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How does eBay attempt to keep their customers satisfied and keep the level of quality at best possible rate?
Corporate-Level Strategy, Business-Level Strategy, and Business Model of Corporate Level Strategy: eBay is a very diverse company. The service they provide is appealing to both individual customers as well as large corporate customers. Hobbyist and collectors, casual sellers, professional buyers, and corporate sellers all belong to the eBay customer base. The products that are offered on the eBay website range from shoes to automobiles. This makes their product line very diverse as well. The creation of eBay motors, eBay Real Estate, and the Live Auctions specialty site, as well as the acquisition of Half.com have all contributed to the growth and diversification of this company. In addition to diversifying their customers and their products, eBay has expanded their business by branching out into domestic markets as well. Business Level Strategy: eBay competes in the online auction industry using a broad differentiation strategy. By choosing this strategy eBay determined that the best way to achieve a sustainable competitive advantage over its rivals was to differentiate their service. The way in which eBay has set their online auction site apart from its competitors has lead customers to prefer their site over other online auctioneers and retailers eBay’s Broad Differentiation Strategy: eBay has created a one-stop-shopping experience that is appealing to large corporations, independent entrepreneurs, and individual buyers and sellers. They have created value through many facets of their business that appeal to their customers and differentiate them from the competition. The main ways that eBay differentiates themselves is through: 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. Why the Differentiation Strategy Works Best for eBay The users of eBay have many different preferences and needs depending on why and how they use the service. eBay has determined a way to satisfy their customers whether they are large businesses or individuals. By offering a wide variety of products, globally expanding, and creating a community for all customers to join eBay has created a distinctive value unmatched by its rivals. Analysis of eBay’s Business Model eBay’s business model was based on creating and maintaining a person-to-person trading community. This allows buyers to easily search for what they want to purchase. It also allows sellers to post their items minutes after they have registered. There are a few specific elements of eBay’s business model that they recognized as key to its success they are (as given in the case study): Being the largest online trading forum with a critical mass of buyers, sellers, and items listed for sale Its compelling and entertaining environment, which had strong values, established rules and procedures that facilitated communication between buyers and sellers Establishing programs such as Safe harbor to aid in disputes and to punish users who violate eBay Cost effective and convenient trading Strong community affinity An intuitive user interface that was easy to understand, arranged by topics, and fully automated By implementing their business model, eBay employed three main tactics. First, they looked to build strategic partnerships. Second, they looked for customer feedback to constantly make changes and improvements. Finally, they monitored its internal and external environments for possible opportunities. By doing all of these things, eBay was able to adapt to the changing ways and keep their customers satisfied. To be successful eBay must continue to mold and change their business model to satisfy its customers and keep the level of quality they employ to the highest degree possible. If eBay is able to do this they will continue to be successful. It is clear that eBay as a company is remaining the same or improving in each of aspect of the financial ratios reported above. These six ratios are critical to evaluation a company on several different levels. Also, it should be noted that eBay is relatively similar to the industry average. However, there is still not one category where eBay outperforms the industry average. Yet, the improvement eBay is facing, is a positive sign for the company that it will remain competitive on a financial level, if not pull ahead of the industry average. eBay S.W.O.T Analysis Strengths Weaknesses Largest online trading forum Sense of community Recognizable Brand Name Over 250 Alliances Partnerships with international companies Global reach eBay University Entertaining site Over 27,000 different categories Publicly Traded Zero inventory held by company No need for the traditional sales force Inability to measure illegal activity on site Inability to penetrate some foreign markets Lack of in depth descriptions of products Technology malfunctions Opportunities Threats Changing lifestyles of people Acquisition of Yahoo.com Continued international expansion Increasing use of the internet Expand community services Online thieves Increasing number of online auction sites Rapid growth of Amazon.com Increasing number of online stores 1/3 of internet users already registered on eBay Answer the Following:
1. How does eBay attempt to keep their customers satisfied and keep the level of quality at best possible rate?
2. Explain your views and learning of eBay’s Corporate Level strategy to overcome their Weakness and Threats. 2
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