Assignment:
Crystal,
From the case study, evaluate the efficiency of eBay's evolving business model within the retail auction industry. Next, compare the key difference of the evolving business models of both eBay and its major competitors.
EBay business model is a unique combination of functions that has been successful implemented in the initial state of its operation they are a company that adapt to changes hastily and learn how to meet the demand of the market. The main objective was to provide a safe environment for sellers and buyers in an auction style that is secure for both parties in hopes of one gaining a product him or her desire through purchase as well as the other party being monetary compensated for their sale. Since eBay being in operation close to a decade and being well establish in the U.S Market eBay has been able to make its presence and dominance known now in many other affluent countries that is now using eBay as an auction source.
There are many driving dynamics that differentiate EBay ever changing business model from those of its close rivals in that industry. EBay has integrated ample of strategies that is totally different from competitors; just to list a few eBay currently has a drop store to help the individual's sellers or buyers or are not that savvy incline to use a computer to sell or make purchases. Being to work closely with one of biggest online secure payment program PayPal, eBay, pro store and eBay express. Each area of the business entity begins to branch off to make eBay more profitable and accessible for clients to use compared to their competitors (Hill & Jones, 2013).
From the case study, evaluate eBay's new multibusiness model in terms of the company's diversification strategy, levering of competencies, sharing of resources between business units, and ability to use product bundling. Provide a rationale to support your response.
With eBay multi-business entity such as the acquisition of PayPal, Skype recent development of eBay pro stores, eBay Express, eBay drop off, and acquisition Butterfield & Butterfield (Hill & Jones, 2013). Branching out into these entities of business has given eBay an even greater advantage compared to others. The purchasing of PayPal has now given them the knowhow and viability in securing payment between customers and sellers which they have not been able to do so good in past effectively. The acquisition of Skype have come in hand by giving the users the accessibility to contact the seller within minutes by calling over the computer and have given the company the ability to communicate more hastily buying using video conferences, transfer files and lot more.
Hill, C. W., & Jones, G. R. (2013). Strategic management: an integrated approach (10th ed.). Mason, OH: South-Western, Cengage Learning.
William,
From the case study, evaluate the efficiency of eBay's evolving business model within the retail auction industry. Next, compare the key difference of the evolving business models of both eBay and its major competitors.
Ebay is quickly evolving from an auction company to one in which they seem to really want to become an online retail business moving into Amazon's business of being an online retailer. This seems to be evidenced by the fact that the new delivery service is actually a middle-man type of service where someone buys from Best Buy or other similar retailers and Ebay just does the transaction and delivers the goods within one hour in select cities such as San Franscisco. It seems to be a relatively efficient business model because the start up costs with testing this new service are high they need a huge amount of capital to start and run a service like this, so their existing business model must be sound. They want to test a new service to complement their existing business, which is a good idea actually.
The key differences of Ebay versus its existing competitors are that Ebay is primarily an online auction site. Amazon links buyers and sellers of unused goods from small businesses to large retailers. Ebay's market is slightly different in that they initially grew from the auction of goods that were already used, not goods that went straight from retailers to customers. The difference in the business models of Ebay versus a competitor like Amazon would be that Ebay is trying to test a service which may complement its existing service of selling goods. Cutting out the delivery would mean cost savings and more money for both buyer and seller of goods. Amazon's strategy is lots of unrelated diversification, with its selling of the Amazon Fire and Kindle tablets, entry into the video game industry it is trying to remake itself into more of a technology company not an online retailer. Ebay is trying to become a bigger retailer of goods.
From the case study, evaluate eBay's new multibusiness model in terms of the company's diversification strategy, levering of competencies, sharing of resources between business units, and ability to use product bundling. Provide a rationale to support your response.
Ebay is doing a good job of creating a new multibusiness model to complement its existing business of an online auction place. It is also trying to enter into new markets to compete with Amazon by being able to sell directly from a retailer like Best Buy or other similar companies. The new idea that it is bringing to the table is offering to have an actual product shipped from a local retailer and delivered to the customer within about an hour. This idea is an innovative idea and not completely competing with Amazon or Fedex directly but could set the stage to enter into new markets with this idea. It is leveraging its competencies by entering into the online retail market and offering this new service. It has leveraged its competencies by rolling out this new service using its expertise in selling things online.
They can potentially offer a bundle service if the new delivery service works out well a buyer can buy something from Best Buy, have it delivered and all for a low cost, or even possibly offering a subscription much like Amazon has with their Amazon Prime membership.
References
Hill, C., & Jones, G. (2013). Strategic Management: An Integrated Approach. Mason: Cengage Learning.