E-commerce paper about analysis of eBay PDF

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E-commerce paper about comprehensive analysis of eBay...

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E-commerce Final Project - eBay

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1 Introduction, About, Development history, Suggestion, Conclusion 2 Operating strategy 3 Marketing strategy 4 Covid-19 influences & Global market expansion

Table of content Introduction

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About

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Development history

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Operating strategy Market strategy Operation Pricing Quality Management Inventory management Organizational culture & Human Resource Management Organizational culture Human resource management Innovative development

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Marketing strategy eBay Inc.’s Products Place/Distribution in eBay’s 4P Promotion in eBay Inc.’s Marketing Mix Prices and Pricing Strategies in eBay’s

5 5 6 6 7

Covid-19 influences & Global market expansion Covid-19 influences Global market expansion

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Suggestion

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Conclusion

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References

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Introduction

About Development history Operating strategy Online shopping is now a go-to for today's shopper. As an American multinational e-commerce corporation, eBay has a multibillion- dollar business with operations in about 32 countries. Its successful operation management strategy is also worthy of our analysis, research and learning. In terms of eBay's management strategy analysis, this part will analyze it from three aspects: 1.Marketing strategy 2.Organizational culture & human resource management 3.Innovative development They are all closely related to eBay’s effective operations management and affect eBay’s productivity level.

Market strategy 1. Operation eBay's overall strategy is “to deliver the best choice, the most relevance and the most powerful selling platform for its buyers and sellers. ”At the same time, eBay 's generic operating strategy focuses on intensive growth strategy, which means safeguarding the present position and expanding in the current product-market space to achieve growth targets, improving its market penetration, then developing and expanding business. With a suitable general competitive strategy and related intensive growth strategies, eBay's online market has flourished in competition with competitors such as eBid, Ruby Lane, and eCrater.

2. Pricing eBay's another generic strategy is cost leadership. The company develops and maintains a competitive advantage on the basis of minimizing costs, which means low prices or high profit margins. eBay’s general competitive strategy involves technologies that minimize fixed and variable costs in cross-border e2

commerce operations. Consumers and merchants are attracted to online retail and auction trading platforms based on attractive pricing strategies. Figure 1. What eBay’s next CEO needs to know as company faces pressure

Source: Levitsky, A., 2020. A Memo To eBay's Next CEO. [online] Bizjournals.com. Available at: [Accessed 19 June 2021].

3. Quality Management eBay aims to attract and retain various sellers and brands to provide differentiated goods, in order to deliver the best choice to its customers by offering them great products and services. The strategic objective in this decision area of operations management is to satisfy customers’ expectations regarding product quality. Achieving this operational objective helps fulfill eBay’s corporate vision and mission statements, which aim for leadership in the online trading services market. High quality processes contribute to high productivity and business effectiveness in satisfying consumers and vendors on the company’s trading platforms.

4. Inventory management In this regard, eBay's operations focus on inventory control to support operational needs. This strategic decision area involves external business conditions and resource support to ensure inventory adequacy. In this area of operations, the first-in-first-out (FIFO) approach supports eBay’s productivity goals. Promoted the effective upgrade of the company's information technology.

Organizational culture & Human Resource Management 1. Organizational culture A firm’s organizational culture or corporate culture defines the values,

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customs and traditions that guide employees’ decisions and shape their mindsets and behaviors. In this case of eBay’s corporate culture, results orientation is emphasized as a crucial aspect of human resource development and management. eBay has an excellent results-oriented corporate culture. This culture aims to improve business efficiency through human resource development. Excellence and results orientation are the core cultural factors that e-commerce companies believe are necessary to ensure competitiveness in the online environment. The attributes of eBay's organizational culture cultivate the ability of employees to support strategic management. Excellence, results orientation, inclusiveness and diversity all represent eBay’s corporate culture.

2. Human resource management Owning approximately 13,000 employees worldwide, eBay is committed to empowering people and creating opportunities through connected commerce. eBay always develops some interesting technical tools when toward employee management. For instance, it has developed internal tools and methods to simplify information flow and employee management, and help it cope with new working conditions. In addition, eBay has developed a special online employee center to provide its employees with all the latest information, company news, social updates and global events. Moreover, eBay has made a lot of efforts to promote measures to improve its employee’s balance between family and job, such as flexible working hours, an inclusive culture that understands the needs of employees by providing special "care allowances", and providing employee care programs. Last year, eBay launched a "parental leave" program for non-biological parents-12 weeks of full pay to support family life. eBay's human resources have a direct impact on the work environment. Employees rate their environment a B+ and are extremely happy at eBay. When asked what’s positive about the culture and environment at eBay, one user shared, “The people care about each other and making a difference...doing good while we're succeeding as a business.”. eBay is not only willing to create opportunities and value for employees through cultural diversity, innovation and social influence, but also has established strong family values within the company.

Innovative development Since the company was founded in 1995, eBay has long led through innovation. It reinvented the concept of auctions, applying technology to help facilitate commerce globally. Nowadays, eBay is much more than an auction site. The business has evolved into a global commerce and payments platform. For instance, eBay’s RedLaser comparison shopping app allows customers to scan product bar codes when they’re in a store, and find the best deal on that product at that moment, whether in that store, online, or at another store nearby.

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eBay also innotivate PayPal, which enables individuals and businesses to securely, easily, and quickly send and receive digital payments; and eBay Enterprise, which enables omnichannel commerce, multichannel retailing, and digital marketing for global enterprises in the U.S. and internationally. Additionally, eBay likes to appoint entrepreneurs to leadership positions. Acquisitions also have served as a critical component of the company’s innovation strategy. Since 2008, eBay has acquired over 37 companies, including Braintree, BillMeLater, and Magento. eBay takes pride in integrating these companies in a way that retains their innovative cultures. In conclusione, eBay put a lot of effort in the design of Goods and Services. Its generic strategy for competitive advantage and intensive strategies for growth require advanced technologies to achieve cost leadership with high productivity.

Marketing strategy eBay Inc.’s marketing mix or 4P is an example of how this type of ecommerce business can maximize its online service revenues. A firm’s marketing mix (or 4Ps) defines the strategies and tactics used for executing a marketing plan, involving decisions regarding product, place, promotion, and price (4P) variables. In eBay’s case, the focus of the marketing mix of 4Ps is on services for buyers and sellers. For example, the company’s products include its marketplace services for online consumers and vendors. In managing the effects of customers’ expectations, the business aligns its 4P to global market dynamics. The company’s pricing strategies are designed to ensure competitiveness against Amazon, Walmart (Walmart Marketplace), and smaller competitors. As one of the main players in the ecommerce industry, eBay Inc. has competitive advantages for attracting and retaining online shoppers and merchants. However, the company’s marketing mix must adjust according to trends in the industry environment. eBay’s marketing mix reflects the company’s perspective about the ecommerce market. For example, the corporation’s 4Ps consider the purchasing behaviors of consumers and sellers in using different information technologies, such as mobile technology. The company uses these behaviors in designing its products. In relation, the evolution of subsidiaries like StubHub and Kijiji is based on the company’s 4P. These interconnections stress the importance of the marketing mix in shaping strategies and management approaches in the multinational business, and in supporting eBay’s corporate vision and mission statements.

eBay Inc.’s Products This aspect of the marketing mix identifies eBay’s products. Products are the organizational outputs offered or sold to the target market. For example, in this case, the products are online services, such as online retail/auction services. The corporation’s target customers are buyers and sellers. This part of the 4P requires that the company accurately determine market demand and opportunities. These characteristics of the international business environment shape strategic management. At present, the following are the components of the product mix in

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eBay Inc.’s marketing mix: 1. Marketplace services 2. Ticket exchange services 3. Classifieds services Marketplace services are the core of the global business. These services are available at the main website ebay.com, as well as localized websites for various markets. For example, ebay.com.au offers marketplace service for the Australian market. Marketplace services allow consumers and vendors to make and complete deals. This part of the 4Ps also includes ticket exchange services through StubHub.com and corresponding localized websites. These online services allow users to buy and sell tickets to various events. Moreover, the company has classified listings websites, such as Kijiji. This product mix shows that eBay’s marketing mix is composed of online trading platform services.

Place/Distribution in eBay’s 4P In this aspect of the marketing mix, the analysis focuses on the channels or places where eBay Inc. distributes its products in the market and transacts with target customers. These places or venues may include physical and virtual locations. For example, online platforms are among the channels considered in this part of the 4Ps. The company manages distribution through a multi-pronged strategy that includes various technologies that enable consumers and merchants to easily access services from the multinational business. In this case, the places relevant in this aspect of eBay’s marketing mix are as follows: 1. Official websites 2. Mobile apps 3. Application programming interface (API) Official websites and mobile apps are the main places for customers to access eBay Inc.’s e-commerce services. For example, merchants and shoppers can use the company’s marketplace websites and apps for iOS and Android. In this part of the 4Ps, the company also distributes its products through its application programming interface (API). The API allows third parties, such as other websites and apps, to access the company’s services and its database of items for sales. Thus, these places optimize efforts to reach target markets and support eBay’s generic strategy for competitive advantage and intensive strategies for growth. This marketing mix shows that the company’s strategic management aims to provide multiple options for accessing the services of the business.

Promotion in eBay Inc.’s Marketing Mix This aspect of the marketing mix focuses on how eBay Inc. promotes its products in target markets. The company’s corresponding strategies and tactics define communications between the business and the target consumers and vendors. For example, public relations activities are promotional in satisfying the objectives in this part of the 4Ps. Effective promotion is the key to managing customers’ expectations and increasing the company’s market share in the global ecommerce industry. The following components of the promotional mix are applied in

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eBay’s marketing mix: 1. Sales promotion 2. Advertising 3. Public relations Sales promotions are among the most significant strategies in eBay Inc.’s promotional mix. Designed to increase sales in the short term, these sales promotions include discount coupons for shoppers and special offers for sellers. The 4Ps also include advertising, which is infrequently used in attracting more users to the company’s online trading platforms. Furthermore, public relations help promote the company’s business and brands. For example, the eBay Foundation maintains corporate social responsibility programs that increase the company’s visibility in various markets around the world. Overall, this aspect of the marketing mix emphasizes managerial focus on short-term promotional activity.

Prices and Pricing Strategies in eBay’s In this aspect of the marketing mix, eBay determines the price ranges and price points for its services. Among the 4Ps, this element is directly linked to the company’s profit margins and international market share. For example, lower prices can attract more sellers and, consequently, more shoppers to the company’s online trading websites. The suitability of pricing strategies affects management goals and business performance. Managers implement the following pricing strategies as part of the marketing mix of eBay Inc.: 1. Market-oriented pricing strategy 2. Dynamic pricing strategy The market-oriented pricing strategy involves prices that are set based on current or prevailing market prices. For example, eBay’s current seller fees are comparable to competitors’ fees in offering e-commerce services. The company’s 4Ps also involves dynamic pricing, which allows flexibility in setting prices. For instance, fees include fixed fees per item sold, as well as fees as a percentage of the final sale amount. Vendors can choose among selling formats and corresponding fees. Through the dynamic pricing strategy, the company manages customers’ expectations on sales format flexibility. This aspect of eBay Inc.’s marketing mix helps optimize profits as the global business grows its sales revenues.

COVID-19 influences & Global market expansion Covid-19 influences During the covid-19 pandemic, global economics has been highly destroyed. However, few industries instead gain much higher profits than before during the pandemic, one of those is online trading platforms. eBay, the multinational ecommerce corporation, picked up 11 million more buyers in 2020 while other corporations were going through serious losses for their business. Its annual active buyers count up 7 percent to 185 million globally and added two million buyers in the fourth quarter over quarter 3.

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The reason eBay can find success during this serious time is that they pay attention to how to help both the buyers and sellers on their platform to get through the problem by carrying out practical and effective plans toward their customers. For the sellers, they come out with mainly three strategic decisions. First is no listing fees on 200 items per month. That means there’s no risk for the sellers to get started, sellers only pay fees when they sell. And second is the on-demand access to the eBay seller school. eBay created an e-learning platform that is designed to power the sellers’ success. It includes expert-designed courses, videos, and other learning resources. Moreover, it is available every time, every day, and also one hundred percent free. Last, the third one, they created a media called “eBay community” to help the sellers connect with each other, share tips, and get the latest news as well. On the other hand, they also come up with some strategies to prevent price gouging during the pandemic to protect the buyers. eBay claims that they have taken significant measures to block or quickly remove listings and items that make false health claims or offer products at inflated prices in violation of applicable laws. They specify that only authorized sellers may list out medical masks, hand sanitizer, and disinfectant wipes. And only for business sellers to list out toilet paper, diapers, baby formula, baby wipes, tampons, Lysol disinfectant spray, and Clorox bleach. eBay not only set up measures for customers to report if they see any item that violates the policies but also have already removed or blocked more than 50 million listings since the start of the pandemic. However, eBay’s success during the covid-19 pandemic is not only because of their distinct strategies toward it but also attributed to their continuous expanding efforts in growing its customer base starting from before. “What we're seeing is that the behavior when we look at things like frequency and retention is not different, and is as strong as we've seen in past cohorts. That means they didn't just come to eBay to buy a specific deal, and then we won't see them again. We’re doing a good job of turning a percentage of them into enthusiasts. And what we're really focused on is how we turn them into product category shoppers.” said the CEO Jamie Iannone. eBay aims to convert more buyers into sellers, which they think by expanding their users' interactions with the platform can help their buyers indirectly boost the trust in them. Since when they acquire a customer to come in as a buyer and then get them to do any kind of casual selling, they will become two to two-and-a-half times more valuable to us as a buyer. Therefore, by the distinct strategies toward the pandemic and the ongoing efforts in maintaining, strengthening the customer base, eBay didn’t lose any profit. Instead, they become more solid than ever.

Global market expansion To pursue global market expansion, the company needs to clearly understand from past experiences to know why the same industry might receive different results when expanding in a different country. They must clearly know about the local customer demand, local labor force, and even the locally available resources, etc.

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The two main considerations that the company might face when doing the global market expansion are cost reduction and adaptation to local markets. eBay, one of the biggest multinational e-commerce corporations, by using a single platform to provide online trading in all its markets had helped it successfully expand into some international markets like Europe and Latin America. However, on the other hand, the method made it fail to compete in the Asia Pacific region. eBay followed a global strategy and didn’t try to transfer control to the local business partners to let them help with their local expertise. Users could purchase or sell goods with anyone in the world over a single platform. Having a single platform helps all markets stand in the same standard, which might bring effectiveness in certain markets with customers that had specific needs and expectations, or not. In a good w...