case study on ecommerce

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1. Why has eBay become such a successful and diverse online marketplace? Visit the eBay website to help with your answer, and check out the many trading categories, specialty sites, and other features. Ans. eBay, Inc. is the largest and most popular marketplace on the Internet, allowing members to buy and sell almost anything. Launched in 1995, about 147 million people now use eBay. An estimated 430,000 people in the United States make all or most of their living by selling on eBay. eBay’s online payment service, called PayPal, enables transactions nearly anywhere in the world. eBay proclaims “trust” between buyers and sellers as the key to the success of the marketplace. eBay is the “The world’s Online Marketplace”, which is its positioning statement, and it means many things about the company’s identity. It enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses. eBay offers an online platform where millions of items are traded each day. The objective at eBay was to “to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of even Amazon.com, making it the “world’s most valuable Internet retailer”. Pierre Omidyar, founder, is focused to achieve excellence in strategic management for improving the company’s strategy, sustaining the company’s growth and business performance, and potentially expanding from online auctions into general “etailing”, and to become “the world’s largest online mall”. This research paper intends to study the click and click business model of eBay, whose competitive advantage lies in its pure play strategy, a breakthrough from the traditional brick and mortar model, which leads to sustainable growth and a competitive edge over the other retailers. Keywords: Online marketplace, etailing, work ethics, online auctions/platform/mall Introduction: eBay establishes itself as the “The world’s Online Marketplace” .Coincidently, it is also the positioning statement of eBay,which itself means many things about the company’s identity, it enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses, Bay offers an online platform where millions of items are traded each day.

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Page 1: Case Study on Ecommerce

1. Why has eBay become such a successful and diverse online marketplace? Visit the eBay website to help with your answer, and check out the many trading categories, specialty sites, and other features.

Ans. eBay, Inc. is the largest and most popular marketplace on the Internet, allowing members to buyand sell almost anything. Launched in 1995, about 147 million people now use eBay. An estimated 430,000 people in the United States make all or most of their living by selling on eBay. eBay’s online payment service, called PayPal, enables transactions nearly anywhere in the world. eBay proclaims “trust” between buyers and sellers as the key to the success of the marketplace. eBay is the “The world’s Online Marketplace”, which is its positioning statement, and it means many things about the company’s identity. It enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses. eBay offers an online platform where millions of items are traded each day. The objective at eBay was to “to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of even Amazon.com, making it the “world’s most valuable Internet retailer”. Pierre Omidyar, founder, is focused to achieve excellence in strategic management for improving the company’s strategy, sustaining the company’s growth and business performance, and potentially expanding from online auctionsinto general “etailing”, and to become “the world’s largest online mall”. This research paper intends to study the click and click business model of eBay, whose competitive advantage lies in its pure play strategy, a breakthrough from the traditional brick and mortar model, which leads to sustainable growth and a competitive edge over the other retailers.Keywords: Online marketplace, etailing, work ethics, online auctions/platform/mallIntroduction:eBay establishes itself as the “The world’s Online Marketplace” .Coincidently, it is also thepositioning statement of eBay,which itself means many things about the company’s identity, itenables trade on local, national and international basis, with a diverse and passionate communityof individuals and small businesses, Bay offers an online platform where millions of items aretraded each day.According to company lore, the idea for eBay came from founder Pierre Omidyar’s wife, whowanted to trade Pez dispensers with other collectors over the Internet. In truth Omidyar had beenpondering an Internet auction venture before he was ever aware of Pez mania. He says that he hadbeen thinking about how to create an efficient marketplace-a level playing field, where everyonehad access to the same information and could compete on the same terms as anyone else.”After writing the code for the site, Omidyar launched eBay from his home in mid-1995.theconcept of an Internet marketplace caught on so quickly that by the end of the year, eBay wasgetting a few thousand hits daily. Even more impressive the website was profitable from itsinception. The objective at ebay was to develop the work ethics and culture of eBay as a fun,open and trusting environment and to keep the organization focused on the big picture objectivesand key priorities.Ebay went public in September 1998 at $18 a share. By early march 1999, the stock was tradingapproximately b$282 per share. The company market capitalization had surpassed that of even Amazon.com, making it the world’s most valuable Internet retailer.

Page 2: Case Study on Ecommerce

2. What do you think of eBay’s playbook concept? Why do they call it a playbookAns. In most cases, playbooks are notebooks or documents that outline and describe a strategy for a certain sport, organization or activity. For example, video game playbooks may contain tricks and tips for passing through certain levels of each game. In the theater arts, a playbook is a book containing the scripts for one or more plays. The term playbook is particularly associated with football.

1. A notebook containing descriptions and diagrams of the plays that a team has practiced (especially an American football team) 2. A book containing the scripts of one or more dramatic plays; "the 1963 playbook leaves out the whole first scene" 3. A scheme or set of strategies for conducting a business campaign or a political campaign; "they borrowed a page from the playbook of the opposition" The playbook analogy refers to steps that need to be taken for success, not unlike a sports playbook. The playbook model allows existing site managers to take the steps necessary in order for that particular group to grow on eBay as fast as they wish. The playbook describes how to set the right conditions for electronic trading to flourish in a particular area. eBay playbook concept is a great idea. They have all of this knowledge throughout the company that they have collected over time, and making it available for new employees or employees in new markets will greatly improve the learning curve for these new ventures. It makes me think back a few chapters when we discussed knowledge management systems. E-bay has all of this knowledge, a lot of it would be classified as tacit knowledge, and they are using their playbook to make this information available to everyone company wide.

3. Is eBay’s move into the international arena a good long-term strategy? Why or why not?Ans. eBay’s move into the international arena is a good long-term strategy. The Internet will only continue to expand to more countries throughout the world, which will further expand eBay’s market share. As stated in the article, “Ebay appears to have cracked the code for one of the toughest tasks in the increasingly interconnected global economy: transplanting a hit business concept into places with vastly different cultures and allowing it enough flexibility to adapt to local conditions.Ebay’s strategy for expanding to new countries is simple and effective: they first focus on Internet marketing and bringing new customers to the site before perfecting detailed category management or implementing Pay pal. eBay is flexible enough to approach each country differently and to tailor the site to that country’s need.I think that this was definitely a good strategy. It will enter the company into areas of tremendous profit potential. The expansion, although challenging, will add to eBay’s product; online buyers and sellers. eBay promoting the new Buyer Protection Program online

4. What lessons on developing successful e-commerce projects can be gained from the information in this case?

Ans. Focus on what the customer needs as opposed to what the company wants to provide

Successful e-commerce projects are those that develop once and take advantage of economies of scale and mass-customization to provide localized content within a globalized infrastructure

As the capabilities of the Web increase (in terms of what is able to do as opposed to its traditional role) companies need to meet new standards of functionality above and beyond static web pages and slow response times

Page 3: Case Study on Ecommerce

Additional Readings

http://www.online-commerce.com/tutorial.html

http://goodpractices.com/#STRONG

http://www.ratz.com/featuresgood.html