Business Case eBay 1

Topics: Electronic commerce, EBay, Online auction business model Pages: 16 (3813 words) Published: June 14, 2015

Executive summary
This report has focused on an innovation of eBay, the largest online marker in the world. Considering this, there are two innovations that the company can to choose from. The first one is conducting its own shipping through removing other shipping options in the site. The other one is through charging shipping firms 5% of their shipment fees for each transaction done on eBay website. From this report, it is a fact that eBay has the resources capabilities of performing any of the two innovations including financial resources, IT infrastructure, current customer base as well as talents. However, the first innovation has higher financial risk as compared to second one. This is because it includes big investment in starting up shipping company, it does not give the customers the choice of choosing their preferred shipping costs. Nevertheless, if successfully implemented, the company can yield a substantial amount of profits as eBay already has more than 230 million users on its platform , besides eBay got the expertise to implement a proper electronic platform for tracking shipment and getting two way feedback from the customers to ensure the efficiency of the shipment process , besides this innovation would enable eBay to increase its user platform and enhance customer satisfaction by efficiently managing the delivery and shipment of products. For the second innovation, although the financial risk is small, the profits are much lower as compared to the first innovation and the success of this option is extensively dependent on the courier company chosen by eBay. Thus, considering the two innovations, this report finds the first one is more lucrative as compared to the. Second one Therefore, this report recommends the company should consider implementing the first innovation, bearing in mind the chances of the financial risks are minimal. Contents

1.0 Company background6
2.0 Problem to be addressed and innovation6
2.1 Problem to be addressed6
2.2 Strategic response7
2.2.1 First suggested innovation: Provision of shipping services7 2.2.2 Second innovation: Receive $1 from other shippers7
3.0 Asses market opportunities7
3.1 Market opportunities for first innovation7
3.2 Market opportunities for second innovation8
4.0 Identify target markets8
4.1 Target market for the first innovation8
4.2 Target market for the second innovation9
5.0 Analysis of competitors and barriers9
5.1 Competitors for first innovation9
5.2 Competitors for second innovation10
6.0 Assess resources and expertise10
7.0 Knowledge and commitment10
8.0 Strategy for landing product11
9.0 Financial risks12
10.0 Conclusion and recommendations12
References16

1.0 Company Background
EBay is an American multinational e-commerce company. The company provides a wide range of consumer to consumer as well as business to consumer sales services through the internet (Alm & Melnik, 2014). Headquartered in California, United States, the company was established in 1995 by Piere Omidyar. With increased use of internet among many people all over the world, the company has witnessed substantial growth over the past few years. Currently, it is a multi-billion company with operations localized in more than thirty countries all over the world. The company operates eBay.com, which is online auction as well as shopping website, where businesses and people buy and sell a wide range of products as services all over the world (Cebi, 2013). eBay generates revenue by a complex system of fees for services, the more the seller sells and get profits the more eBay acquire profits. The website has also expanded to include online classified advertisements, online ticket trading, and online money transfers among other services. This report seeks to evaluate a suitable innovation that can increase profits for the company. 2.0 Problem to be addressed and innovation

2.1 Problem to be addressed
Due to the increased popularity...

References: Cebi, S. 2013, “A quality evaluation model for the design quality of online shopping websites”, Electronic Commerce Research and Applications, vol.5,no.3, pp.124-135.
Gold, E , 2002,“Shipping and International Organizations: The Globalization of an Industry”, Ocean Yearbook Online, vol4,no.2, pp.354-377.
Hambrick , D, & Fredrickson, J. 2014, “Are You Sure You Have a Strategy?” , Academy of Management Executive, vol 15, no.4, pp. 48-59.
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