Case Study Questions
1. Contrast eBay’s original business model with its current business model.
eBay started out as an online auction for sellers and buyers to come together in the sale of almost anything. This business model worked under an auction system where sellers would list their items at a starting price. Buyers would then place bids on the items they were interested in and the highest bid during the auction period would be the winning bid. This differs from eBay’s current model in that the current model seeks out stores to showcase products sold at fixed prices. The former model was more along the line of a flea market style where the current model trending along the lines of a traditional e-commerce model. As eBay evolves, it is becoming more like Amazon in how it handles business and prices merchandise.
2. What are the problems that eBay is currently facing? How is eBay trying to solve these problems?
There are some problems that eBay is contending with. Fraud is an issue that eBay is contending with. They have put measures in such as authenticating highly counterfeited items. Further efforts have enable buyers to receive protection against counterfeit items through refunds. Another problem for eBay is keeping up with trends in how consumers want to access their site. To counter this problem, eBay had tried to stay ahead of the mobile platform changes. They are furthering their efforts to develop and improve apps for the new trend of wearable devices that can connect through a mobile platform. Product cataloging is also a problem that eBay had to contend with. Their issue has stemmed from an unstructured catalog. To counter this issue, them are working to streamline the catalog. Part of this process is to help like items to be listed as such instead of appearing as completely different items. Analytical tools are also being updated to take advantage of AI learning machines. These tools will help to improve listing, ordering, and inventory management. Further improvements to attract customers have been to their search features.
3. Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there any other solutions that eBay should consider?
I would argue that eBay is making sound decisions regarding the solutions they are implementing to combat their problems. As the e-commerce industry grows and evolves, eBay needs to evolve with it. Through improving their app access from mobile devices to their AI learning machines, they are positioning themselves to be competitive with other e-commerce giants. Their focus on gaining customer preferences will enable them to keep pace with companies like Amazon when targeting products to certain customers based on interests. Along with improvements targeted to customer preferences, eBay is working to streamline its business. In doing this, eBay allows itself to be more agile as it navigates new trends and changing environment within the e-commerce sector.
4. Who are eBay’s top competitors online, and how will eBay’s strategy help it compete?
The primary competitors for eBay are Amazon, Target, Alibaba, and Walmart. The strategy that eBay has put in place will help them to compete in a few ways. To start with, eBay will now be able to collect some of the fees that it used to lose to PayPal prior to the spin-off. This will align more with how Amazon and Alibaba collect seller fee and create extra revenue for eBay to stay competitive. Additionally, the focus on mobile apps helps to ensure eBay is easy to access from multiple mobile devices. This will help to keep eBay ready to be accessed by consumers and allow eBay to compete for their purchase dollars. Furthermore, eBay customers now have a price guarantee that rewards them for loyalty to eBay. These are a few of the ways in which eBay’s new strategy will help them to be competitive and relevant in the e-commerce market.
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? Are 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.
I went to liquidation.com for this project. I started with an auction for New Rugged Armor Case With Stand Shockproof For iPad 2, 3. The stage this product is in would be the declining stage because of market saturation. This auction is by sealed bid and does not specify a minimum bid price. The duration was of the bid was not disclosed, only a closing date and time were available. The product is a new product but is designed for an older iPad. The product is sold by the lot which is approximately 286 items with a 2% variance allowed. The next product I viewed was for Kitchen Accessories Squeezers Serving Spoons Bamboo Sets. This auction is for products in a saturated market and would be declining. The starting bid is $100 and is for a lot of 76 with a variance of 2%. There is not a specified bid increment associated with this auction. The remaining time for this auction when I viewed it was about 2.5 days. The final product I researched was New – Unlocked S10 MTK6572 Android 5.5 & Earphone. This product is not a Samsung product although it does use the S10 name. The starting bid is $100 and there is about 4 hours remaining at the time I viewed it. There is not a bid increment associated with this product. The lot size is misleading as it says 131 pieces with a variance of 4%. Upon closer view, there is one phone and the rest of the pieces are earphones. These items would be in a saturated market and the declining stage of their product cycle.
These three products were being sold by three different sellers. The most probable reason for the use this market place to sell these items is they are imports from China that are targeting a low price-point within their respective categories. The sellers are more than likely trying to liquidate an overstock of the products an overseas marketplace. They are trying to piggy-back on large name brand products to try to sell these products. This would be another reason that may explain the large lot sizes these products come in.
4. Visit one of the social networks listed in Table 11.1 and compare it to Facebook. In what ways is it similar to Facebook, and in what ways is it different? Which do you prefer, and why?
LinkedIn is a social media website that has been marketed toward business professionals. In caparison to Facebook, it has many of the same features and tendencies. You can post pictures, leave comments, share links, and create a social/professional network. LinkedIn has a lot of advertising on it feed, but the advertisements are geared toward business and business professionals instead of to a personal social group or individual user. The main advertising geared to individuals on LinkedIn comes by way of professional development like resumes, skills training, or certifications. This contrasts greatly with the types of personal business ads on Facebook. The ads on Facebook tend to be for consumer products from companies or private individuals trying to start a little business. Further differentiation comes from the type of stories and who is reporting them. LinkedIn tends to have business news and reports from business oriented sources. Facebook on the other hand has a lot of pop culture news that comes from a wide variety of sources. Facebook also differs in that there are thousands of social games that are accessed through Facebook. LinkedIn does not have social gaming involved on their platform.
I prefer LinkedIn for a couple reasons. First off, I am focused on my career and possible job changes. LinkedIn provides me with a better platform to stay up-to-date on the many different companies I may want to work for. Additionally, I can stay current and relevant to the industries that I am associated with for work. The second main reason I prefer LinkedIn is that it seems to offer a more complete news story than Facebook does. Along with the news, the comments people leave on LinkedIn tend to be business related and at least somewhat educated when compared to Facebook.