Digital Business Report: eBay's Operations and Environment

This report provides a comprehensive analysis of eBay's digital business operations. It begins with an introduction defining traditional and digital businesses, followed by a comparison of their similarities and differences. The report then delves into eBay's business model, including a detailed SWOT analysis to identify strengths, weaknesses, opportunities, and threats. It explores digital business activities like digital marketing and the use of sensor data, and examines eBay's mode of operations, including quality management and refund policies. The digital business environment is analyzed through micro, meso, and macro perspectives, along with an examination of the marketplace. Porter's Five Forces model and a competition matrix are applied to assess the competitive landscape. The report concludes by discussing key growth factors, eBay's USP, external forces impacting operations, and a PESTEL analysis. Overall, the report offers a thorough examination of eBay's strategic positioning and operational dynamics in the digital business environment.

DIGITAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
Business name (eBay): .................................................................................................................1
Traditional Business versa Digital business ...................................................................................2
Define the traditional business ...................................................................................................2
Define the digital business..........................................................................................................2
What are the similarities and differences?..................................................................................2
Digital Business models...................................................................................................................3
SWOT analysis of business models:...........................................................................................3
Digital Business Activities:..............................................................................................................4
What are digital business activities.............................................................................................4
What digital technologies dose that company employ................................................................4
Mode of operations .........................................................................................................................5
Digital Business Environment ........................................................................................................5
Market place ....................................................................................................................................6
MESO: ........................................................................................................................................6
Porter's Five Force Model:..........................................................................................................6
Market Growth.................................................................................................................................7
Competition matrix: ...................................................................................................................7
Key growth factors for digital business...........................................................................................7
USP: ...........................................................................................................................................7
What is allowing company to grow............................................................................................8
External forces creating impact on business operations .................................................................8
USP: ...........................................................................................................................................8
PESTEL: ....................................................................................................................................8
CONCLUSION................................................................................................................................9

INTRODUCTION
The digital business means a type of business that utilizes technologies in their
organization to innovate new business in its external and internal operations. eBay is a
multinational American company situated in California and is founded by Pierre
Omidyar (Bärenfänger and Otto 2015). In this report it includes meaning of traditional
and digital business as well as their similarities and differences which has guide the firm
to choose either traditional or digital business patter. Here SWOT and Pestel analysis
highlights business strengths and weakness so that they can be reduced by using
appropriate strategy. The mode of operations like Micro,Macro and meso helps the firm
to better understand the dynamic environment and huge market ratio can be captured.
Porter's five force model and competition matrix directly help the organization to
understand the the degree of power either buyer, supplier, threat. Rivalry are holding
before entering into the new market. Product having USP quality in its product helps the
firm to sustain in the new market for longer time duration.
Business name (eBay):
eBay is a American multinational online store holding customers base of 233
million across the global village and the firm's slogan is “By it, Sell it and love it” ( Darics,
2015). This firm was founded by Pierre Omidyar around 23 years ago in California, San
jose. Ebay business type is public and is serving it's services across the globe. The
various products served by eBay are toys, books, sports, computers, electronics etc.
across the globe. Number of employees working around the globe are around 14,100
till the year 2017. This organization is having its own websites by the name of
www.ebay.com. Some of the services of this business are, free shipping, eBay Maplt,
My world, Skype Buttons etc. It is a multibillion dollar business serving across 30
countries around the globe. Firm has been globally successful in the digital world
because it is successful in managing all the online sites of shopping where
businessmen and people can buy and sell large variety goods and services worldwide.
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Traditional Business versa Digital business
Define the traditional business
The word Traditional business can be explained as a local stores which offers
products and services to it's local customers where people approach physically to
purchase their product from the market. The main goal of this business is to generate
huge profits from the customers than actually firm spends. There are some promotional
tools, including Broadcast, referral, print etc. used by the traditional businessmen to
attract customers towards their product or services(Fleisch and Wortmann,
2015).Traditional business means customers have to physically appear at the stores to
purchase goods or services. Traditional business allows the buyer to physically taste,
feel the product before purchasing it.
Define the digital business
Digital Business introduces as a type of business that uses technologies as a
benefit in it's external and internal operations to generate huge amount of profits in the
market. Digital business means creating of new business by blurring physical and digital
worlds. Digital business does not allow the customers to physical examine the product
before purchasing.
What are the similarities and differences?
The differences and similarities between traditional and Digital businesses are as
follows:
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Basis Traditional business Digital business Similarities
Business
relationship
In traditional
business
relationship is linear.
In digital business
relationships are
end to end.
Delivery In traditional
business delivery of
products are instant
and quick.
In digital business
delivery of goods or
product take some
more time as
compared to
traditional business.
Target customers The main motive of
both traditional and
digital businesses is
to attract targeted
customers by
influencing them in
any way.
Goal Traditional and
digital business main
goal is to retain their
customers at any
cost toward their
product and grab
others loop hole as
their opportunities.
Digital Business models
SWOT analysis of business models:
SWOT (Strengths, weaknesses, opportunities and threat) analysis is done for
eBay firm to understand which steps need to follow to uplift the business and more
productive results can be achieved. SWOT is explained as follows:
Strengths: eBay is the leading online retail store in the world and it's primary
strengths are localization, payment system, brand reputation and focus on customers
needs and demand which has helped shareholders derive value from the firm (Horlach
and Schirmer, 2016). Organization is using information technology at a vast scale to
attract customers from various fields which ensures that eBay is ahead of it's
competitors.
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Weaknesses: eBay is offering the facilities of free shipping to it's customers due
to which the margin of profits is reduced and firm is not able to optimize cost because of
this strategy. Organization has limited number of business models dealing with as well
eBay put less emphasis on innovation which is the main drawback or weak point of the
business.
Opportunities: As many issues regarding privacy leaks can be seen in the
payment mode, eBay can use their own payment gateways to secure customers
privacy regarding payments. This can be an opportunity for company in the coming
year. Business associates can expand more sites globally which will give them an edge
in the competitive online retailing market.
Threat: The biggest threat to eBay is the pricing strategies due to which
business has to face lawsuits from the publishers and challenges in the retailing
industry (Laudon and Laudon, 2015). Firm should look into the concern matter to ensure
customers that online security and privacy are guaranteed.
Digital Business Activities:
What are digital business activities
The various digital business activities are as follows:
Digital marketing: To attract customers and also to grow in the global market,
eBay firm need to be more active in digital marketing. Company need to introduce
emails, digital coupons, virtual storytelling or ads etc. to uplift digital marketing in the
eyes of customers so, as to capture huge market share and maximum profits can be
generated.
Sensor data: Sensor data is used by many the top brands they strategically
place sensor data around their stores which directly connect with customers bluetooth
and retail app gets installed automatically in their phone. Firm can examine or see how
long customer use their websites, what they choose most, as well as personalized
discounts are also given on that specific information which help them to discover
product accordingly to their demand and is able to set goals on time (Laudon, and
Traver, 2016).
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What digital technologies dose that company employ
eBay company will actively use the digital marketing technologies to uplift the
firm in the global village. It helps the organization to expand customer base according
to needs and demand due to which profits can be maximize to a large extent. Digital
marketing helps to boost reliable branding in the eyes of customers as well targeted
audience can be spotted which directly helps to raise business productivity and
employees work effectively and efficiently to grab large market share of other business.
Mode of operations
Quality management: eBay provides quality product to its customers by keep in
mind the customers demand, needs and preferences which help the organization to pull
customers towards their product and encourage them to innovate new products in the
market.
Refunds and returns: eBay uses a proper policy of refunding products from
unsatisfied customers which helps the firm to stay connected with their product or
services. This organization should adopt certain strategies like, fixed timing for
exchange or return of product, no exchange of items in lieu of cash, help customers to
find something else if they are nit satisfied with the current product etc. to overcome
customer's loss as well financial loss.
Digital Business Environment
MICRO: Micro environment in digital business means those factors which are
affecting the functioning of the firm like, strategy, decision making and performance as
well. eBay growth and expansion is affected by micro environment which includes,
suppliers, distribution channels, competitors and customers as this factors affect the
functioning as well as decision making freedom. If this factors are not functioning well
than targets can not be achieved and profits can not be maximized.
MESO: It is a setting between macro and micro opportunities which help the firm
to grow globally. eBay uses the meso environment as it is the setting between both
macro and micro opportunities (Libert and Wind,2016). It shapes the business
framework and can be considered as it's policies, regulations, infrastructure, guidelines
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etc. It helps the business associates to capture huge market ratio and employees work
effectively to set standards for other competitors.
MACRO: Macro can be described in digital business as a condition like inflation,
fiscal policy, employment etc. that exists in an economy as a whole rather than specific
region. eBay does scanning of macro environment like, political factor, socio factor,
economic factor etc. before discovering new product in the market so that targeted
customers can be pulled to purchase their product and goodwill can be raised in the
market.
Market place
MESO:
It the mid path between micro and macro environment eBay uses this path in
market place to distinguished the customers in the global market. They design the
goods according to the policies, norms of the country so, that firm can sustain in the
market for longer time duration.
Porter's Five Force Model:
This model is used to examine the competitive forces that shapes every
organization and also helps in analysing the competition in industry. The model is
described as follows:
Bargaining power of buyers: The degree of buyers is high when the suppliers
are more and can pressure the suppliers to reduce their quality, prices and availability of
product (Matt and Benlian, 2015). There are certain factors that support the intensity of
the bargaining power of consumer in affecting eBay are, large availability of substitute,
low switching costs and more relevant information.
Bargaining power of suppliers: The degree of suppliers is high when suppliers
are less in the market and switching to other suppliers is not possible. eBay experience
the moderate intensity of the bargaining power of suppliers when there is small
population of suppliers, moderate size of suppliers and moderate forward integration.
Rivalry: The degree of rivalry is very strong as eBay is dealing with strong
competitors in the market. eBay experience high degree of intensity of competitive
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rivalry in the online industry because of the following reasons, when there is low
switching costs and more substitutes available in the market.
Threat to substitute: The degree of threat is high when same type companies
are prevailing in the market with some innovative product. eBay faces threat of new
entrants when there is more availability of substitutes products, Prices of the substitutes
are low in the market and switching costs is very low.
Threat of new entrants: Finance is the backbone of every business, small firm
has threats as they are not financial stable to compete in the market with top brands.
eBay need to be financial strong to sustain in the market and satisfy customers with
their service and product.
Market Growth
Competition matrix:
This term can be defined as a tool that helps or guide a firm to design or
establish your organization competitive advantages. It helps the firm to learn about the
opportunities of different brands from competitors, market segmentation, create
innovative products and frame or design effective marketing plan to meet the customers
needs and demands in the dynamic environment. The targeting customers are the
young generation from 20- 40 years and the product designed are according to their
needs and demand. The segmented customers are classified accordingly to attract
customers to purchase their product and employees can be guided accordingly to
achieve targets and employees can work more effectively and efficiently.
Market segmentation
Key growth factors for digital business.
USP:
The term USP(unique propositions selling) is a marketing concepts which
distinguished it's product from similar products in the market by it's characteristics or
features. eBay is dealing in diversified product line toys, books, sports items, electronics
etc. by which they are able top capture almost every segments and are able to attract
customers by providing refundable facilities to it's customers (Westerman and Bonnet,
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2015). They quickly resolve issues of the customers and satisfy customers according to
their needs and demand.
What is allowing company to grow
Company eBay is growing at a rapid stage due to it's unique propositions selling
in the market. Firm is dealing in every sectors from clothing to utensils used in kitchen
(Rogers, 2016). This unique features has bind the customers to get attracted to the
organization and turn out to be loyal customers in the near future. ebay solds both sold
and new items in the market which is a unique feature in it's business which has
attracted around million of people across the globe and was able to generate huge profit
by this innovative product. It helped the business to flourish in the other segments of
technology apart from clothings, books etc.
External forces creating impact on business operations
USP:
External forces are also creating huge impact on the USP as sometimes they
restrict certain product to launch in the global market due to which proper services can
not be enjoyed by the customers and growth of the firm is stopped. eBay faced many
issues regarding to political, economical, technological dealing with various sites with
their old and new products across the globe due to which huge financial loss was
suffered and revenue generation was not up to the mark.
PESTEL:
It is used by the company to examine the macro environment factors that creates
an impact on the firm. It can be explained as follows:
Political factor: As eBay is a online retailing store the security of data is a major
issues in every country. It is abided by legal and political norms of every single country
across the globe to expand it's business. Organization is more affected by cybersecurity
bills which is indirectly restricting it's trading across the boundaries and also affect the
profit maximization.
Economic factor: In recent time disposable income is high and people are
spending huge amount on luxury items and entertainments which is available on eBay
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prime and business is generating huge profits and is contributing to countries economic
growth. Organization is creating several other job opportunities across the nation
including UK which increase their goodwill in the eyes of the customer.
Social factor: eBay is fulfilling it's social responsibilities as the products are
given at their door step by which elderly people don't face any problem in walking or
driving to crowded places to purchase such items (Sia and Weill, 2016). Its also provide
free shipping to it's customers if they are Prime membership subscribers its an
additional benefits given to the customers who are a part of this organization.
Technological factor: eBay is facing certain problems regarding modern
technologies and are not able to meet the demands of the customers and some of the
customers switched to other online stores. In the year 2017 company itself stared
testing new product and drone deliveries and are trying to join hands with government
to find a way how these drones can actually deliver these package to the customer.
CONCLUSION
As per the above discussion firm must frame certain tactics to overcome the
barriers of digital business due to which smooth functioning of firm can take place and
more chances of growth can be seen. Business associates must examine Pestel and
SWOT which help to find out the threat and opportunities in the market which in near
future can be a positive sign for the business. Porter's model helps the organization to
understand the degree of bargaining power of buyers, customers rivalry and threats of
new entrants whereas continuous evaluation of micro, macro and meso helps to deal
better with the external environment and better outcomes can be seen.
Reflection: I think that digital business is flourishing in the global market at a
rapid speed but the USP techniques used by the firm turn out to be positive sign in the
market. And organization should use this USP to capture huge market ratio of the
competitors and more revenue can be generated according to me if this USP tools is
used in the long run. Some of the challenges faced by the firm as per my point view are,
availability of resources, effective leader, organizational culture, lack of strategy for
digital customers etc.
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