CH-11 Case Study Questions
1. Contrast eBay's original business model with its current business model.
Ans: eBay’s original business model was to attract sellers to auction goods, products, and collectibles whether they’re brand new or pre owned. They relied heavily on the sellers to gain their income. Now, eBay’s business model has changed quite a bit. Most sellers are now big retailers selling out of season or overstocked products at a fixed price. Also, they rely heavily on papal for revenue since you absolutely must have a papal to purchase from eBay as all transactions go through them.
2. What are the problems that eBay is currently facing? How is eBay trying to solve these problems?
Ans: A problem that eBay is currently facing is the continued growth of Bill Me Later. It increases overall risk for the company putting downward pressure on stock price. Expanding into loans is coupled with the risk of default and regulatory issues. One of eBay’s solutions Is expanding the market place and mobile app technology. They have increased the marketplace by having diverse sections such as autos, electronics, clothing, etc. Also, eBay’s mobile up has received millions of downloads along with millions of listings. The more they list and sell, the higher the revenue.
3. Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there any other solutions that eBay should consider?
Ans: I don’t necessary believe that their solutions are good. Technically, they’re Just forgoing the risk of BPML by expanding areas where they can sell. What happens when they reach the ceiling of expansion? One solution that I would suggest is to get rid of BPML. Although they account for 14% of all sales, the risk Is greater than their results.
4. Who are eBay's top competitors online, and how will eBay's strategy help it compete?
Ans: The top three competitors are Amazon, Google Search, and scraggliest.
Their new strategy helps broaden their reach making them customers go to store to search for anything. Mobile app Is also top notch as It has different APS for different goods such as fashion app, motors app, and even Redresser checking app. I’m assuming eBay would provide differentiated service to customer as they probably have different reps for the different departments that they have.
2. Examine the use of auctions by businesses. Go to any online auction of your choosing and look for outlet auctions or auctions directly from merchants. Research at least three products for sale. What stage in the product life cycle do these products fall into? Is there quantity purchasing requirements? What was the opening bid price? What are the bid increments? What is the auction duration? Analyze why these firms have used the auction channel to sell these goods and prepare a short report on your findings.
Ans: I am looking at the site: www.wisconsinsurplus.com. This is a state auction site where you can find anything and everything’s that a state has bought, or schools has brought through state money. All the item that is listed there goes to the auction after x amount of years and any one can buy it through the auction site. You never know you can get a gold for a dime.
Three products for sale: Apple iMac 2013, Dell OptiPlex 790 and a Car. The product is probably 5-7 years old and has been used a lot, I would say about 50-60% of its life cycle. The opening bid price is $5 only and there is no quantity purchasing since you must bid on each item separately. Bid increases by 10%. The auction duration is 2 weeks.
I work in the IT and we put stuff for auction, and we have sold bunch of laptops, computers, monitors, printers for a very and I say it again very cheap price. I cannot share the detail info because of confidential information and law I must follow.