eBay Case Study

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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.

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