Case study on ebay.com - Assignment

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Structure of Business

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
QUESTION 1. PESTLE Analysis of eBay and factors to be considered in decision making for ..3
starting online business...............................................................................................................3
QUESTION 2. Legal frameworks to be considered in decision making process.......................5
QUESTION 3. Sectors contributing in UK economy.................................................................7
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................12
APPENDICES....................................................................................................................................14
REFLECTION..........................................................................................................................14

INTRODUCTION
Business structure is defined as a part of organisation having legal recognition as per the
jurisdiction provided with the characteristics of legal definition. It can be in the form of partnership
business, non profit companies, limited liability company etc. The present report is based on the
case study related to eBay, which is an American multinational e-commerce company. eBay is
engaged in business of rendering consumer to consumer and business to consumer sales via
website. The report will present PESTLE analysis on eBay company along with the factors to be
considered while starting a new online business. Discussion related to strength and weakness of
different legal frameworks will be shown in report. At last, it will disclose online business ideas
which can be operated in three sectors with in UK.
MAIN BODY
QUESTION 1. PESTLE Analysis of eBay and factors to be considered in decision making for
starting online business.
PESTLE Analysis helps eBAy in determining all the external factors which are creating an
influencing impact on the strategic management in the online business operations.
1. Political: In case of online business operations, political risk in form of political instability
is considered as one of the most important macro environmental factor which affects the
functioning of online business services. Changes in existing political forces, government
regimes creates impact on the decision making process of the company. Strict trade
regulations, tariffs and rules has to be complied with for rendering services online, violation
of which can lead to decrease in customer and market share with low profit margins
(Rastogi and Trivedi, 2016). Also, eBay operates in number of countries which has made it
expose to numerous political environment changes and political system risk as well.
2. Economic: Factors impacting the working of eBay includes Inflation rate, taxation policy,
foreign exchange rates, economic performance of the country. It affects the aggregate
demand and supply of the company on the global basis. The intervention of government and
other department in free market and its related services affects the profitability figure of
company. If the country in which eBay is carrying on its business operations is facing drastic
changes or fluctuating trends in the exchange rate, economic growth rate, interest rate etc. it
will be very difficult to make future projection related to sales and revenue amount.

3. Social: Demand and supply forces of market depends largely on demographic conditions,
education level, cultural and attitudes behaviour of the country in which it is conducting its
business operations. With the rise in the use of internet activity and online services, eBay
has the opportunity to grow its e-commerce business operations across the globe with use of
internet. Also, customer feel more convenient with online services and prefer for it as it
provide ease and convenience. High quality services along with environment friendly
products is highly demanded by customers nowadays, which has to met for retention and
satisfaction of customer.
4. Technological: With change in technological factors, new and better improved techniques,
innovation of methods or processes eBay has to face many challenges from rivalry firms in
the market for sustaining in these competitive world. Rise in mobile phone use, increase in
competition with technological innovation and advancement etc. created huge competition
for eBay. The company should focus on improving its business technology, mobile
applications, online portal for smooth functioning of its business operations and retention of
more customer in the online market across the world.
5. Environmental: Change in the natural environment, weather condition, climatic changes
affects the business performance of eBay. Many customers are now preferred environment
friendly products and are more health conscious, which has to be met by eBay by bringing
in all required changes and making timely delivery of it (Widya Yudha, Tjahjono and
Kolios, 2018). Company should focus on making sustainable use of resources in its business
operations. Online services or e-commerce business is considered as one of the best suited
business structure as it doesn't impact the environment and as doesn't get influenced by
changes in the environmental conditions.
6. Legal: eBay has to comply with all the legal rules, regulations and standards which are
applicable to the industry environment. The functioning of eBay gets affected by all the
government policy changes in the area where it is performing. Any change in the e-
commerce regulations and business standard affects the profitability situation as well as
customer base of the company resulting in decline in the market share.
For starting any new business or business venture either online or offline, macro as well as
micro environmental factors has to be taken into consideration for better functioning of business
related operations. Following are the factors which should be considered in decision making process
for starting an online business:
1. Having a legal business idea and thought process: For starting any business, one should

have an idea or thought of what to start as a business. The thought or idea generated in the
mind of business venture should be legal and capable of being performed. Along with
fruitful business idea, decision has to be made for arrangement of funds and managerial
skills.
2. Proper understanding of customer taste and preferences: Before entering into any
market, one should first assess the taste and preferences, needs and desires of customers of
that market, and then proceeds further. This will help the business in making more profits
with strong customer base by grabbing of business opportunities on time and seeking
competitive advantage as well.
3. Focusing on determining the current and future market demand: If business venture is
aware of current market trend, demand factors, then it will help in making emphasis on the
meeting the core requirement of the market (Atighechian and et.al., 2016). Focus should be
made on first understanding the market properly to make better sales and more profit
margins over the period of short time.
4. Assessing strengths, skills, weaknesses on time: Before starting any business operations,
one should be capable of understanding its own strengths, skills, talents which can be used
in making business expansion. A business plan should be form so as to make proper
projection of sales, revenue and cost expenses with the limited amount of available business
resources.
QUESTION 2. Legal frameworks to be considered in decision making process.
The term legal framework are concerned with all the principal laws related to the protection
and use of personal information. It covers framework related to the Data Protection Act 2018, the
Human Rights Act 1998, the Freedom of Information (Scotland) Act 2002, the GDPR and other
legal frameworks. With the help of legal framework and policies, eBay is able to define a set of
standards and business practices which will help in achieving business related goals and objectives
in the near future.
Types of legal frameworks to be considered are as follows:
1. New GDPR Framework – It stands for The General Data protection regulations which is a
regulatory framework in relation with European Union law on data protection, security and
privacy for all the individual person or citizens of the European Economic Area and the
European Union. The main aim of this framework is to provide control to every individual
citizen in the context of personal data and information (Mustafa, Pflugel and Philip, 2019).
It helps in providing safety to online data transaction by ensuring online privacy properly.
Every business organisation should ensures that, all the data and information related to its

clients and other customers of private, professional nature should be protected from
accessing by others.
Strengths Weaknesses
 With the help of this framework,
business organisation can improve the
security measures related to cyber world
(Wagner and Benecke, 2016).
 By continuously upgrading security
system, there is less chance of data leak
and helps in gaining customer faith.
 The biggest weakness of GDPR
framework is related to the cost. The cost
of compliance of data protection
measures is very high which directly
increases the cost of business operations
of the company.
 On non complying with GDPR
framework, it results in non compliance
penalties.
2. Consumer Right Framework – It focuses on protection of consumer by stopping unfair,
deceptive and fraudulent trade and commercial practices as carried on by many
business organisation. The rights of consumer can be protected by collecting all the
complaints, conducting of detailed investigation, suing the default company as well as
the individual person (Alsmadi and Alnawas, 2018). Legal proceedings are made
against those people and companies which has broken the laws, rules as set defined by
the regulatory body.
Strengths Weaknesses
 It helps the consumer in getting detailed
information about the product and
services in which the company is
dealing.
 The consumer protection framework has
improved the position of consumers or
made their everyday lives easier.
 A consumer can seek redressal under this
framework only if suffered from loss or
damage because of any unfair trade
practice or deficiency in service made by
the trader (Adler, 2016).
Funding option available are as follows:
1. Bank loan – Any loan or borrowing taken from bank and Non banking financing companies

is considered as one of the best source for the business organisation. The loan amount
granted by any bank and NBFCs can be used for purchasing of inventory & equipment,
meeting working capital requirement of the business or in fulfilling the fund requirement for
expanding business operations etc. Generally, bank provides two types of loan i.e. Working
capital loan and other is funding. Working capital loan is related to business cycle which is
required for generating revenue (Andersen, Duffie and Song, 2019). In case of funding,
bank first share the business plan along with the valuation details & project report and on
this basis loan is sanctioned.
2. Savings – By using personal savings or money, one can start its own business at a small
level. It is considered as a very basis source of funding as in this individual is not required to
ask for financial assistance from any other. Also, it is the most flexible form as borrower and
lender is the same person, so there is no need of repayment of fund.
3. Venture capitalist – With the help of venture capitalist, funds can be arranged for business.
Venture capitalist are those professionally managed funds whose role is to invest in
companies which are lacking with the financial as well as monetary resources but have
sound and strong business ideas. It is best source for small business which are inspiring to
growth fast by making proper use of available business resources.
QUESTION 3. Sectors contributing in UK economy.
The sectors which are contributing mainly to the UK economy are Service,
Manufacturing, Construction and Tourism. Online business can be started in three sectors
such as Service, Manufacturing and Construction.
Basis Service Sector Manufacturing Sector Construction Sector
Meaning This sector is engaged in
production of intangible
goods. The main emphasis of
this sector is on rendering
services instead of goods and
products. Also, known as
Tertiary sector which is the
third tier in every three sector
economy.
Manufacturing sector includes
those industries which is
involved in the manufacturing
as well as processing functions.
This sector emphasizes on
development of new commodity
by adding some value to
existing one or making some
new creation.
The industry related to the
Construction sector are
mainly concerned with the
preparation and
construction function of
real estate properties,
building and other
construction work i.e.
making some alteration in
the same building etc.

(B'far and et.al., 2017).
Comprises It includes services industries
of different types such as
warehousing and truck
transportation services,
information sector services,
commodities and other
investment related services,
professional, technical and
scientific services, waste
management services, health
care and social support
services, arts, entertainment
and recreation related services
(Wheelen and et.al., 2017).
Are categorised into different
types such as engineering
industry, construction industry,
electronics industry, chemical
and metal industry, energy
industry, textile industry, food
and beverage industry,
metalworking industry, plastic
industry, transport and
telecommunication related
industry.
It includes mainly three
parts:
1. Construction involving
heavy and civil
engineering work.
2. The construction
function related to large
projects such as bridge,
road, etc.
3. General construction
work.
Works related to building
of real estate such as
residential or commercial
real estate assets, etc.
Construction work of
projects involving
speciality trades.
Construction works related
to building up of
specialized items such as
electric related works,
works on woods etc.
Function It is known as the third
economic sector which is held
responsible for largest
contributing portion to the
economy of the country and
also to the economy's business
activity. This sector consist of
industries which are providing
services to other business
Manufacturing sector industry
are considered as one of the
most important part of the
economy development. It
employs large number of labour
as well as work force and
produces goods, materials which
is required by different sector of
the country such as national
It helps the country in
setting up of significant
infrastructure facility in
form of roads, railways
and buildings.

organisation as well as to the
final consumers of the country
(Ganong and Liebman, 2018).
infrastructure and defence.
Contributes to UK economy:
1. Service Sector: The service sector focus is on interaction between all the individual people
rather than the emphasizing on the production of goods. In recent time period most of the
service industries has to still rely on production of goods in the primary and secondary
sector so as to offer their valuable services. But with the development of economy, many
business processes now can be industrialized and automated. This sector is dominant and
leading sector of the UK economy which contributes approximately 80.2% of GDP in the
year 2016 (Economy of United Kingdom, 2019). The service industry in the UK includes
different types of industries such as finance and business related services, consumer focused
industries including retail, food & beverage and entertainment.
2. Manufacturing Sector: United Kingdom is eleventh biggest manufacturing nation in the
world. The main sector which contributes to UK economy is related with the manufacturing
and production function of the civil and military aerospace, the pharmaceutical industry. By
emphasizing on implementing the concept related to eco friendly environment, most of the
world manufacturing industries have taken preventive measures to mitigate and reduce
environment pollution. It also ensures that all the manufacturing industries across the world
are abiding by the eco friendly norms and standards. The manufacturing sector plays an
important role in the economic development of UK by contributing around 21% to the total
GDP. This sector has resulted in generating of more employment opportunities, makes
introduction of the latest techniques and technology, high and real earnings from the
transaction of shipments etc.
3. Construction Sector: The construction sector industry of UK contributes a gross value of
£86 billion to the UK economy as per the year 2011. Around 194,000 construction firms of
UK in 2009 out of which around 75,400 employed only one person and 62 employed over
1,200 people (Economy of United Kingdom, 2019).
Two HR policies important for modern workplace are as follows:
1. Health and Safety policy – The main aim of this policy is to provide occupational safety to
all the employees and workers of the company by adhering all the health administration and
Occupational Safety and Health Act. It is the duty of every business organisation to provide

a better work as well as workplace to its employees and workers which should be free from
recognised, serious and dangerous hazards and risk factors (Holt and Allen, 2015). The Fair
Labour Standards Act contains all the rules and regulations related to the employment of
young workers which are under the age of 18 years. It has also mentioned the minimum age
restrictions with the point of view of employment, restriction related to the time of day
youth will work and kind of jobs they will perform.
2. Equality and Diversity policy – This policy focus is on maintaining of fair trade and
business practices in the workplace. Employees should be treated fairly in respect of
following terms:
1. Race (colour, nationality, place of origins);
2. Sex (gender, marital status);
3. Religion and religious beliefs, values;
4. Age factor; and
5. Disability
This policy is applicable in each business aspect such as at the time of recruitment and selection,
training and development, reward, recognition and promotional activities etc. (Equality Act 2010)
Each business employee and worker should be treated with same respect and in the same manner
irrespective of the designation and job post.
CONCLUSION
From the above report it can be concluded that structure of business should be designed in sound
and appropriate manner so that communication process can be made easy. The business structure of
every company is required to be in the form as it has been defined viz. partnership business,
corporates, limited liability business, sole proprietorship business, not for profit organisation etc.
The present report is based on eBay which is one of the America's multinational e-commerce
company having its business operations across the world. The report has discussed about PESTLE
analysis made on eBay company for assessing all the macro environmental factors which are
influencing the business functions. With the help of pestle analysis, several factors are considered
for decision making such as market trends, customer demands and preferences, availability of
business as well as financial resources etc. for starting of an online business operations. Also, with
the help of legal frameworks, new online business is able to understand the concept of all applicable
rules and regulations. Legal frameworks in form of GDPR and consumer right and making better
compliance of such frameworks can help the business in gaining more profit, market share as well

as help in building of strong customer base in the near future.

REFERENCES
Books and Journals
Adler, J. H., 2016. Compelled Commercial Speech and the Consumer Right to Know. Ariz. L. Rev..
58. p.421.
Alsmadi, S. and Alnawas, I., 2018. Consumer Rights Paradigm: Development of the Construct in
the Jordanian Context. Journal of Business Ethics. pp.1-18.
Andersen, L., Duffie, D. and Song, Y., 2019. Funding value adjustments. The Journal of Finance.
74(1). pp.145-192.
Atighechian, G. and et.al., 2016. Are Macro and Micro Environment Affecting Management of
Fresh Water Resources? A Case from Iran with PESTLE Analysis. Materia socio-medica. 28(4).
p.307.
B'far, R. and et.al., Oracle International Corp, 2017. Techniques for semantic business policy
composition. U.S. Patent 9,672,478.
Ganong, P. and Liebman, J. B., 2018. The decline, rebound, and further rise in SNAP enrollment:
Disentangling business cycle fluctuations and policy changes. American Economic Journal:
Economic Policy. 10(4). pp.153-76.
Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
Holt, A. S. J. and Allen, J., 2015. Principles of health and safety at work. Routledge.
Mustafa, U., Pflugel, E. and Philip, N., 2019, January. A Novel Privacy Framework for Secure M-
Health Applications: The Case of the GDPR. In 2019 IEEE 12th International Conference on
Global Security, Safety and Sustainability (ICGS3) (pp. 1-9). IEEE.
Rastogi, N. I. T. A. N. K. and Trivedi, M. K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and Technology
(IRJET). 3(1). pp.384-388.
Wagner, J. and Benecke, A., 2016. National Legislation within the Framework of the GDPR. Eur.
Data Prot. L. Rev.2. p.353.
Wheelen, T. L. and et.al., 2017. Strategic management and business policy (p. 55). Boston: pearson.
Widya Yudha, S., Tjahjono, B. and Kolios, A., 2018. A PESTLE policy mapping and stakeholder
analysis of Indonesia’s fossil fuel energy industry. Energies. 11(5). p.1272.
Zahari, A. R. and Romli, F. I., 2018. Analysis of suborbital flight operation using PESTLE. Journal
of Atmospheric and Solar-Terrestrial Physics.
Online
Consumer protection framework. 2019. [Online]. Available through: <https://www.ftc.gov/about-
ftc/bureaus-offices/bureau-consumer-protection>.

Economy of United Kingdom. 2019. [Online]. Available through:
<https://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom>.
How Pierre Omidyar Turned An Idealistic Notion Into Billions Of Dollars. 2018. [Online].
Available through: <https://www.inc.com/magazine/201312/pierre-omidyar/ebay-inspiration-
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PESTLE analysis of eBay. 2019. [Online]. Available through: <http://panmore.com/ebay-inc-pestel-
pestle-analysis-recommendations>.

APPENDICES
REFLECTION
From the above report it has been understood that with the help of proper and legal frameworks,
every business organisation is able to make more profit and can earn high customer satisfaction
level as well. eBay is a multinational company of America which is indulged in online business or
e-commerce business but has to face macro environmental forces as well which directly contributes
to adverse impact on its business functions. At last, I had come across with different sectors of the
economy viz. Service, Manufacturing, Construction and Tourism which is contributing in the UK
economic development and growth.