Innovation Management: Analyzing eBay's Strategies and Future Growth

This report offers a comprehensive analysis of eBay's innovation management, examining its history, current market performance, and future capabilities. The report begins with an overview of eBay's evolution, highlighting key innovations like the feedback system and PayPal integration. It then applies PESTEL and Porter's Five Forces analyses to assess the external factors influencing eBay's innovation and competitive landscape. A SWOT analysis further evaluates eBay's internal strengths, weaknesses, opportunities, and threats, focusing on aspects like the Global Shipping Program and the potential of technologies like drone delivery and artificial intelligence. The report concludes with an industry overview, emphasizing the importance of new innovations in the e-commerce sector and providing insights into eBay's future growth strategies, including the potential for expansion into new markets and product development.

MANAGING
INNOVATION IN
BUSINESS

Executive Summary
The innovation can take place in any aspect as it can be a new business idea, product
innovation, transport and communication modification and many more. It can be described as a
combination of management process for the implementation of desired and management
changes.
This reports is basically determines the understanding of innovation for Ebay which is a
well known e-commerce organisation that is basically worked to provide effective auction
services to customers for fresh and pre-used products. The purpose of this report is to analysing
organisation's existing innovation history as well as current performance in the market that assist
in determining its future capabilities for adopting new innovation ideas for further development.
Ebay having a innovation history that support them in getting desired growth since now.
In this, PESTEL analysis determined the influence of external factor that encourage firm to
bringing innovative drivers in order to representing its innovation history as Government
Relations, fixed price, Green Projects and so on. Porter's five force model represented
requirement of innovation as fixed pricing, buy-it-now and online auction practices in Ebay for
the reduction the power of suppliers, competitive rivalry, new entrants as well as for better
enhancement of buyers power.
Furthermore, the development audit of organisation has been conducted through SWOT
analysis which represents Performance of eBay that ascertained through the implication of
Global shipping program, Pay-pal relationship and many more. Through this Ebay can analyse
their future capabilities for the effective implication of new innovation as Fly drone that will
helping them to maximise profitability of business within next few years.
Last but not least, the industry overview ascertained the present condition of E-commerce
industry which is required to identifying future possibility of achieving heights with significance
of new and experimental innovations as fly drone, artificial intelligence and many more.

Table of Contents
INTRODUCTION...........................................................................................................................1
The Organisation & Industry Overview..........................................................................................1
Organisation and its Innovation history.................................................................................1
The Organisations existing Innovation Performance and Capabilities..................................3
E-commerce Industry ............................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Innovation is very important in respect to the growth of a business. It can be defined as a
new idea, method or a device which helps in providing a more appropriate solution in compare to
the previous method for the particular task (Drucker, 2014). This reports is based on ebay which
is an American multinational electronic commerce company. The organisation was founded in
the year of 1995 by Pierre Omidyar. Main objective of this assignment is to identify innovation
history of the organisation as well as their existing innovation performance and capabilities by
applying SWOT analysis. At last, it will determine industry overview in appropriate manner.
The Organisation & Industry Overview
Organisation and its Innovation history
Ebay is a multinational e-commerce company which manage online auction and shopping
services on which people can buy and sell variety of products by their own choice. The
organisation was first named as Auctionweb by Pierre Omidyar on which they offered a few
small used items for sale.
Ebay having a great innovation history in terms of each and every sector that assist in
determining their capability for attaining new heights. Firm basically implement creative ideas
for the development of government relationship by formulating green project, government
relation team as well as providing maximum employment opportunities for economy
development practices. For building effective relation with services users, they implementing
stub hub practices, Paypal for secured transaction and so on. All these innovation approaches
assist them in enhancing their future capabilities to coined up own arena in market place. The
determination of Ebay's innovation history is ascertained through PESTEL analysis as -
PESTEL analysis
Political factor - The government of US provide appropriate support to ebay after
identifying their motive about reuse products and services. For the effective management of e-
commerce issues, ebay formulates a Government Relations team as a new innovation that
focuses on legislative and regulatory areas (eBay Government Relations. 2018).
Economical factors – The economy of US got a effective growth from the business
services of ebay. The organisation offering million of products in numerous categories to approx.
160 million users. The requirement of economy for new development practices drives changes
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in innovation strategy of ebay for the effective implementation of new and experimental ideas
of fixed price and buy-it-now. Through this $90 billion worth of merchandise sold on eBay last
year forms that call “the eBay economy.” (A Look at the “eBay Economy” in the U.S. 2018) The
sales of organisation takes heights after the implementation of new and innovative ideas.
Social factor - The government of US pay their maximum attention towards those
business sectors that enhance employment opportunities. As a first innovation, organisation was
introduced feedback system that was announced in the year of 1996 that affect positively on
business sale (History of eBay – How they Got to Where They are Today. 2018). For the effective
management of feedback services, organisation hire numerous employees and provide them
opportunities for career development.
Technological factor – Ebay is a multinational e-commerce organisation which works to
provide tremendous selling and buying experience to customers at global level. For the effective
business practices, in the year of 2006 ebay creates a symbiotic relationship with Paypal that
provide digital transaction and further services to ebay as well as its customers (History of eBay
– How they Got to Where They are Today. 2018).
Environmental factor – The government of USA pay their maximum attention toward
eco-friendly services therefore, they promote e-commerce practices. In this respect, ebay
provides their own contribution and conduct a innovation named Green Projects that has allowed
people to buy and supply green products for environmental safety services at worldwide. (A
Thorough PESTLE Analysis of eBay. 2018).
Legal factor – For Ebay, it is required to implement proper legislations and rules of a
country that assist to managing business activities for upcoming projects. The government of UK
provides higher benefits to Ebay in respects of global trading and international transportation
service from the past few years. As its result, Ebay can implement new and innovative idea as
Global shipping program regarding quick delivery in their business practices.
Porter's five forces
Supplier Power – In the past time, a constricted numbers of suppliers for pre-used
materials creates a monopoly as they having a great bargaining power in the market. Thus, ebay
introduce their e-commerce services for auction, pre-used as well as fresh products in worldwide
(Turban and et. al., 2015). These activities assist in restrict suppliers bargaining power.
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Buyer Power – In the scenario of ebay, bargaining power of buyers is not as higher
because of its innovative idea of bidding. At its website has been designed with a innovation on
which buyers can bid a proper price of product for a predetermined amount of time. When the
time is up, item is declared as sold to the highest bidder. Thus, the organisation provides
bargaining authority to their buyers for their desired services.
Threat of substitutes – While setting up business for e-commerce trading, ebay faced
fear of substitutes from amazon, alibaba and so on.. Therefore, ebay implement new innovation
as online auction, fixed pricing, buy-it-now and flying drones for buying and selling different
products. These kind of creative and experimental ideas assist in reducing threat of substitutes.
Threat of new entrants – Ebay faced numerous competition from existing e-commerce
organisations as Amazon, Alibaba and so on. Thus, Pierre Omidyar implement innovative ideas
as auction in desired prices for different business products that assist in reducing threat of new
entrants as Flipkart, Snapdeal and many more in present era.
Competitive Rivalry - Ebay faced a strong competition in e-commerce market from
amazon, Alibaba and many more. All these organisation adopts fast innovations for the growth
of their business. At that time ebay were in the condition of less customers sustainability due to
time consuming practices as auction. Thus, organisation implement new innovation as fixed
price and buy-it-now that provide opportunity to capture traffic towards them.
The Organisations existing Innovation Performance and Capabilities
Ebay is a well known electronic commerce organisation that provide quality services to
their customers at international level. In this respect, organisation faces strong competition from
existing organisations in which amazon is known as strongest competition due to its strong
innovation strategies. Thus, for ebay it is required to analyse their capabilities and performance
aspects that assist them in implementing new innovation for grabbing numerous opportunities
(Laudon and Traver, 2013). Some of the existing aspects of economy drives changes in a
business organisation as in the year of 2013-2014, ebay innovate their strategy towards Global
shipping program. Main objectives of this program is to remove hassle arranging global logistics,
import charges and so on. Thus the program is not get a desired success because the seller of
individual product sends them to US shipping centre after this they take them away to customers
away from there. Thus, the procedure takes a long duration in delivering products and services to
desired place. Therefore, the requirement of customers force organisation to adopt innovative
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drivers for fast shipping and delivering services with the help of fly drones. Through this, ebay
provide services to their worldwide customers within 30-60 minutes by updating tracking
information. In this process artificial intelligence will providing digital support for manual
commands for delivering services. These new innovative ideas aid in providing maximum
competitive advantages to firm. For the appropriate analysis of organisational existing innovation
and performance capabilities it is required to conduct a development audit through SWOT
analysis as -
Strength- Ebay is one of the largest international online seller company with the total
number of 105 million users across 37 countries (SWOT analysis of eBay. 2018). It acts as a
middle man between the seller and the buyers who bid and sell products on the website of eBay.
As being the first company to launch this scheme, the respective organisation has no competition
of its level that assist in determining its performance factors. The company is also offering
localization services which means that they are using local languages in different countries to
provide them remarkable services. Ebay owned stub hub services which is world's largest ticket
marketplace that assist them building direct connection with service users. All these working
practices assist in strengthen business growth towards the desired level (Ebay SWOT Analysis,
2018). Ebay also provides various payment options such as Pay-Pal which eases out the
shopping experience of the customers. The reputation of the respective company is very much
reliable. Additionally, the brand value of the is 11 billion.
Weaknesses- The fee structure of the company has increased from past few years. Due to
this, the profit level of sellers has decreased over the year. Ebay earns from listed products, sold
products and Pay-pal transactions. Additionally, the centralised functional unit is not flexible
enough which leads in resulting many issues working in the international market. The company
paid limited emphasis on innovations which turned out to be a biggest concern. Due to this, it
gave a big opportunity to the other small competitors to grow and earn more profitability. One
weak aspect of organisation is fast delivering services in international countries. Thus, it can
reduce long term customers sustainability towards the firm.
Opportunities- There are many opportunities available for ebay which can help the
respective organisation to grow. The firm can enhance its online business to other markets.
Currently, the company earns the most of its profit from United States and European market.
Thus, ebay have a great opportunity to expand its business in order to earn more profit levels.
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Additionally, the respective organisation has an opportunity to expand its innovation through
product development. This can be achieved by improving the accessibility to the products across
the countries which can enhance the organisation's base of customers. In order to enhance their
future capabilities, Ebay focuses towards fast delivery services through fly drones to the
customers by providing exact tracking information through GPS. Main objectives of this
innovation is to enhance the experience of the customers and attract more buyers through fast
delivering services. One most innovative feature of this experimental idea is that customers can
choose their delivery day and time by their own on the basis of their suitability.
Threat- Ebay is a well established organisation. However, there are other competitors
that are available in the market which can decrease the number of customers and profitability of
the company. Hence, companies like Amazon, Flipkart, Alibaba, etc. are the biggest threats to
the organisation. Also, the concept of the respective company can be imitated which can make
ebay loose its uniqueness of the concept and market share (Comino and Ferretti, 2016).
Additionally, the respective company is vulnerable in aspect to technology which makes other
companies more stronger in the competition. The existing competitors of Ebay works as a
innovative driver which force them to make changes with the implementation of new and
innovative ideas about fly drones.
E-commerce Industry
In an economy, each and every organisation implement digital transformation in terms of
payment, delivering, search and advertising as well. In this procedure, electronic commerce
encounters a drastic change which completely changes the whole scenario of business trading
practices. Through this, each and every organisation can sale their products to requisite
customers at global level. In the present time, approx. 17% companies that interested in
multivariate testing for strategical changes rated it the most effective method for merchandising
(Essential Ecommerce Statistics for 2018. 2018). On this platform, approx. 61% of companies
run their business through e-commerce pages per month. In between those, 52% of business
organisations and agencies examine their business growth in improvement conversion. In the
present and future expected year, e-commerce spend per customer over the course of total
average approx. $1,800 in the US and 1,600 in the UK (Essential Ecommerce Statistics for 2018.
2018). This industry is not required for new conception because it is already having a drastic and
creative innovation that emphasise profitability for different companies, customers, government
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and for a nation as well (Mohapatra, 2013). In this industry some of the organisation getting
golden achievements in respect of success drives and building positive relationship between
different countries. Due to having a large number of e-commerce firm, individual needs to
implement innovative ideas to make themselves unique and better than others. In this regard,
new innovation of Ebay as fly drones with the implementation of GPS and Artificial intelligence
determining them a desired success in respect of easy delivering to customers at international
level. These kind of ideas assist to enchaining future business capability for the effective
sustainability in competitive market. IN 2020, the B2B and B2C e-commerce sales are expected
to grown as well as reaching 6.7 trillion USD estimately. That means, there can be tremendous
opportunities for employment as well business growth and success.
CONCLUSION
From the above report, it has been summarised that business innovation can work as a
catalyst for the growth of the company. Through this, an organisation can enhance their
capabilities the drive new changes on the basis of market and business requirements. This report
determines history of Ebay through PESTEL analysis for examine impacts of external
environmental factors that drives innovation as Government Relations, fixed price, Green
Projects and so on. Porter's five force model assist in determining industry requirement through
e-commerce services as auction of pre-used as well as fresh products that reduces suppliers as
well as competitors power and encourage buyers for bidding. The implication of SWOT analysis
of Ebay determined existing performance as auction and buy-it-now services as well as future
capabilities of firm for the effective implementation of new innovation as fly drone. At last the
requirement of industry reflects existing business strategy and requirement of new innovation as
fly drones for business growth.
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REFERENCES
Books & Journal
Comino, E. and Ferretti, V., 2016. Indicators-based spatial SWOT analysis: Supporting the
strategic planning and management of complex territorial systems. Ecological
Indicators. 60. pp.1104-1117.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.E. Dobbs, M., 2014.
Laudon, K.C. and Traver, C.G., 2013. E-commerce. Pearson.
Mohapatra, S., 2013. E-commerce Strategy. In E-Commerce Strategy (pp. 155-171). Springer,
Boston, MA.
Turban, E., and et. al., 2015. Electronic commerce: A managerial and social networks
perspective. Springer.
Online
A Look at the “eBay Economy” in the U.S. (2018). [Online]. Available
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