Business strategy

CE-3
ASSIGNMENT
e-Bay case study

2021

SUBMITED BY: SUBMITED TO:

RUPAL Prof. Rajan
PATIDAR
C-38 shreedharan
 1. Analyse the strategic capabilities of e-bay. What are the unique
resources and competencies it has?

Answer: Capabilities of E-Bay

One of the keys for being successful in business is the ability to adapt to changes that are
occurring in the marketplace. In the case of EBay, the company did transform itself from
shifts in the economy and consumer demand. This helped the firm to remain at the forefront
for innovation on the Internet. To fully understand how this is taking place requires
examining the strategic capability of the firm, what facilities gave them a competitive
advantage and how these areas can be managed. Together, these different elements will
provide the greatest insights as to how EBay was able to transform itself.

One of the biggest strategic capabilities for EBay is the management. The reason why is
because their ideas and leadership skills have helped the company adapt to changes that are
occurring inside the technology sector. During the last fifteen years, this has allowed EBay to
adapt from being an online auction site to becoming a major secured transactions provider.
This ability to transform itself is what has helped the firm to maintain its competitive edge. A
good example of this can be seen with EBay's purchase of Pay Pal in 2002. Originally, the
company picked up Pay Pal for $1.5 billion and integrated the firm in with their own online
bill payment operations. Since this time, Pay Pal has become one of the main drivers of
EBay's in term of revenues.

Strategies of e-bay

The overall eBay aims are to increase the gross merchandise volume and net revenues from
the eBay marketplace. More detailed objectives are defined to achieve these aims, with
strategies focusing on:

1. Acquisition – increasing the number of newly registered users on the eBay marketplace.
2. Activation – increasing the number of registered users that become active bidders, buyers
or sellers on the eBay marketplace.

3. Activity – increasing the volume and value of transactions that are conducted by each
active user on the eBay marketplace.

The focus on each of these three areas will vary according to strategic priorities in particular
local markets. eBay marketplace growth was driven by defining approaches to improve
performance in these areas.

First, category growth was achieved by increasing the number and size of categories within
the marketplace, for example Antiques, Art, Books, and Business and Industrial.

Second, formats for interaction. eBay Stores was developed to enable sellers with a wider
range of products to showcase their products in a more traditional retail format including the
traditional ‘Buy-It-Now’ fixed-price format.

eBay marketing strategy for growth

In its SEC filing, success factors eBay believes are important to enable it to compete in its
market include:

 ability to attract buyers and sellers;

 volume of transactions and price and selection of goods;
 customer service; and brand recognition.

Question-2: Does eBay have competitive advantage in your opinion. Please

explain

Answer:
YES, eBay have a competitive advantage, because eBay maintains a huge online
marketplace, where millions of items are sold by auction or fixed price. Its customers carry
the inventory, helping it keep costs low. Its network size gives it a competitive advantage,
too, as sellers favour eBay because that's where millions of buyers are, and vice versa.
eBay’s Broad Differentiation Strategy to beat their
competitors
1. Variety of products offered

When customers visit eBay they can search for virtually any product. eBay boasts a category
variety not matched by any competitor with over 27,000.

2. The eBay Community

eBay wants their customers to feel like they are a part of a community. This community feel
gives customers the sense that they are branch of something and cared about. By showing the
customers that their feedback, opinions, and feelings are important eBay has gained
tremendous ground with their customers.

3. The eBay Website

eBay has created an auction and retail website that is unique and interesting. This creative
site sets them apart from their competitors. The site is set up with many facets that reach a
broad span of visiting buyers and sellers. The site is also entertaining and easy to use making
it very appealing for online shopping and trading.
4. The eBay Brand Name

eBay was the creator of the online auction industry. When customers think of online
buying the immediately think of eBay. This has given them a competitive advantage
that sets them apart from other online auctions.

5. eBay’s Global Reach

The global reach of eBay is not achieved by any other online auction site. For large
corporations international selling and buying is done everyday. Even for an
individual buyer or seller, having the option of searching throughout 150 countries
with a span of 94.9 million users is very appealing.

Question3: Which Indian companies have a similar business model.

Explain in brief.

Answer:
As compare to eBay business model India Mart, TradeIndia.com, Alibaba India and
ExportersIndia.com. have similar business model because they are all companies
works in b2b and all are connecting buyers with suppliers. With some market share of
the online B2B Classified space the channel focuses on providing a platform to Small
& Medium Enterprises (SMEs), Large Enterprises as well as individuals.

Comparison of Ebay and India Mart business model

eBay business model

eBay’s business model was based on creating and maintaining a person-to-person

trading community. After implementing their model, eBay has been able to build
strategic partnerships, continue to make innovative changes and improvements, and
monitor its internal and external environments for possible future opportunities. This
has given them the prestige of being the world’s largest online auction company.

India mart business model

Indiamart Business Model is the most successful B2B marketplace business model in
the region. It successfully connects over 1.5 million Indian suppliers with global
buyers. More than 10 mln buyers monthly vision Indiamart and generate $1-billion
worth of B2B sales annually.

Indiamart is based on a combination of various types of business models offering

flexibility and proper management to both suppliers and buyers.
 Vs.

Indiamart Business Model is the most successful B2B marketplace business model in the
region. It successfully connects over 1.5 million Indian suppliers with global buyers. More
than 10 mln buyers monthly vision Indiamart and generate $1-billion worth of B2B sales
annually.

Indiamart is based on a combination of various types of business models offering flexibility

and proper management to both suppliers and buyers.

1. Subscription Business Model. Basic marketplace business model that includes the
following offers:

Listing Fees: Indiamart charges certain fees for listing products on its marketplace. In
exchange suppliers receive a comfortable business microsite to work with.

Business Leads: as a big marketplace platform, Indiamart provides potential customers to the
business owner that have great interest in a particular type of product offered by the seller.

Buy-Leads: a tender based marketplace business model where buyers post the product they
are looking for and sellers bid to win the tender.

Virtual EPBX: Indiamart provides a virtual number (VoIP) with multiple lines customers
can ring on.

2. Transaction Fee Revenue Model is based on charging a certain percentage whenever a

transaction is made.

3. Subscription Fee is one of the most popular options an Indiamart Business Model can
offer. By paying a monthly fee seller receives a marketplace package that allows posting,
promoting, offering products on Indiamart.

eBay is one of the most popular online marketplaces and offers a simple way of interaction
between the seller and the buyer. Unlike lots of other marketplaces, the eBay business model
does not imply storing products and instead directs the order directly to the seller. As a result,
you, as a customer, receive:

 Large Product Catalogue

 Fast Delivery
  Automated Order Tracking
 Advanced Return Policy

As a seller, you also receive:

 Global marketplace business model

 Global Customers
 Efficient marketing and distribution channel

eBay business model is a combination of two types of business models: listing fee and
commission-based ones. It is also a great example of an international marketplace open for
buyers and sellers from all around the globe.