way that sellers have the opportunity to list their goods for sale and buyers to place their bids for the goods.
Both parties have the opportunity to browse through all the items on the list, which appear in different topics and categories (Baltzan, 2011). The company has solely relied on the internet to conduct its operations, presenting both buyers and sellers with a novel approach to business that guarantees security, timeliness and cost-effectiveness. This business model has enabled eBay to achieve noteworthy success in a relatively short time.
2. How has eBay’s strategy changed over the years?
Over time, eBay has adopted different strategies depending on the prevailing market conditions. When the business started its operations, it focused on marketing and sales, by developing an innovative platform where both buyers and sellers could have confidence in the system by minimizing chances of fraud, and encouraging users to police each other (Baltzan, 2011).
When the company grew in size, it changed its strategy and launched a number of sub-business ventures in an effort to add value to its customers. This strategy led eBay to purchase PayPal and Skype, which aimed to enhance payments and communications, respectively. In the recent times, eBay’s strategy focuses on building advanced infrastructure to sustain its large customer base.
3. eBay has long been an e-marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set up shop on eBay?
Initially, eBay was used as an e-marketplace for pre-owned goods and collectibles. Over time, however, the company has gained the trust and confidence of customers, and its users have increased significantly. By 2008, eBay had attracted many users and its list of registered users had hit hundreds of millions. Such a large traffic was essential for business, and it helped to attract many vendors to set shop on the site. In addition, the high level of fairness and trust helped to boost customers’ confidence in the site (Baltzan, 2011).
4. What are the three different types of online auctions and which one is eBay using?
The three different types of online auctions include electronic auction (e-auction), forward auction and reverse auction. In an e-auction, the prices of goods are determined dynamically, and both buyers and sellers solicit bids consecutively.
In a forward auction, sellers target many buyers, where the highest bidder emerges as the winner (Baltzan, 2011). In a reverse auction, a buyer aims at purchasing a product at the lowest bid. EBay uses the forward auction method, where sellers set minimum prices for their goods and the highest bidder emerges as the winner.
5. What are the different forms of online payment methods for consumers and business? How might eBay’s customers benefit from the different payment methods?
The different forms of online payment methods available for both consumers and businesses include financial cybermediary, electronic cheque, electronic bill presentment and payment (EBPP) and the digital wallet. Ebay customers are bound to benefit from these payment methods because they are cheap, convenient, fast, and secure (Baltzan, 2011).
Currently, most eBay customers use PayPal, which is one of the most commonly used financial cybermediary in the world. Most users prefer PayPal because it guarantees users a safe, fast, inexpensive and convenient way of making transactions.
6. Which metrics would you use if you were hired to assess the efficiency and effectiveness of eBay’s Web site?
To assess the efficiency of eBay, the appropriate metrics to use include revenue generated by the traffic on the site, the number of new customers joining the site, and a cutback in the number of customer service calls due to the traffic on the site. In this case, it is critical to measure interactivity and clickstream data (Baltzan, 2011).
Interactivity helps to measure effectiveness of advertising approaches adopted by counting visitor interactions associated with the advertisement. On the other hand, clickstream data help to study the exact navigation pattern associated with a specific consumer.
References
Baltzan, P. (2011). Business driven information systems. New York, NY: McGraw-Hill Education.
Ebay Corp. is one of the leading players in the world of e-commerce industry. The competition is fierce and the legal problems with PayPal and the discussions on the sales tax imposition undermine the market position of the company. Statistics shows that among the 18 major competitors in the industry, Ebay Corp. takes the 13th position in the long-term growth indicator rating. The lower indicator represents a warning signal for the investors as the company can lose its market share.
Recommendation
Ebay Corp. should increase sales by changing the terms of the commission on sales charging. I recommend reducing the commission on sales from 2% to 1% for the merchandisers collecting more than $6 000 weekly. As a result, the merchandisers will be encouraged to increase their inventory and the sales volume in order to achieve the economies of scale.
This means that the commission payable to Ebay will increase leading to the revenues increase and providing the long-term growth for the company. It is also suggested borrowing additional funds for investing in the long-term growth. The platform and mobile application development is one of the possible areas for investment.
Bases for Recommendation
The long-term growth implies the increase of the corporate profits. Profit is a difference between revenues and costs. So, we can show this relationship by the following equation: P=R-C. It will be reasonable to use the following formula: E(P=R-C)M where E represents the macroeconomic factors and M represents the market factors.
If we take a look at the current economic situation, we can characterize it by the low inflation rate (1.5% according to the recent data), the environment of the extremely low interest rates with the Fed rate at the level of 0.25%, and the unemployment rate lower than in the last years but yet substantially higher than in the period before crisis.
The macroeconomic factors put additional pressure on the profit level, thus slowing down the growth of the company. The macroeconomic instability decreases the amount of the personal disposable income putting downward pressure on the consumer demand. Thus, the maintenance of the competitive position requires the active marketing strategy.
Let’s analyze the potential benefits of the current situation. In the current economic environment, the borrowing seems to be beneficial. That is why the company can borrow additional funds at low rates without the rise of its finance costs. Taking into account the favorable borrowing conditions, it is reasonable to increase leverage and to invest additional funds in the platform development and the development of the mobile application, in particular. Besides, the advertising should be financed.
Turning to the market factors, we can mark out the following major determinants in the industry: high growth of the e-commerce, strong competition, and relatively low barriers to entry. The market factors indicate to the potential for growth of the company as well as to the threats of revenue decrease due to the competitors’ activity.
In order to achieve the long-term growth improvement, I suggest increasing sales. This can be achieved in three ways: by increasing volume, by increasing the amount of the unit of sale, or by rising prices.
Taking into account that the sales of Ebay represent the fee for putting the lot and the commission from the sale, the increase in the fee or the commission will affect the performance of the merchandisers trading at the Ebay platform. Obviously, the performance of the sellers will decrease leading to the exit of some sellers and the decrease in Ebay revenues.
The second alternative we should consider is the increase in volume. The increase in volume can be achieved by the reduction of the fee and the commission attracting the merchandisers selling on the platforms of the competitors. However, many of Ebay major competitors have their own competitive advantages. For example, Amazon.com supports price competition among merchandisers attracting more buyers and supporting the demand.
In general, the change of the trading platform implies to the sellers the loss of the part of their customers who used to buy from certain e-commerce platforms. It is highly probable that the majority of the sellers would prefer to stay with the same platform provider. Thus, the enticement of the merchandisers seems to be ineffective for the increase in sales taking into account the cost and benefits of this strategy.
The last of the suggested alternatives is the increase in the amount of each sale. The increase in the amount of each sale can be achieved by providing the reduction in the commission on sales for the high volume merchandisers encouraging them to increase their own sales. The main advantage of this option is the relatively less time needed to gain the benefits from this strategy. According to the statistical data, “users trade about $1 700 worth of goods on site every second” (“Interesting Facts” n.pag.).
The high volume merchandisers who are able to acquire additional inventory will achieve the economies of scale by selling more with the lower cost of sales. The commission payable to Ebay will increase due to the increase in the amount of each sale of the merchandiser. Let’s say, the commission is decreased from 2% to 1% on the sales amount from $6 000 to $8 000 weekly. This means that the merchandiser collecting $2 000 pays the $40 in commission whereas the seller who has increased his volume to $6 000 will pay $60 to Ebay.
In effect, the increase in the sales volume results in the increase of the revenue amount per each dollar of commission paid from $50 to $100. In this case, Ebay will earn twice more on commission from sales if the merchandisers increase their volume of sales. Therefore, the last alternative of increasing the volume of each sale seems to be the most attractive for Ebay.
In summary, the suggested strategy will result in the increase of sales of Ebay, the gain of the competitive advantage on price, the maintenance of the market share and, ultimately, the long-term growth of the company.
Assumptions, Risks, and Uncertainties
The following assumptions underlie the suggested strategy: the market is growing; the economy is at the stage of recovery; the significant rise of inflation will not occur in the nearest future; the severe economic downturn will not happen in the nearest future; the competition is strong and the substantial monopolization of the industry will not occur in the foreseeable future; the merchandisers are responsive to the commission changes.
The major risks and uncertainties are as follows: the general macroeconomic situation worsening and the industry growth stagnation. Besides, such factors as the implementation of the stricter regulation and control over the e-commerce business and the increase in the tax burden represent significant risks to Ebay.
Furthermore, the competitors may respond by cutting their fees and commissions. The number of mergers and acquisitions may increase leading to the appearance of the stronger players representing one more risk factor to the business. And last but not least, the interest rates may increase or the inflation may soar leading to the merchandiser’s inventory devaluation.
Conclusion
The analysis of the current problem of Ebay Corp. and the comparison of the strengths and weaknesses of the alternative strategies for the problem-solving allow concluding that it is advisable for the company to reduce the commission on large sales volumes in order to motivate the merchandisers to sell more.