eBay's Digital Business Model: Strategic Alliances and New Trends

This report examines eBay's digital business strategies, highlighting key trends like 5G, IoT, zero-trust security, RPA, AI, and augmented reality. It analyzes eBay's use of AI and robotics to improve operations and gain a competitive advantage. The report evaluates different business models, focusing on eBay's adoption of the marketplace model and its reliance on strategic alliances and collaborative relationships with companies like Google and Microsoft. It also considers the potential impact of cryptocurrency on eBay's business. The analysis reveals that while eBay benefits from these digital strategies, it also faces challenges related to cybersecurity and the need for skilled expertise. Desklib provides similar solved assignments to aid students in their studies.

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ABSTRACT
In this digitalisation era, most of the business are changes their operations to virtual and
this in turn help to improve the performance of the company. The study has reflected that eBay
uses AI in its business operations that helps to smoother the business operations. It also uses
Robotics in order to create a better outcome and by complying with effective digital technology
theories, quoted business sustain the brand image. Also, it has identified that company uses both
strategic alliance and collaborative relationship with Google and Microsoft respectively to
provide better service to the customers. Thus, digital technology plays an important role in the
businesses in term of raising financial performance and attract range of customers towards it.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Overview of key trend and advantages of digital business..........................................................2
New and emerging business models............................................................................................4
Impact of new collaborative relationship and strategic alliance..................................................5
Impact of crypto currency on eBay.............................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In the recent era, most of the business are shift towards online business because after
pandemic, it become difficult for the organisations to offer offline products. That is why, the
current study also shed a light upon importance of digital e-business and how it improve the
business brand image with changing time. The chosen firm for this report is eBay which is one
top online business and deal in B2C from 1995. The aim of the report is analyse how digital
business grow from the changing time and start offering products directly to customer at low
rate. As per the current statistics, it has been identified that there are 182 million users at
worldwide and it has more than million visitors each month that reflect it has a brand image and
that is why, it stands in second top e-commerce business followed by Amazon.
The current report will provide a key trend and advantage of digital technology and
impact of managing virtual business at global level. It also critically evaluate new and emerging
business model by applying the same into business. Moreover, it evaluates the impact of new
collaborative relationship and strategic alliance under digital technology and lastly it determine
the impact of crypto and Bitcoin.
Overview of key trend and advantages of digital business
According to Zerfaß and et.al., (2021) digital business is that process which is mainly
applying digital technology in order to re-invent the business model so that the customer base
can be attracted by offering innovative products. The biggest advantage of using digital business
is such that it helps to make changes in the way business operates and as a result, company enjoy
the benefits earned through this transformation. Moreover, it also enable to modernise legacy
process that further accelerate the workflows and also increases profitability of a business
(Kotarba, 2018). Therefore, it can be stated that by virtual business, companies can easily
improve the efficiency and raise transparency between the users so that the chances of cost
saving increases. Overall, it can be stated that virtual business is considered one of the best way
that helps a business to improve the customer experience and provide flexibility within a
business as well.
Key trends:

 5G and IoT: It is considered one of the top trend that is followed by the digital business
which is related to fifth generation technology for mobile networks that mainly used to
improved the user experience and improve connectivity as well.
 Zero-Trust security: It is a model whose main principle is to maintain the strict access as
well as control so that no trust issue can be raised (Kraus and Marchenko, 2021). There
are many cyberattacks and this in turn affect the culture of the company that affect the
brand reputation of a business and that is why, this trend helps to provide complete
security of their personal information.
 Robotic Process automation (RPA): Another trend that helps to improve the error caused
by human so that it assist to raise the brand image and increases business operations
scalability as well (Zebari and et.al., 2019). However, many companies are also uses the
same in order to improve the brand image and raise the performance.
 Artificial intelligence: Most of the company are sift towards the new trend in which users
provides their image as input and application that shows how the faces look different in
various age group (Maduka and et.al., 2018). With the pandemic, this become in a trend
and now most of the business are actually uses this method in order to get leverage.
Though AI is considered one of the complex algorithm which teaches itself in order to
manage the large data and learn the pattern so that the operations can be improved.
 Augmented reality: It is an interactive experience for a real world environment where
company provide a combination of real and virtual worlds so that they can contact in a
real time. In the marketing point of view, it is considered as a best marketing strategy that
helps to improve the sales of a company. Further, the application also assist to take
photos and share the same on social media in order to let people know about the new
products offered by the company.
From the above trend, it has been analysed that eBay uses Artificial intelligence in its
working area which that helps to increase the number of buyers and as a result, the sales
increases at global level. However, there are many challenges faced by the quoted firm which
also affect the business performance this includes lack of expertise skill that affect the
business to implement the same (eBay Leverages the Power of Augmented Reality to Simplify
Shipping, 2018). With the help of Augmented Reality, quoted firm also get an advantage
such that when shipping an item, and to find out the right box can be hassle and that is why,

eBay uses a clever solution that is linked with AR in order to sell the products quickly and
gain a competitive advantage as well. This in turn reflected that company is proceed towards
advance technology and for that effective outcome can be generated. In addition to this,
robotics is also used by the company which in turn help to maintain the flow of
communication and generate a better outcome for the business as well (Safronova and et.al.,
2020). Therefore, it can be stated that due to changing era, e-commerce companies actually
provide effective outcome by complying with the best software in order to meet the define
aim.
New and emerging business models
There are different business models that is used by the companies as per their need and
these are as mentioned below:
Free-Model: It is make use of advertisement from different platform like Google and
Facebook. With the help of this model, company can offer the free service and make the user as
an end user. It is so because they provide valuable information which in turn assist the company
to easily determine or reflect the targeted advertisement (Luz Martín‐Peña, M., Díaz‐Garrido and
Sánchez‐López, 2018). Therefore, companies like Google and Facebook are mainly used this
model in order to stay ahead in the business so that they can share the information accordingly.
Freemium model: Within a world of software, it is mainly used in the business. The
advantage of using this model is such that it is free of cost and company put little sales effort
which in turn help to make the product in demand within a market (Wirtz, 2019). Moreover, this
digital business model also provide extra features to the users such that they can use an option to
upgrade to the paid version in order to get an advantage of any products.
Marketplace model: It is third digital model, that helps to provide products when supply
and demand are brought together and this in turn assist to derive their added value from a facts
that there are many players who are active in a market place and get an advantage of the same
(Guggenberger and et.al., 2020). This model is mainly work alone and also represent the
extension of an existing offer because seller and buyer uses third party platform in order to trade
their products.

Such digital business models also faces issue with regard to cybersecurity because in the
present scenario, there are different companies whose personal data is used by the third party and
this affect the business performance. However, the model are actually based upon the new
technology and this in turn help to improve the business performance so the chances of raising
ethical issue will be high because companies main vision is to improve the business performance
by attracting range of people towards it (Verhoef and Bijmolt, 2019). As a result, the chances of
cyberattacks will be high and causes a negative impact over the business performance as well. In
addition to this, it can be stated that under Freemium model that provide a free version to their
customer and they can upgrade the same which might increase the issue of cyberattacks. Such
that a free version always provide a high chances of risk that need to be minimised because it
create a negative impact over the business and create a negative outcome as well.
Among all the different new and emerging digital business models, Marketplace model is
adopted by eBay because there are different brands who offer the products to their customers
with an aim to improve the brand image. Also, it can be stated that this assist to improve the
brand image of a company and by involving third party i.e. eBay, company (brands) get an
advantage of the same that assist to sustain the brand image and meet the customers demand as
well. Here, eBay hire Uber and Upwork as a service count under third party to meet the demand
of customers (Digital Business Models You Should Know Incl. Examples, 2020). However, it can
been critically evaluated that company also faces many issue with regard to cyber security and
this might also affect the customer base because all the personal information has shared to third
party. That is why, quoted firm need to implement the services to reduce the chances of causing
negative impact. Overall, it can be stated that company could also use another digital business
model in its workplace to make the business operations more smoother and authentic.
Impact of new collaborative relationship and strategic alliance
According to Stott and Murphy (2020) new collaborative relationship is all about
participation of at least two different parties to share their resources in order to meet an agreed
goal. This is mainly designed for the mutual benefits so that they can come together in order to
generate a better outcome and meet the defined aim. On the other side, strategic alliance is that
agreement where two companies are undertake in order to work mutually with an aim to retain
its independence. This agreement is consider less complex and less binding as compared to joint

venture (Babu and et.al., 2020). The reason for this is such that two business pool resources in
order to create their own separate business entity.
The benefit of using collaborative relationship is such that it assist to encourage people to
work from different background and as a result, they experience good because it helps to know
about each other. In this strategy, all the team workers contribute their best by sharing
knowledge and talents within a group so that effective outcome can be generated (Rodriguez and
Boyer, 2020). On contrary, the chances of raising conflicts might be arise that affect the business
performance. Also, there are some roles which are ambiguous and as a result, company do not
have meet the same that affect the results of a company in negative way. Also, the cost of
applying this method over other is high and that is why most of the top companies avoid using
this method to stay ahead in the competition.
The biggest advantage of using strategic alliance through digital technology is such that
companies can learn new skills and technology which assist to get competitive advantage and
also contribute to enhance brand image. By using digital technology within a business, company
can easily get into an international market however without it company uses high cost and capital
that create hurdles to enter. Moreover, innovative products and services are also considered
another advantage of using strategic alliance because both companies get an advantage of using
this that raise their profit (He and et.al., 2020). On critically side, it has been identified that poor
communication with the customers might affect the company’s credibility and lack of bonding
between company also affect the business performance. In addition to this, due to weaker
management involve within a business lead to less equity stake and this in turn affect the
business performance.
eBay uses collaborative relationship in which it collaborate with Google which is one of
the top brands that provide an advantage of using multi-surface switching capability in order to
provide google assistant over the phone. This in turn help to create a better outcome and attract
range of people towards it. On the other side, eBay also perform strategic alliance in which it
aligned with Microsoft in 2001 where it become first web sites that offer its community based
commerce engine (Diirr and Cappelli, 2018). As a result, it can be stated that finally eBay will
deploy as a Microsoft technology that includes Windows 2000 server and Microsoft passport.
Overall, it can be stated that with the help of this strategy company is able to improve the overall

performance and also attract range of people towards it. That is why, it can be stated that
strategic alliance as well as collaborative relationship is considered some of the best way that
helps to attract the range of people and by focusing upon digital technology company can also
improve the business performance so that financial performance can be improved (Kurennaya
and et.al., 2019).
Impact of crypto currency on eBay
Cyrpto currency is one of the encrypted data that denotes to a unit of currency and it is
further managed and monitored by the peer to peer network that is known as blockchain that is
act as a severe ledger of transaction. For example, Bitcoin, Ethereum, Ripple. In almost each
country this is used because it helps people to faster their money transfers and also decentralised
systems which further do not collapse at a single point of failure. The trend evolved when the
world economy shift towards a digital ecosystem and this in turn encourage people to invest
within this to provide a better outcome by using electronic application. However, on the other
side, the biggest disadvantage of using crypto currencies is such that it include price volatility
and consume high energy as well that affect the overall performance of a company.
There are both positive as well as negative impact identified of using crypto currencies
over digital business such that it provides incentives to the entrepreneur across the globe and this
provide effective outcome in order to reach an international market so that it strictly stick to
national market. Moreover, the role of digital cryptocurrency in a digital marketing is worthful
because it assist to promote the individual to meet the defined aim and they can used to exchange
the value between two parties in order to generate a better outcome and improve the performance
of a company as well. Manimuthu, Rejikumar and Marwaha (2019) explained in their study that
it also has a complex future because it is entire depend upon the bitcoin and that is why, most of
the people faces issue with regard to the same due to risk. Sometimes, it has been analysed that
people who lack access of digital and financial literacy might face difficult to transition and this
might affect the performance of the companies.
In addition to this, using crypto company can also access to new demographic groups
whose main views is to create transparency within the transaction so that new customers of the
company can be created. An internal awareness has been also provided to the employees and this

assist to generate a better outcome because different traditional investments might also affect the
business in negative manner. overall, it can be stated that it provide economic benefits to the
company because it provide jobs to the people and innovation which in turn help to improve the
business performance (Kumar and Anandarao, 2019). On the critically side, it has been also
evaluated that business needs to be alert because there are many cyber security issues generated
by the third party which in turn affect the business performance that reduces the customer base as
well. In this digital world, majority of the companies are investing upon bitcoins because it is not
regulated by FCA and that is why, the law are not adhere by any specific company. This might
decrease the trust of people towards it because a loss cannot be beard by any company and that is
why, they stop investing upon new currencies because their values become worthless.
According to Sigler (2018) EI Salvador is the first country in the world who adopted
Bitcoin (BTC) on 7th September 2021 and as a result, it entry into force of Bitcoin law and
Decree number 27. In accordance with the Oversight Board of the Public Accounting and
Auditing Profession, it has been analysed that they issues an accounting application guide for
bitcoin that helps to determine about the transaction so that the people can compliance of it.
However, EI Salvador also bet on the future and thinks that it boost the financial inclusivity
within a country where 70% of the population do not have any bank account. Moreover, BTC
main objective is to provide foreign investment by offer the same at low cost and this provide a
simple purchasing process so that everyone can invested into it. This assist to generate a better
outcome and due to its volatility of cryptocurrency to data, the government of EI Salvador stated
in publically that salaries, pensions and funds of EI Salvadoran’s bank will remain in dollars. that
is why, it arose the main risk like maintaining anti0-money laundering program and supervision.
CONCLUSION
By summing up above report it has been concluded that digital business are increasing
year by year, also after pandemic there are range of small digital business introduced that
reflected that customers demand towards it increases. Further, there are many trends identified
within a virtual business which includes software, AI, robotics and among all these are also used
by eBay. Further, company also complied with both strategic alliance and collaborative
relationship which in turn assist to generate a better outcome because it is work under digital
business to it is able to sustain the brand image at global level. Further, crypto currency is also

helpful in digital business and that is why, it assist to create a better outcome because most of the
business get an advantage in term of profit. Overall, it can be reflected that in this digital era,
most of the business are actually perform their digital work and this in turn help to improve the
profit.

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