Ebay is an online auction site that was founded in 2001 by Pierre Omidyar in San
ID: 419302 • Letter: E
Question
Ebay is an online auction site that was founded in 2001 by Pierre Omidyar in San Jose, California. They first targeted antique resellers and antique products. Now EBay offers millions of items to millions of people worldwide and is the largest online auction store. It started as an individual selling space and is now used by corporations and small business to sell their products. Some businesses use only Ebay to sell their range of products. They make money by charging for online listing and charge a percentage of sale value as their fee.
How does eBay attempt to keep their customers satisfied and keep the level of quality at best possible rate?
eBay is keeping its customers satisfied and keeping the level of its quality at the best possible rate by focusing on three important factors – honesty, integrity and transparency.
eBay uses the value of honesty when creating a description of the items that it sells on its website. Honesty is the underlying theme of all eBay’s communications with its customers. The company makes use of copywriting techniques to emphasize the different aspects of merchandise that it offers to its customers but makes sure that truth is not stretched and there is no misrepresentation of facts.
eBay uses the value of integrity by establishing and providing robust customer service policies. The company communicates its customer service policies in a clear and lucid manner and then ensuring that it is able to deliver on the promise that it is making to its customers. Satisfaction guarantee is given to buyers and the buyers are ensured that the items that they will receive will be as per the exact specifications and details that were provided to them online on the company’s website.
eBay uses the value of transparency. The experience of the customers has to match what was conveyed to them. The customers will not accept any deviation and so the communication has to be clear as well as concise. The company believes in full disclosure and this has helped the company with regards to customer satisfaction.
To keep the level of its services at the best possible rate the company invests its resources, time and energy to understand and comprehend who its buyers are, what are their need and requirements and how can eBay fulfill those needs and requirements of its customers in the best possible and optimal manner. eBay stresses on the need to connect its sales and support in a tangible manner. When sales and support are connected optimally then the chances of mismanaging returns will be minimized and the rate of resolution will be high. eBay also provides personalized communication to its customers. Many of eBay’s customers want to be assisted by human support agent. Although the costs of using human support agent are higher eBay makes use of personalized support templates so that exceptional customer service is provided to its customers without escalating its costs in a prohibitive manner.
The above steps and measures allows eBay to connect emotionally with its customers, use e-mail marketing, and offer something special to its customers. eBay is able to connect emotionally with its customers as it places itself in the customer’ shoes. This helps the online company to not only understand the needs of the customers but also establish and develop a level of trust. This eventually helps eBay to sell a product in a manner that provides best value to its customers. The company uses e-mail marketing so that its customers are aware of different promotions, offers, and discounts that will be useful for the customers. The company strives to provide valuable services to make the customers feel wanted and special. The customers are given the message that they are important.
Customer relationship management (CRM) plays a pivotal role in eBay’s strive for keeping their customers satisfied and in keeping their level of quality at the highest possible rate. The company’s customer relationship management is based on their innovative Customer DNA system. The company makes use of data about their customers that is generated on its website for the purpose of better understanding its customers. The company has detailed profiles of its customers. The company monitors what items you have browsed, what items you have put in your cart and what items you have rejected or discarded.
The company uses Customer DNA system to determine what kinds of customers are most useful to them. Once the valuable customers are identified the company makes use of its CRM analytics to provide value added services to these customers while keeping a sharp eye on the costs. The company is able to keep their customers satisfied and keep the level of quality at best possible rate by making use of its Customer DNA system to cross check disparate data sets to generate new insights. The new insights that are generated are used to provide value added products and services to its customers.
Explain your views and learning of eBay’s Corporate Level strategy to overcome their Weakness and Threats.
Strategic analysis at the corporate level- corporate level strategy is a high level strategy made by board of directors, administrative officers, chief executives and operating in distinct markets. This level of strategy deal with business to maximize value of stakeholders and entire business. In corporate level different strategies are made to use resources to create a strong corporate value. Porter’s generic strategic are used in this analysis. Boston matrix, VRIO analysis also used to gain competitive advantage.
Strategic analysis at the business level- the business level strategy is comprised of business and corporate managers. It deals with specific business units to gain competitive advantage. SWOT analysis, USP analysis used to strengthen the business competitive position by addressing opportunities and threats. Business level strategies are developed by middle level business unit managers and upper level managers.
Example of business level strategies- acquiring economic sources at lower costs than other companies, effective production resources, unique goods by other companies.
Example of corporate level strategy – Apple, American airlines
Their business model allows individuals to trade directly with each other and ensure safety as it's through EBay. EBay does not keep any inventory and their involvement is only for listing, auction and sale of the item. They have a strong brand image and are known for their online auction concept. The entire payment, shipping, and delivery are done without EBay intervention. They have a strong and loyal customer base build by brand reputation and recognition for providing excellent customer service. The customers get a selling space with limited risk and greater security.
The key weakness and threats that eBay face are as follows:
1. They are unable to control fake or illegal auction items
2. Inability to control specifics of a transaction
3. Due to their good reputation, any fraud cases get a lot of negative publicity
4. The global competition is increasing and a lot of new entrants are in the same market.
5. In uncertain economic conditions, the sales see a downfall.
6. There is also fear of sharing payment details on eBay as there are many phasing and scam websites with similar identity.
Recommendations to handle the threats and weaknesses are as follows:
• Creating a seamless customer-to-customer experience removing all fears.
• They can go global in countries like India, Mexico, China and incorporate the local customs and traditions and align the selling accordingly.
• They need to put checks to avoid illegal auction and stop fake accounts from spamming customer payment details.
• They have to increase resources and workforce to focus on brand and confidence building in the customers worldwide.
• They have to assure customers that they take all precautions to avoid spamming and eliminate risk.
• They must continuously diversify and target new markets to remain market leaders.
• They need to innovate and maintain their uniqueness by strengthening the customer-to-customer sales model and not become like other online retailers.
• They have to take a flexible approach to change markets and adapt their offering accordingly.
• They need to increase the degree of decentralization to become more attuned to changing ecommerce needs.
• They have to further create economies of scale by rapid expansion
Conclusion:
To sum it up Ebay has to rapidly innovate, diversify and become lean and agile and to continuously upgrade technology and diversify to meet market challenges and competition.
The corporate level strategy of eBay is very generic. They have been employing a global strategy, while the need of the hour is to have specific strategies. They need to have specific strategies to enter the foreign markets that are difficult to penetrate. Specific strategies based on local consumer preference and cultural facets would help to penetrate the difficult markets. For online phishing and illegal activity tracking, they need to strengthen their analytic part. Data analytics like business intelligence and cryptography needs to be implemented in the business strategy to help eBay overcome the threat of illegal activities.
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Requirement:
please add few (Researchers names + dates) in this essay same as the image attached below.
Explanation / Answer
Ebay Inc. plans to expand its online business marketplace through effective utilization of strategic strengths suitable for the e-commerce industry which indeed can facilitate to overcome weaknesses, take advantage of business opportunities and offset threats. However to improve competitiveness and performance company indeed must overcome weaknesses pertaining to limited emphasis on innovation, limited flexibility to market variations and imitable business model.
These internal factors are in fact regarded as weaknesses which indeed can limit the growth and competitiveness of the global e-commerce corporation because innovation certainly is regarded as the most important growth factor for enterprises with trading websites and business functions mainly conducted through internet.
Ebay’s organizational structure indeed facilitates to maintain strong centralized functional units which in fact could be useful in some manner but certainly it can be regarded as damaging towards effective business growth. For instance strong centralized units do support organizational cohesiveness and consistency.
However the same internal strategic elements indeed can facilitate to limit administrator flexibility and adjust according to existing complex business environment and unpredictable variations in global market. Furthermore the imitable nature of company’s business model is a weakness that contributes to competition especially comprising of new entrants.
Strong competition is indeed regarded as the major threat for Ebay Inc. For instance company faces rivalry from other global multinational corporations like Amazon which indeed act as major growth barrier in the industry environment. Furthermore due to ever changing technological trends company is also facing potential industry disruption.
However Ebay Inc’s generic strategy of cost leadership would indeed facilitate to develop and maintain competitive advantage based on cost minimization with economically priced goods and services and profitability. Organizations generic strategy would indeed plan to involve efficient administration practices, intensive growth policies and objectives framed towards cost minimization and productivity.
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