Digital Business Report: eBay's Digital Transformation Strategies

This report provides a comprehensive analysis of eBay's digital business operations. It begins with an introduction to digital business, contrasting it with traditional models and highlighting the activities involved. The report then delves into eBay's business description, its mode of operation, and its digital business environment, including micro, meso, and macro environmental factors. A significant portion of the report is dedicated to market analysis, using Porter's Five Forces to assess the competitive landscape and examining market growth and segmentation. The report also includes a SWOT analysis of eBay, identifying its strengths, weaknesses, opportunities, and threats. Furthermore, the report discusses digital business activities such as online selling, and concludes with a summary of the key findings and references. The report aims to provide a detailed overview of eBay's digital transformation and its strategies for success in the e-commerce industry.

DIGITAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
Business description...............................................................................................................3
Traditional business v/s digital business................................................................................3
Digital business activities................................................................................................................5
Mode of operation .................................................................................................................5
Digital business environment.................................................................................................6
Market place...........................................................................................................................6
Market growth........................................................................................................................8
Market segmentation..............................................................................................................8
Growth factors for digital businesses.....................................................................................8
External forces........................................................................................................................9
CONCLUSION..............................................................................................................................10
REFRENCES ................................................................................................................................11

INTRODUCTION
Digital business is the creation of latest business designs and uses the technology to build
new value in business model, customer experiences and the internal capabilities which creates its
core operations. In present business world the people are spending huge money on online and
shifted the business emphasis to digital sources of revenue and digital channel. It involves both
that is digital brands and traditional brand who are working on transforming their businesses
digitally.
Business description
The organisation undertaken in this report is E bay which was founded in 1995 and deals
in internet and e- commerce industry (Chaffey, 2015). It serves various products and services
which are digitally enabled like online shopping with the help of its online applications, etc. This
company operates all over the world by covering almost every part in global business
environment and approximately employs 180000 people. Its official website is www.ebay.com.
Traditional business v/s digital business.
A traditional business is operated to provide its customers with a product in exchange for
compensation. This form of business is generally operated in a local store or shop that offers its
products and offerings to its customers and in this, the customers will have to visit the store
physically in order to purchase the products (Darics, 2015). Furthermore, their promotional
strategies will be like business cards for the brands, designing brochures for the products,
modifying the interior and infrastructure, pamphlets, banners, posters, etc.
Digital business are those which uses technology for its internal and external operations.
Earlier digital business started with selling but now it has expanded the operations which
includes activities more than selling (Fleisch, Weinberger and Wortmann, 2015). The growth of
this industry have made people familiar with the digital products and services which has driven
company into new competitive advantage. The promotional strategies used by the digital
businesses will be social media like Facebook, Instagram, twitter, etc. Apart from this they will
also use digital hoardings for promoting their products to the customers.
Difference between digital business and traditional businesses
Basis Digital business Traditional businesses
Shipping and logistics These businesses face ongoing At the same time, the

challenges related to getting
products in the hands of
customers quickly.
Competition from big box
retailers like ebay means it’s
no longer enough to get an
item to customers in five days
to a week. Apart from this,
also deal with the logistics of
returns, as customers purchase
multiple items to try them out,
then return them, forcing you
to issue refunds and put items
back into inventory.
traditional business also faces
the challenge of getting the
products which the company
wants to sell in their stores.
They feel burden to sell their
items online but in store also
they will have to handle the
various issues like shop lifting
and damage of products as
customers are concerned with
businesses who visit the store
on regular basis.
Promotional strategies It includes web sites, social
networking sites, content
marketing, banner and google
ads, etc.
It includes print and broadcast
media, direct mail and
telemarketing, etc.
Digital business model
This can be understood by applying the SWOT analyses of E bay as it helps in
identifying the internal strength and weaknesses and external opportunities and threats (Holliman
and Rowley, 2014).
Strength
 Market leadership all over the world.
 Experience in extensive utilisation of
the first mover advantage.
 Strong brand portfolio and image in the
market as E bay is one of the largest
digital business.
Weakness
 Weak competitive position.
 Hampered the brand image in UK due
to tax avoidance scandal.
 Due to extensive delivery network and
price wars E bay margins are shrinking,
which is resulting in even losses.

Opportunities
 Diversification of e- commerce
business segment.
 Maximising focus on physical presence
of the brand.
 Engagement in strategic collaborations
with companies in e-commerce and
affiliated industries.
Threat
 Loss of profitability due to low
margins.
 Threat of privacy due to online issues
like hacking, misuse of banking
information, etc.
 Competitors like Amazon, snap deal,
flip kart, etc.
Digital business activities
There are multiple activities which takes place in an organisation and transformation of
those activities in form of digital is regarded as digital business activities (Iansiti and Lakhani,
2014). The major activities which will be practised by E bay is like selling clothes online, eBay
Stores Markdown Manager is an instrument formed entirely for Store owners to assist and hike
sales. Sellers can use the Markdown Manager to temporarily cut the prices of their items and
encourages the savings to buyers. eBay Map It helps buyers and sellers purchase the power of
local sales. Buyers can hunt by distance from their location and Map It yields a map viewing
where items are located. It's a convenient means for sellers who want to sell large, bulky items
without having to ship them. It can also have a positive effect for sellers who maintain a physical
store or distribution location.
Mode of operation
Ebay has a different segments of businesses and each business has different style of
working in a digital era. This part will discuss the working or operation of online channel of the
company. Therefore, there are various steps involved in the purchasing step of the E Bay through
its official website. So, this works by logging in the account on EBAY online application and for
this purpose the customer will need to create account on the companies application. This will
give them various options of items which they wants to purchase so customer can filter the items
according to their needs, add the product to the cart, click on sale, add payment option and place
the order. After placing the order, it will be delivered to the customer within the specified time
period (Kreutzer, Neugebauer and Pattloch, 2017). This working mode of Ebay offers various

benefits like excellent customer services, return policies, security, logistics, lower prices,
customisation, etc.
Digital business environment
Micro : Micro environment consists of internal situation of business. In this environment,
major entities such as suppliers, resellers, customer, competition along with general public and
audience. In digital era, it comprises of same entities for E bay which is a e-commerce platform
to sell items in given point of time (Laudon and Laudon, 2015). As, this largest e-commerce
deals in selling goods and services through internet mode, which comprises of vendors, marginal
entity and delivery logistics. This environment deals with providing customer's with high quality
delivery and service to customer in given point of time.
MESO: This environment is a setting between the micro and macro opportunities. In era
of digitalisation, this environment provides business framework along with structured policies,
standard framework and operating rules and procedures for the greater and higher context. In
context with Ebay, while going in process of delivery, this provides rules & regulation for
delivery based situation to generate business profitability along with higher possibility.
Macro: Macro environment is the condition that includes in the economy as it involve
the trends in gross domestic product, inflation, employment, spending and monetary and fiscal
policy. As all these are the external and uncontrollable factors that directly influence decision
making of the company and also affect the overall performance and strategies. In digital era,
these type or environment provide appropriate framework for Ebay because it affect on the
decision making activities of the company. Thus, it is important for Ebay to includes all the
factors while serving their services to customers. With the assistance of this, company can easily
improve their brand image and also attain larger market share from its rivals.
MESO: It is the setting between the macro and micro opportunities as it shapes the
business framework which consist the infrastructure like policies, standard operating procedures,
rules and guidelines. In context of Ebay, company implement all the policies while operating
business. With the assistance of this, company improve their performance level and at the same
time also enhance the positive brand image at market place. Mainly, this environment help in
analysing the competitive position of the company and industry as well.

Market place
Porters five forces: It is one of the important and effective analytical framework that
shape the overall extent of competition of the industry. With the use of this, Ebay can easily
analysis the competition level at market place. In case of ebay, the external factors determine the
condition of the e-commerce industry environment with ficus on the online retail market. To
attain competitiveness in market company use porter's five forces model are as follows: Threat of new entrants: This is low for ebay because the proliferation of digital
technology includes various changes to the retail industry. In this context, several number
of new brand are entered in market place. Along with this, growth in digital technology
may reduce the barriers to entry as it is difficult for another companies to business brand
image at market. Bargaining power of buyers: In this, the bargaining power of buyer is medium to high for
ebay as company focus on the customers satisfaction and their quality of products. In this
switching costs for the consumers are low as physical retail is create more pressures. In
addition of this, every customers has enough information while finding the products at
online sites. This is why retention of customers is important focus area for the company.
Thus, the bargaining power of ebay buyer is high in the industry.
 Bargaining power of suppliers: Under this force, the bargaining power of suppliers is low
to medium for ebay because company always has the upper hand when its comes to its
supply chain. In this suppliers are perform their business as per the rules set by ebay. In
addition of this, suppliers are also follow the code of conduct that set by the ebay. In
addition of this, there are some core areas in which ebay focus in terms of suppliers
relationship which are as follows:
◦ Fair and ethical treatment
◦ The right to legal wages and benefits as well.
◦ Health and safety in process of production areas.
This is the main reason the ebay's suppliers bargaining power is low to medium because
company always has choice to switch and find new suppliers. Threat of substitute products: In context of ebay, threat of substitute products is high
because number of another brand are enter in online retail. This is the main reason the
customers can easily switch one brand to another. In addition of this, the major

competitive advantage of ebay company because of its excellent customers services as
compare to another brand.
 Rivalry in the industry: Under this, the level of rivalry in the market is high as number of
players operate their activities in e-retail which increase the competition level at market.
This is the main reason that company face high competition at market.
Market growth
Competitive matrix is a analyses tool which helps the ebay in establishing its competitive
advantage. It furnishes an easily readable and understandable picture of competitive landscape
and the position in the marketplace. The matrix can be just a simple chart. In the left column, it
lists the main features and benefits of product or service. On the top row, it will list company
and the names of your competitors.
Market segmentation
ebay offers wide range of products and services. These products and offering are
available all over the world and targets everyone that is it targets all age group people. For
instance, kids are targetted by various games and kids accessories which influences towards the
new products (Laudon and Traver, 2016). The middle age group people, who are highly busy and
does not get time for anything, ebay serves all kinds of products to them from clothes to the
groceries because their busy time schedule influences them to do online shopping.
Growth factors for digital businesses
Every company exist for the purpose of some uniqueness in their businesses. Therefore,
the unique selling proposition of the ebay will be to provide online shopping experience to the
customers.
In recent years, the digitalisation of business and companies operation has developed a
lot. There are various factors which have raised the issue of transforming businesses in to digital
form because of the growing competition (Matt, Hess and Benlian, 2015). ebay has grown day
by day because of its innovative feature, technologies, uniqueness, wide range of products and
services. Apart from this, its logistics facilities are way more better than any other organisation
which has highly satisfied the customers. The primary goal of every business organisation is to

satisfy its customer and company has worked a lot on identifying, analysing and giving post
purchase services to the customers like return policies which are very simple and easy in nature.
External forces
PESTLE analyses
This is a strategic analytical tool which will be used by the company to identify and
analyse the external forces of the industry. The following is the PESTLE analyses of the ebay :
 Political factors : These factors are concerned with the intervention of the government
and includes taxation, stability, rules and regulations, etc. ebay will have political red
tape and tightening regulations due to the political bureaucracy (Veit and et. al., 2014).
Apart from this, it is concerned with technology business which is highly under the
control of the political and regulatory scrutiny.
 Economic factors : They are concerned with the factors like inflation, deflation,
recession, exchange rates, foreign direct investments, etc. So ebay has a strong impact on
economic growth of the country by creating various job opportunities which maximises
the per capita income in the country.
 Social factors : These factors are related to the customs, beliefs, lifestyle, etc. ebay will
have a strong impact on these forces due to the transformation of traditional business into
digitalisation which has further changed the perceptions and tastes of the people.
 Technological factors : This is related to the innovation, development in research and
development department, etc. ebay is working immensely on the logistics ,maximises
levels of technology are now an essential requirement to efficiently and effectively deal
with the demands of highly globalised, complicated and interconnected supply chains.
 Environmental factors : These factors are concerned with factors like pollution, using
recyclable sources of energy, emission of carbon dioxide, etc. There fore, ebay will
concentrate more on using organic materials and develop proper wastage systems.
 Legal factors : It is concerned with various laws and regulations which will help the
company in protecting the rights and interest of its customers and employees. Like it will
adopt data protection act so that privacy and confidentiality can be maintained which is
very important in the industry (Westerman, Bonnet and McAfee, 2014).

CONCLUSION
Digital business is highly profitable in today' business world. According to me,
sustainability is required in every kind of business because resources are scarce in nature and
needs to be used effectively and efficiently.
In today's business world digital business has many benefits but at the same time it also
has a long list of challenges and barriers. Some of the main challenges which are greatly
experienced by the organisations are that people are resistant to change and does not wish to
accept them. As everyone is busy with their own work in the business so there is a lack of
collaboration and people are not willing to share their ideas. The shortage of skills and
knowledges has a adverse impact on the operations of digital businesses because it needs highly
educated and skilled personnel.

REFRENCES
Books and Journals
Chaffey, D., 2015. Digital business and e-commerce management. London: Pearson Education
Limited.
Darics, E. ed., 2015. Digital business discourse. Springer.
Fleisch, E., Weinberger, M. and Wortmann, F., 2015. Business models and the internet of things.
In Interoperability and Open-Source Solutions for the Internet of Things (pp. 6-10).
Springer, Cham.
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perceptions of best practice. Journal of research in interactive marketing.8(4). pp.269-
293.
Iansiti, M. and Lakhani, K.R., 2014. Digital ubiquity: How connections, sensors, and data are
revolutionizing business.
Kreutzer, R.T., Neugebauer, T. and Pattloch, A., 2017. Digital business leadership. In Digitale
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Firm Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
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Veit and et. al., 2014. Business models. Business & Information Systems Engineering.6(1).
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Westerman, G., Bonnet, D. and McAfee, A., 2014. Leading digital: Turning technology into
business transformation. Harvard Business Press.