Analyzing Business Structures: A Case Study of eBay

Desklib provides solved assignments and past papers to help students succeed.

1
THE STRUCTURE OF BUSINESS
The Structure of Business
Student’s Name:
University Name:
Author’s Note:

2
THE STRUCTURE OF BUSINESS
Table of Contents
Question 1..................................................................................................................................3
Pestel analysis........................................................................................................................3
Question 2..................................................................................................................................4
Relative strengths and weaknesses of GDPR and CCPA......................................................4
Funding for business..............................................................................................................5
Question 3..................................................................................................................................6
Suitable sectors for business ideas.........................................................................................6
Comparison between the sectors............................................................................................7
HR policies and their importance...........................................................................................8
Reflection...............................................................................................................................9
References..................................................................................................................................9

3
THE STRUCTURE OF BUSINESS
Question 1
Pestel analysis
The online portal eBay was just a small platform, which started from nowhere and is now a
multibillion-business empire. At present, there are many factors, which affect the business
functions and operations of eBay. Based on the case study provided, these factors are
mentioned in the table below.
Factors Details
Political factors  The privacy policy formulated by eBay does not provide assurance of
safety of the private information of the customers.
 As it is an online platform, it is prone to safety and privacy breaches
and thus the information of the sellers and customers are not safe.
 The governmental policies and agreements regarding these privacy
issues and safety breaches may affect the business of eBay.
 For avoiding any kind of violation of governments’ policy and for
maintaining safety, the selling and buying of firearms is prohibited on
eBay.
Economic
factors
 As mentioned in the case study, the platform of eBay provided base to
the sellers spread across the world. This facilitates the availability of
every kind of products ranging from various product ranges.
 The huge availability of product provides great options for the
customers on eBay (Inc.com, 2019).
 The base of customers and sellers is not confined based on locations.
 Many of the sellers have earned millions of fortunes by selling their
unique products on the online platform of eBay.
Social factors  Online portal of eBay has provided a platform for young entrepreneurs.
That means eBay has promoted entrepreneurship in one way.
 The prices of products are set based on binding and thus the prices
might be lower and even higher than the actual prises available on other
sites.
 It has aided the emergence and growth of many small brands.
Technological  The online platform of eBay is totally depended on technology for

4
THE STRUCTURE OF BUSINESS
factors purposes like transactions, data storage etc.
 The company focuses on adding all the technological advancements and
latest features on the sites for making its user friendly.
 However, it is easy to scam on eBay and it’s easy for the scammer to
escape and this can harm the customers of eBay (Goddard, 2017).
Legal factors  There have been transaction of unlawful products on eBay, due to
which, the company has to face heavy consequences.
 Many of eBay’s customers have been scammed and their private
information has been misused by the scammers.
Environmental
factors
 EBay offers a great platform for sellers to sell green products and goods
(Inc.com, 2019).
 As eBay is an online platform, it is very eco-friendly method of
shopping, which eliminates the creation of paper bills and trashes. This
makes it eco-friendly in nature.
Table 1: Pestel analysis
(Source: Learner)
According to Garratt et al. (2012), in order to start a new business, few things are to be
considered. The first thing to be considered is the opportunity available in the market. This
will help in forming effective business strategy. The next important thing to consider will be
the amount of rivalry offered in the market and solutions for facing it effectively. Then it’s
necessary to define a well estimated budget with cost planning included in it. Then another
necessary factor will be developing team and arranging skilled people for initiating the
business venture (Drucker, 2012). It is also required to analyse the factors like scarcity and
choice of the products, in which, the availability of the products offered is to be analysed. If
the products offered are scarce, then there will be more chances for the success of the
business venture. In this way, it would be much easier to develop a realistic plan and take
well proof decision regarding the business.
Once the business will be started, the focus will be divided on controlling and handling those
factors, which may affect the success of business initiated. The first and the most important
factors will be the types of services and products offered in the business. If the product and

5
THE STRUCTURE OF BUSINESS
services offered to the customers are good and are of standard quality, then they will
definitely succeed in creating good impression in front of the customers. Therefore, it would
be necessary to focus on the quality of product and services offered to the customers. Then,
as stated by Yu et al. (2014), the next significant factor will be related to opportunity cost in
which, the best of available opportunities will have to be selected in order to carry out the
business successfully. The success of newly started business highly depends over the type of
opportunity selected. Then, it would be necessary to maintain balance between the supply of
products and demands of the customers. Through bringing all these factors in the favourable
side of the business, it would be easier to ensure the success of the newly initiated business
venture.
Question 2
Relative strengths and weaknesses of GDPR and CCPA:
In order to start business, it is necessary to be acknowledged of the various legal frameworks.
As observed from the case study on eBay, privacy has been the main centre of concern for the
company. As privacy and security of customer's data is a major issue for the online
businesses, it is necessary to abide by the privacy laws such as CCPA and GDPR. Therefore,
the following table has been outlined for determining the relative strengths and weaknesses of
the CCPA and GDPR.
Relative strengths of GDPR  Scope of GDPR is much wider as compared to the
scope of CCPA.
 GDPR has no requirements regarding minimum
revenues
 GDPR has wider territorial reach.
 GDPR emphasises on the data of a recognisable
individual (Isabelle, 2013).
 Parental consents under GDPR have no limitation
 GDPR has no limitations regarding written
disclosure.
Relative weaknesses of GDPR  It does not include information related to the devices
and household of the individual
 Rights under GDPR are limited and are only applied

6
THE STRUCTURE OF BUSINESS
when they meet one of its conditions.
 GDPR provide confined and less broad ground to
business for refusal of requests.
Relative strengths of CCPA  CCPA also emphasises on the data of a recognisable
individual just like GDPR (Lottis and McCracken,
2014).
 CCPA encompasses information related to the devices
and household of the individual
 Rights under CCPA are in broad range.
 CCPA provides relatively broad base to the business for
refusing requests.
Relative weaknesses of CCPA  Scope of CCPA is relatively less wide.
 CCPA consists of requirements regarding minimum
revenues
 CCPA has relatively less territorial reach
 Parental consent under CCPA is limited to sales of
personal information.
 Rights of CCPA are limited to written disclosure,
Table 2: Relative strengths and weaknesses of CCPA and GDPR
(Source: Learner)
All these points stated in the above table needs to be acknowledged before starting the
business venture.
Funding for business
Now, for initiating any business venture, there is a great requirement of capital investments.
However, arranging sufficient amount of fund for investment is not possible by the individual
and thus various sources are referred for acquiring funds and capitals for investing in the
business. Cullen et al. (2013) has mentioned that generally, there are some specific sources of
fund for initiation of business and these sources will be used for acquiring funds for
beginning an online business. The sources and method for fund acquisition, which can be
used, are as follows:

7
THE STRUCTURE OF BUSINESS
Bank loans:
This is the most widely accessed source for accusation of funds for starting business. Banks
provides working capital loans or funds to the individual based on their ability and plans of
performing business (Martin and Kung, 2018). This source of fund will be appropriate only
when there is guarantee of success in the business.
Business accelerators and incubators:
This source of funding ash gained significant amount of fame in major and developed cities
of the nation. In this method, the accelerators programs as well as the incubators programs
are used for acquiring funds and these programs also mentors the individual and support in
running the business effectively (Zimmerman and Yahya-Zadeh, 2011).
Crowdfunding:
This source of funding is used by most of the entrepreneurs for initiating their online
business. Crowdfunding has been practiced from many years and helped the individual, who
had brilliant business plans but this lacked sufficient amount of capital for investment
(Sorensen et al. 2013). In this kind of funding, the description of the business is provided on
the online sites of the business and people who use the products and the services and are
interested in the business, and then they donate some funds. In this way, funds are generated
for maintaining the flow or the cycle of the online businesses.
Angel investment:
In order to initiate the inline business, this source of funding can also be used by the
individual. This funding is an investments made by the individuals, who are called as angel
investors in general terms. These investors are the individuals, who possess surplus capital
and have strong desire of making investments in the business (Hymel et al. 2011). Along
with making investment, these angel investors also advise and guide the entrepreneurs and
thus contribute majorly in the smooth functioning of the business. Many of the online giants
like Google and Alibaba were funded through this technique. Therefore, this technique can
also be used for starting the online business.
In this way, all these sources and techniques of funding along with other sources like venture
capital, microfinance etc. will be referred for generating funds for initiating the online
business start-up.

8
THE STRUCTURE OF BUSINESS
Question 3
Suitable sectors for business ideas
Apart from making decision regarding the funds and legislative frameworks, it is necessary to
decide the favourable and suitable sector of UK for initiating the online business. There are
various sectors in UK, in which the online business start-up can be initiated. However, the
three of the most appropriate sector, selected for performing online business are retail,
hospitality sector and finance sector.
Retail sector:
This sector comprises of all those kind of business in which, products are sold by the retailer
to the customers. The retail sector of UK mainly comprises of seller, retailers, shops, malls
etc. Retail sector contributes around 5% of GVA of United Kingdom, which is estimated to
be around 92.8 billion-pound sterling. As opined by Janta et al. (2011), it makes the 5.6% of
the business of United Kingdom and around 2.8 million employments in the year 2017.
Online business like selling of goods and products online and providing service through
online websites will be the best ideas for entering in this sector.
Hospitality sector:
This sector comprises of those business, in which, profit is earned by serving the customers.
It comprise of various business categories like lodging, event planning, tourism and other
such categories. The hospitality sector of United Kingdom is one the major contributor of its
economy. Various businesses under the hospitality sector of UK have generated 17% of UK’s
employments and have given the contribution of 8.7% in the economy of United Kingdom
(Team, 2017). In order to initiate online business in this sector, websites for booking hotels or
for comparing hotels can be developed and programmed.
Finance sector:
Finance sector is also referred as financial sector that encompasses all those business and
companies, who provide financial services in United Kingdom. According to Abdulsaleh and
Worthington (2013), online business can be initiated in this sector by forming websites for
providing financial consultancies or any other services related to finance.
Financial sector has also majorly contributed in the growth of the UK’s economy. The
financial sector of UK has contributed around 119 billion pounds in the economy that is the

9
THE STRUCTURE OF BUSINESS
6.5% of the total economy. Financial sector of UK has generated employment for around 1.2
million of the population of United Kingdom.
Comparison between the sectors
The overall difference between financial sector, retail sector and hospitality sector of UK can
be understood from the following table of comparison.
Retail sector Hospitality sector Finance sector
It deals with sales and retail of
goods and services to the
customers.
It is provision of comfort and
friendly treatment to the
customers by satisfying their
needs.
It mainly consists of entities
providing economic and
financial services to people.
There is buying and selling of
both tangible and intangible
products.
There is provision of hospitality
services, which are mainly
intangible.
Advices and services are
provided to the customers,
which are intangible.
There is direct interaction of
service provider and service
receiver.
Include both direct and indirect
interaction of services provider
and customers.
Very less direct interaction is
facilitated and mainly business
runs on indirect interaction with
the customers.
There is no significance of
building relations between the
involved parties.
Interrelationship is very
significant in hospitality sector
Good interpersonal relations
enhance the provision of
financial services.
Generated employment for 2.8
million population of UK
Generated employment for 2.4
million population of United
Kingdom
Generated employment for 1.2
million individual of UK
Contributes 5% of United
Kingdom’s GVA
Contributes 8.7% of UK’s
economy
6.5% of total economy is
contributed by this sector.
Table 3: Comparison between sectors
(Source: Learner)
Now, it is a well-known fact that the success of any firm, enterprise or business is mainly
dependent over the behaviour and attitude of its employees or workforce. For ensuring that

10
THE STRUCTURE OF BUSINESS
the workforce delivers better performance and facilitates the development and growth of the
business, there is a keen requirement of developing appropriate HR (Colgan, 2011) policies.
Therefore, several HR policies will also need to be developed for enabling effective
workforce and human resource management.
HR policies and their importance
The HR policies, which are to be discussed further, are HR policies for health and safety and
equality and diversity policy. Both of these policies are significant polices as they are related
to the most basic requirements of the employees and the workforce.
1. Health and safety policy:
Mason and Harrison (2015) have noted that this policy is regarding the provision of safe
working environment to the employees for preventing any kind of damage to their health.
There are many times, when the safety of employees along with their health is on stake at
workplace. Therefore, it becomes very vital to ensure that their health and safety is not
compromised at all. This will help in provision of job satisfaction to the employees and will
boost their motivation at workplace (Bumacov and Ashta, 2011). As a result, they will be
able to work more efficiently and in an effective manner, which will ultimately aid the
growth and success of the business.
Importance of health and safety policy at modern workplace
Health safety policy helps in reducing workplace stress to the employees. As stated by
Belleflamme et al. (2014), there are many employees, who get illness worked for long hours.
Therefore, this HR policy will help the employees in taking rest breaks, which will help them
to rejuvenate the energy for working again. Another importance of this policy will be that the
employees will be well aware of the safety hazards related to work place. Under the health
and safety policies, employees will be informed of the hazards and accident that can occur at
workplace. This will help the employees in preventing those hazards from occurring.
Employees also are trained for using machineries and equipment in proper way. Through
training, employees will be trained for avoiding the mishandling of machineries, as they are
the main cause of accidents at workplace. Practicing health and safety policies at workplace
ensures alertness at workplace, which helps in avoiding or observing any kind of fault and
safety concern (Liao et al. 2015). Along with these many importance, Health and safety
policies are important as they ensure proper mechanical assistance, making emergency
arrangements and provide all the necessary tools and tricks for protection of the employees.

11
THE STRUCTURE OF BUSINESS
2. Equality and diversity policy
This HR policy protects employees from any kind of exploitation at workplace. The
employees are protected against any kind of discrimination based on employees cast, race,
culture, background, etc. There are many times, when the talent and skill of employees get
waste due to inequality and discrimination at workplace.
Importance of Equality and diversity policy at modern workplace
Equality and discrimination policy is very important and vital at modern workplace as they
protect employees from being discriminated based on their gender, cast, age, culture or any
other race. This policy helps those employees that are skilled and talented but are prone to
become the prey of these misconduct at workplace, diversity on the other hand helps in
creation of effective business plans due to diverse workforce at workplace (Loeppke et al.
2015). This in turn develops the relations between the employees and gives rise to healthy
working environment. In this way, equality and diversity policies are helpful in fostering
good practices and ethics at workplace and thus are important for the modern workplace.
Reflection
In the case study of eBay, I learnt how a small and effective business idea could give rise to
gigantic business empires as eBay. The main qualities of the founder of eBay, Pierre Omidyar
were that he was creative and innovative in nature. This helped him in developing a small
business platform and taking it to several heights. Many of my learning from the case study
of eBay and Pierre Omidyar will be very helpful for me during the initiation of my online
business start-up.
Along with the learning from the case study, there are other vital things, the rivalry in market,
concepts like opportunity cost, scarcity and choices and many such concepts are to be
considered by me. Besides, legal framework of GDPR and CCPA, which are to be abided in
my business are also analysed along with their strengths and weaknesses. The various sectors
of UK, comprising of retail, fiancé and hospitality sector are suitable sectors for my business
start-up. As per my analysis, the most suitable sector will be retail sector as my business ideas
are more suitable for selling and retailing of products. Therefore, through making proper use
of HR policies and guiding workforce at workplace and by forming effective business plans
and decisions, I will surely be able to make a successful start of my online business start-up
and may take it certain heights in future.

12
THE STRUCTURE OF BUSINESS