EBay is a multi-billion business that operates in 37 countries. As an international online marketplace, the company lists millions of items on its platform ranging from thousands of categories such as books, toys, computers, antiques, and electronics (eBay). The company's mission is to provide an international trading platform where people can practically trade anything. EBay's strategic management process involves five main objectives aimed at enhancing its current information system, and it includes; developing an eBay community that is loyal and vibrant, improving the existing features and functionality, increasing the value added services, widening the existing trading platforms, and developing more international markets. It is important to realize that this strategic approach aims at taking advantage of the increasing consumer adoption of the internet. Furthermore, as one of the largest e-commerce business in existence, the proposed strategies will ensure a competitive advantage over its main competitors such as Amazon, Google, and Ubid (Jurevicius).
Response 1 (distinctive competencies)
It is important to realize that EBays success is based on its online auction model. As a pioneer in online selling, the company was the first in the industry to diversify from a fixed-price selling approach and diversified to allow buyers and sellers auction their products. The distinctive competencies for EBay include; partnership with other international companies such as PayPal, brand imaging, global reach, publicly traded, and over 25,000 different categories (Liquori).
Partnership with other international companies (PayPal)
As a premier service for online payments and transactions, PayPal allows its customers to have confidence in its payment system, and since they are in alliance with EBay, it ensures a sense of security among the customers. Through a partnership with other online companies, EBay can easily transition to other country cultures (Chaffey).
EBay diversified from fixed-price selling to online auctions. As distinctive competency, its brand image and reputation allowed the company to lead in the industry.
EBay's global reach is unmatchable. The company has the capability to extend its services globally even as Amazon.com, its chief competitor comes in a close second.
As a publicly traded company, the initial public offering created almost $66 million as the new capital. It is important to realize the significance of having to go public in terms of revenue income.
Over 25,000 different categories
EBay offers a variety of different products more than 25,000, and this gives the company a competitive edge over other online auction sites.
Response 2 (recommended strategies)
Even though EBay is the current leader in online auction, and also has an efficient existing strategy, there are suggested alternative solutions the company can integrate to ensure competitive advantage such as;
Acquisition of the current online auction organizations; by acquiring other companies such as Yahoo or uBid, eBay also attracts the customers of the other brands; this would ensure that it will control a large percent of the industry and have a niche market. In addition, this strategy would also make sure it eliminates some of its competitors to ensure its position in the market (mis.kent.edu).
Secondly, is to go the way of Google. Google began as a search engine but, later on, commenced selling its technology built into servers. EBay could also do the same with its online auction business. The approach would mean that EBay could hold the auctions at a small fee or develop a server to sell. Either way, this would allow more consumers in its platform than its competitors (Chaffey).
Thirdly, cybercrimes such as fraud have become an internet and security concern hence eBay should put up adequate security measures to ensure no fraudulent activities can happen on the site, and this can be done through verifications and authentication. The company should effectively design an online tool that will address personal security interactions between the sellers and the buyers; this will enable a sense of community embedded on trust (mis.kent.edu).
Lastly, broadening the services and products portfolio should be a top priority strategy for the company. Currently, EBay uses bulletin boards and chat rooms to ensure real-time interface between buyer and seller. They can also collaborate with other affiliation referrals to create a customer base. Such action is an element of expanding its conventional business model to meet the scope of the new market segments. If EBay adheres to these suggested strategies, certainly it will have a competitive edge over its main competitors (Liquori)
Response 3 (globalisation strategies)
EBay's globalisation strategy can fall under both the corporate-level and business-level strategy. The corporate-level strategy of EBay is to become a diversified business. The global reach can be achieved or enhanced by strengthening its current information system. Improving the existing features and functionality of its existing information system will ensure a further global expansion. Additionally, it will also increase the value added services, widening the existing trading platforms, and develop more international markets. EBays business-level strategy uses a differentiation, cost leadership, and growth strategy. The differentiation strategy the company integrates is the security service it encompasses in its website, online auctioning, and the variety of products offered. It is important to realize that a significant advantage EBays current globalisation strategy has is the ability to reach to global consumers on a single platform. However, one disadvantage of its corporate-level and business-level strategies is that it is trader-centric; it is not inclined as profit-oriented as compared to that of Amazon.coms (Liquori).
Therefore, I would recommend EBay to pursue further global expansion that includes alternative strategies such as increasing the volume of transactions conducted in the marketplace through enhancing activation processes. As seen, its current globalisation strategies (corporate and business levels) need to be re-visited for the company to remain competitive.
Response 4 (retaining competitive advantage)
EBay can maintain its competitive edge through implementation of long-term strategies such as;
Offering peer review where buyers and sellers will have an opportunity to rate the transaction process; the implementation of this plan will ensure that a differentiation strategy will allow EBay to gain a competitive edge over rivals such as Amazon and uBid.
Another long-term strategy is to form alliances with huge companies in other countries such as China's top auction site Taobao.com. This will ensure that EBay can extend its market presence to other nations.
To keep up with rival competitors, EBay must make sure that it includes innovative products and avoid counterfeit goods that may influence buyer confidence. Moreover, it is recommended that EBay invests in an efficient information system that will allow consumers to retrieve any information regarding the product. This will enable the company to be a number one source for buyers and sellers to remain loyal to the brand (Liquori).
An important aspect EBay should consider in its future growth is to promote itself through online advertisements and promotional tools. A variety of different promotional options will enable the client to choose from various products. Social media marketing has also become a powerful tool for organizations to market their products and it is essential for a leading company like EBay to create efficiently awareness of its services on social platforms like Twitter, LinkedIn, and Facebook. An effective social media marketing and implementation plan will allow EBay always to be a threat to the industry and strengthen the company and brand name for many years to come (Liquori).
Chaffey, Dave. "Ebay Case Study - Smart Insights Digital Marketing Advice". Smart Insights. N.p., 2013. Web. 16 Feb. 2016.
eBay,. "Our Company - Ebay Inc.". N.p., 2016. Web. 16 Feb. 2016.
Jurevicius, Ovidijus. "Ebay Company SWOT Analysis 2013 | Strategic Management Insight". Strategicmanagementinsight.com. N.p., 2013. Web. 16 Feb. 2016.
Liquori, Thomas. "Comparison Of Ebay.Com And Alibaba.Com". Thomasliquori.me. N.p., 2009. Web. 16 Feb. 2016.
Mis.kent.edu,. "Part I: EbayS Strategic Process". N.p., 2016. Web. 16 Feb. 2016.
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