Business Model Canvas for eBay: Analysis, Recommendations, and Report

This report provides a comprehensive analysis of eBay's business model using the business model canvas framework. It begins with an introduction to strategy and the importance of business models, followed by an overview of eBay's industry, including its competitors like Amazon, and the significance of service innovation, particularly fast delivery. The literature review explains the nine building blocks of the business model canvas: Key Activities, Key Resources, Key Partners, Value Proposition, Customer Segments, Channels, Customer Relationships, Cost Structure, and Revenue Streams. The analysis then applies these elements to eBay, identifying key partners such as IT software suppliers and distributors, and essential activities like design thinking and one-day delivery. Key resources, including supply chain management and technological infrastructure, are also discussed. The report emphasizes the value proposition of fast delivery and the need for an agile supply chain. Finally, the report offers strategic recommendations for eBay to enhance its competitive advantage and improve customer satisfaction through service innovation. The conclusion summarizes the findings and reinforces the importance of adapting to industry changes.

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MBA ASSIGNMENT
7/22/2019
Student name

Contents
Introduction......................................................................................................................................2
Industry and company overview......................................................................................................3
Literature review..............................................................................................................................4
Analysis and findings......................................................................................................................7
Key partners.................................................................................................................................7
Key Activities..............................................................................................................................7
Key resources...............................................................................................................................8
Value proposition.........................................................................................................................9
Customer relationship..................................................................................................................9
Customer segmentation.............................................................................................................10
Channels....................................................................................................................................11
Cost structure.............................................................................................................................11
Revenue streams........................................................................................................................12
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

Introduction
A strategy is a major element that will be providing an action plan to reach out to the objectives
of the organization. A major part of business strategy is the business model that describes the
way a company must develop delivers and create value considering social, economic, cultural
and similar contexts. The report’s purpose is to understand one of the strategic management tools
that are a business model canvas. This model provides a template for the organization to create
or innovate the business model of a company that would include infrastructure, financial
elements, propositions, and customers. The report will include the understanding of the business
model and its nine building elements while taking eBay case and assessing the business model
canvas elements for eBay. Moreover, the relevant recommendations for EBay would be included
after analysing all the elements. The service innovation that the report will discuss regarding
EBay business is fast delivery speed (Ahlin, 2014).

Industry and company overview
EBay Corporation was founded in 1995 in the United States and it is an e-commerce
multinational company dealing in B2B and B2C sales of goods and services through online
mode. Therefore, it can be said that the company crossing the domestic borders has also provided
the sellers with an opportunity to sell their product online to buyers. Not only the merchandisers
but also the consumer can sell their goods online to another customer that is the trading of
second-hand goods service are also provided by EBay. The company is dealing in every
consumer goods possible through an online platform. The online business has been expanded by
most of the company, ever the small and medium enterprises have introduced their business with
technology and digital platform, which has increased the competition for EBay in the industry.
One of the major competitors of EBay is amazon, that is also dealing in consumer goods and is
found to be the largest e-commerce company in the industry (amazon, 2018). The major
advantage by amazon is the speed of delivery, which is the service innovation for EBay in order
to gain a competitive advantage as the company lags at this element of service (Biemans, 2018).
The service is the major component in e-commerce industry through which the customer value is
created and enhanced. The major services include after-sales service, customer relationship
management, and most importantly making the product available to the doorstep of the
customers. The bargaining power of buyers is very high in case of e-commerce industry, the
reason being the switching cost is negligible for the customers and increasing competition has
increased the purchasing options for the customer (Hu, Krush, & Agnihotri, 2016). Therefore, it
is important for EBay to retain customer through increasing the customer value. Another factor
that is largely affecting the industry and strategic decision of EBay is the threat of new entrants.

As already discussed, every manufacturer and retailer is willing to conduct business online, not
only the vendors but also the brand themselves has initiated their personal online websites to
provide goods to the customer. This has increased the competition and threat for the company as
a new entering company may have entered with new technology and more innovative products
and services ideas. Therefore, the service innovation considered by the company is fast delivery.
Along with fast delivery, the customers would have the option to select the time at which they
are willing to receive the delivery (Zhang & Tan, 2017).
According to current estimated delivery time. The only strengths of the delivery system are that
the sellers are required to provide estimated delivery time. However, the key problem is that the
selling may select 1 to 30 days of handling time. This lead to major customer dissatisfaction as
the customer is looking for alternatives to have the product as soon as possible after ordering.
This justifies the suggested service innovation, which would not only increase the speed of the
delivery but will also allow the customer to mention the time when they will be able to receive
the delivery, which will be presented through the business model canvas prepared for EBay
(ebay, 2019).
Literature review
Business model canvas is an easy way to present the business model of a company. It has been
identified that the external validity of the business model canvas has not been tested yet
(Osterwalder & Pigneur, 2010). According to the scholars business model of a company is
depicts the story of how an organization work like the information relating to the customers to be
targeted, value to the customers and also include the economic logic explaining the cost that the
company will incur to deliver value to the customers. The key advantage of the business canvas

model is the visual presentation that will communicate the whole process adopted by the
company to employees and other stakeholders (Bruns, 2013). The nine building blocks of the
model includes
Key activities are the first element that includes the essential activities that are to be performed
by the company in order to execute the proposed business model. It depicts the action to be taken
by the company in order to implement the strategy (Dewald & Osiyevskyy, 2015).
Key resources are the major elements that would reflect the requirement of the resources that
will be required in order to implement the activities to execute the business model. This element
increases the validity of the model by assessing the availability of the resources by the company
(Choi & Park, 2016).
Key partners are the associated people that will be responsible to execute the strategy or business
model. This may include the internal stakeholders of the company or the business partners,
without whom the execution of the business model would not be possible. Thus, it can be said
that this element includes the key people who will be responsible for the company to implement
the business model developed. As per the scholar, a business cannot be conducted without
partners or external stakeholders who are providing support to the organization to act an activity
(Jesus, 2015). For example, suppliers are one of the key partners that will be responsible for
providing raw material to an organization (Saebi & Foss, 2015).
The value proposition is another major element of the business model canvas. A major objective
of a company is eventually related to the customer, for whom the value is to be created. Thus, it
can be said that these elements consist of the value that has to be created in order to attain the
objective, for which the business model is being prepared. It has been identified that this element

of the business model canvas is directly related to the organizational objectives and offers related
to product and services (Gong & Yi, 2018).
Customer segments are the group of homogeneous charters people who will be targeted by the
company or will be the target audience for an organization to be offered with the company’s
products and services. This is decided based on the type of activities and value Proposition
Company is planning to execute (Gabriel, 2016).
A channel is the major element of this model that will reflect the means through which the
organization will offer and deliver their services and products in the market. This element would
explain the mode that the company will be implemented in order to reach out to the customer
(Chung T. , 2015).
Customer relationship reflects the linkage between the organization and the end customer or the
target customer segment. This would include the key links and action that the company would
take in order to maintain the customer relationship and retain the customer (Chung, Yu, Choi, &
Shin, 2015).
Cost structure connects the business model with the financial aspect associated with the
implementation of the business model. This element is responsible for testing the financial
viability and allocation of money of the company towards various resources. Thus, it consists of
the monetary consequences that will be employed to execute the business model prepared
(Harrigan & Choudhury, 2014).
Revenue streams are the most important aspect for the business as the company is working to
earn money and profit, which will be depicted through this element of the model. This will

include the ways through which the company will be making money through the business model
(Biemans, 2018).
Analysis and findings
As per the discussion in the literature review, it has been identified that there are nine key
elements that are developed in the business model canvas. Developed business model canvas for
eBay will be analysed as follows
Key partners
It has been identified that EBay, in order to enhance the service or implement the service
innovation through providing delivery in one or two days to the customer that is increase the
speed of the delivery, will require various digital partners. The key partners identified for the
companies are IT software suppliers, market by suppliers, retailers, distributors and as discussed
digital partners. These key partners will be responsible for the speeding up of the delivery system
of the company. For example, increasing the distributors will also increase the number of
warehouses and the number of delivery persons in order to reach the customer as soon as
possible. Technology is connecting major element that has to be implemented in order to
increase the speed of delivery. Therefore, it can be said that in order to integrate the services as
discussed in the previous section, the company needs to enhance the relationship with the key
partners especially with the distributors and the delivery Agents (Zhang & Tan, 2017).
Key Activities
The activities that have to be performed by the company in order to gain the service innovation
that is the fast delivery service, includes design thinking activities, technology Updating tracking

photo, one-day delivery, schedule delivery. The delivery pattern as discussed is one of the crucial
aspects that the customer is looking for that increase the value to the customer for which
technology is an essential element and in order to gain new ideas design thinking, activity is
another element that has been included in the business model canvas for eBay. In order to reach
out to the customers at a faster speed the tracking of an order of another major activity that has to
be performed by the company, This also includes the building of technology and added the
tracking system to the packages to be delivered to the customers. The main activities are one-day
delivery and schedule delivery in order to implement the service innovation. It has been observed
that one of its competitors that is Amazon has been following one-day delivery that is order
today and has your product tomorrow. In order to gain a competitive advantage, this activity has
been justified for Be to be included in the business model (Sharma & Gautam, 2017).
Key resources
The key resources that are required in order to implement the discussed service innovation by
EBay are supply chain management, human resources, delivery persons, technological
infrastructure and transportation mediums. It has been identified that the key objective of service
innovation is to increase the delivery speed for which it is important for the company to have an
agile supply chain. The reason being the supply chain will be responsible for the time taken in
order to reach from the manufacturer to the customer. As the key activity includes updating
technology, for which the major resource will be technological infrastructure. It will not be able
to possible to reach out to the customer in the quickest way without delivery people that is who
are reaching out directly to the customers with their packages. This also justifies the requirement
for the human resource by the company in order to implement the fast delivery system. Not only
a human resource but also the ways of the medium through which the delivery persons will be

reaching to the customers are important Arsenal to the transportation or other key resources that
will be required by the company and therefore included in the business model canvas of eBay
(Safari, Safari, & Montazer, 2016).
Value proposition
As discussed in the literature review for the position includes the value that has been created for
the customers through the innovation or the business model. For eBay, it includes customer
satisfaction, problem-solving, improved order delivery service, and improved services speed.
The value creation is the major purpose of the service innovation, for which the major objective
of the EBay is to retain the customer has with the increase in competition in the industry. for
example Amazon, due to which the company needs to create higher value for the products and
service offered to the customer. This justifies the value proposition of customer satisfaction and
solving the problem of reaching out to the customer after a long time. It can be said that the
improved order delivery and improved service speed would be the only way to implement the
fast delivery system as the service innovation by EBay (Saebi & Foss, 2015).
Customer relationship
Considering the relationship building with the customer, the key elements included in the model
for EBay are customer engagement that would increase the idea generation directly from the
customers, which justify the increasing customer trust and relation with the company. Email
marketing is another element included in a customer relationship, as the company would include
tracking system to make the product available on exact time mentioned by the customer, for
which providing updates through emails would be appropriate that will lead to increase in
customer relation for EBay (Kumar, Harmeling, & Palmatier, 2018). One of the elements
included in customer relationship management through the service innovation was using chat

bolts, through this the customers' problems and queries may be taken through messages
immediately. Moreover, the requirement of the delivery time can be taken through the chat bolts
which justify the use of this tool for building relationships and implement the scheduled delivery
system. Other than email marketing, push notification would be a quicker way to reach out to the
customer to update the delivery tracking stage (Zhang J. , 2015). Moreover, the customer
database management would depict the preferred schedule by the customer for the next time as
well so as to provide suggestion to the customer and attract through the innovation service
provided by EBay (Judith & Steven, 2002).
Customer segmentation
The customer segmentation for eBay would include considering the lifestyle of the customer, for
which the customer with technical adaptability is very relevant that is the customer is using
technology for various purpose in his or her lifestyle would be targeted, as EBay is offering
services online. It is important that the company would target the customers who are using online
platforms to purchase things, as they would be looking for a comparative platform. The company
can attract such customers through improved services, which justify this segmentation to be
targeted by EBay for service innovation (Nyberg, Dentchev, & Van Hoof, 2016).
Considering the demographic segmentation basis, the company would target young people that is
from 18 to 54 who consider time as major service factor, for which targeting through the new
service offered by EBay would be helpful. The reason being customers from this age group
would be likely to switch brands more often in looking after more offers and services provided
by the company. Therefore targeting this segment for scheduled and fastest delivery would lead
the company to gain more customer retention (Huggins & Thompson, 2015).

As per the psychological segmentation, the businesspersons would be targeted, as it has been
identified that the business people are looking for a platform to purchase products that would be
reaching to them as fast as possible. The business persons are found to be very busy and are
looking for alternatives to have the purchased product to be delivered but they would also prefer
to have a product on the suitable time like in-office breaks. For this, the targeted service
innovation by EBay would be most suitable to be targeted in this segment (Pappas, 2016).
Channels
The channels suitable for EBay are online platforms only as the company is dealing in the
ecommerce industry, for which brick and mortar business is not valid. Among the digital mode,
the two-channel bifurcation would be an online website or mobile commerce, and another way to
reach out to the customer would be social media selling (Coulson-Thomas, 2017). It has been
identified that the people are mostly spending their time on social media platforms, through
which the company can attract the customers and also market their brand scheduled and fast
delivery services provided by the company to gain customer attention and marketing of the brand
could also be done by the company through this channel (Pyka, 2017).
Cost structure
The major cost that the company will be in technology development, as the company needs to
update technology to speed up the process. As already discussed, technology is the major aspect
of service innovation, which needs to be improved in order to change the delivery system. Thus,
it leads to huge investment by EBay, which justifies the cost to the company because of
technology development (Choi M. , 2015). It has been discussed that in order to implement this
service innovation the number of delivery agents needs to be increased, which reflect an increase
in cost to the company on human resources. Moreover, the transportation medium needs to be

improved and an increase in vehicles will be liable to reach to the customer faster. However the
cost to the company would be increased while investing in logistics (Birasnav, 2014).
Revenue streams
The key objective through service innovation is earning larger profits, gaining competitive
advantage, and increase in the sale of the company. The innovative service that is delivering the
goods as per the customer’s suitable timings will help EBay to increase the goodwill among the
customer, which would eventually visible in increase in the sale of the company and also
increase in a number of the customers which would eventually be financial earning opportunity
for the company. For instance, the customer would be retained to a higher rate with improved
service provided by the company, which would increase the number of purchases, by the
customer and also decrease the switching cost of the customers to go for another company to
order the same product (Chou & Shao, 2016).
Recommendations
 Increased flexibility – It has been observed that the company is quite rigid because of
centralized functional units. This reflects that the rigidness may lead to consistency but
the company is not able to gain the opportunity in the industry through improving the
process in various business types in the international market. Therefore, it is suggested to
the company to bring flexibility in decision-making. It can also be said that the
organisational structure needs to be reinvented so as to include a decentralized system
(Choi M. , 2015).
 Innovation in top-level management – Lack of innovation is one of the issues found in
EBay, which is because the top management team does not include innovation in the

organisational culture. It can be said that in the competitive industry, innovation could
only help the organization to grow and sustain in the international market. Therefore, it is
recommended to the company to include innovation across the organization and in all the
managerial levels to improve products and services, and process in order to gain
competitive advantage (Chung, Yu, Choi, & Shin, 2015).
 Digital marketing – It is recommended to EBay to increase the promotional activities
through digital platforms like social media marketing. The reason being some of its major
competitors are extensively promoting their brand through social media. For example,
amazon uses various promotional tools because of which the brand presence of Amazon
has increased to a larger extent. EBay must alter their use of promotional tools and need
to implement innovative promotional activities and campaign to attract customers
through digital mode and sustain in the industry (Finne, 2017).

Conclusion
Through the report, it can be concluded that Strategic business management is rapid planning,
assessing, and analysis of every essential element of an organization to meet up the
organizational objective and goals. The strategy is the major element that will be providing an
action plan to reach out to the objectives of the organization. It is important to prepare the
strategy of the company considering the measurable, reliable, and valid as per the current market
scenario and after understanding the external and internal environment of the company. EBay
Corporation was founded in 1995 in the United States and it is an e-commerce multinational
company dealing in B2B and B2C sales of goods and services through online mode. One of the
major competitors of EBay is amazon that is also dealing in consumer goods and is found to be
the largest e-commerce company in the industry. The service innovation considered by the
company is fast delivery. Along with fast delivery, the customers would have the option to select
the time at which they are willing to receive the delivery.

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