Innovation Strategies for eBay: Industry Analysis and Future Trends

This report provides an in-depth analysis of eBay's innovation strategies within the e-commerce industry, focusing on the importance of innovation for business success. It examines eBay's current capabilities, its competitive landscape, and the future opportunities presented by emerging technologies such as flying drones, VR/AR, and mobile location-based selling. The report utilizes Porter's Five Forces model to analyze the competitive environment and identifies key innovation requirements for eBay to remain competitive. It explores the potential of these technologies and discusses the capabilities required for their implementation, including financial resources, technical expertise, and organizational adjustments. The report highlights the increasing competition in the e-commerce sector and emphasizes the need for eBay to continuously innovate to meet evolving customer demands and maintain its market position. It suggests strategic approaches for eBay to adopt, including the development of its own branded products and the establishment of physical outlets to enhance customer experience and expand its customer base. The report concludes by emphasizing the importance of strategic innovation for eBay's long-term success.

Managing Innovation
in Business

EXECUTIVE SUMMARY
This report is a continuation of work which was submitted in previous semester under
course work one which present an information about the innovation history and current
capabilities of eBay along with industry analyses for future opportunities. On the other hand, this
course work two is about the importance of innovation for a company and its contribution toward
the success of business. This report is based upon eBay that belongs to E-Commerce industry
which includes number of companies deals in offering variety of product or services through an
online platform. E-Commerce industry perform operations that includes set of activities related
to buying and selling of product as well as services by using internet. E-Bay work toward selling
product or services online by providing a platform for customers to interact with the retailer from
all over the world.
The report is about analysing the innovations that are anticipated by the players of
industry and some which are expected to be introduced by year 2020 or beyond. From this it has
been found that rivals are continuously brining innovation for offering quality services which is
making customers habitual of accepting changes. This act as an innovation driver for eBay which
created a requirement of innovations that has to be done by company like Flying Drone, Mobile
location for selling and VR, AR or wearable devices will be easily accepted by customers. But is
required to develop capabilities for bringing innovation that can be analysed using roadmap
which analyse the capabilities required to develop for particular innovation. For evaluating the
innovation capability road map has been used under this project which depict about several
actions that must be taken by company to implement innovation. From this report it has been
found that competition is raising day by day which increases the demand of innovation for
sustaining in marketplace. Apart from this, for implementing this “Flying Drone as delivery”,
eBay is required to arrange fund, machinery and more technical expertise for developing and
handling it effectively.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
The Future of Industry 2020 and Beyond...............................................................................1
The Organisational Innovation Requirements 2020 and Beyond...........................................3
Building the Future Innovation Capabilities for the organisation..........................................7
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation refers to the process of introducing and implementing new ideas or methods
for improving the quality of services to create value among customers. This includes set of
activities like gathering information, resources and other material that are required and then
implementing those for innovating processes. This report is about eBay which is an online
auction based American multinational company which is founded in year 1995 and is
headquartered in San Jose, California (Archibald and Archibald, 2016). eBay belongs to E-
commerce industry which provides a platform where customers and businesses can purchase or
sale wide variety of goods throughout the world. It provides a platform for interaction and
performing transactions between consumer to consumer and business to consumer related to the
purchasing or selling of commodities. But it is one of the most competitive industry where eBay
have to deal with rival players such as Flipkart, Amazone, Alibaba etc. which provide tough
competition to one another by adopting competitive strategies.
The main aim of this report is to identify the opportunity that are present in E-commerce
industry which help E-Bay in identifying the innovation that it can bring in marketplace. Further
this report also focuses on determining the capabilities that a company have and required to
enhance their capabilities for dealing with competition in market (Pantano, 2014).This project
includes a detail description about the future of E-commerce industry by 2020 and beyond for
identifying the growth and innovation opportunity present in front of company. As E-commerce
industry is growing very fastly and there are majority of innovation that are expected to be
experienced within this sector by 2020 or beyond such as AI voice assistance, mobile location
based promotion as well as selling and many more. Then it explains about the various
innovations that are expected to introduced by eBay in 2020 (Van Lancker, Wauters and Van
Huylenbroeck, 2016). At last this focuses toward determining the capabilities that eBay have
which is required by company for future innovations with the help of roadmap which provide
step by step execution of innovation.
The Future of Industry 2020 and Beyond
E-Commerce industry is a group of companies which uses internet as a medium to
operate or perform its business operations. This sector is drawn up over technologies like
electronic fund transfer, supply chain management, internet marketing, online transaction
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processing, inventory management system and mobile commerce. E-commerce is one of the
fastest growing industry as it is encouraging businesses to perform their operations online and
globalising their networks (Bilińska-Reformat and et. al., 2018.). The industry generally provides
several services like online shopping, home delivery of products, online payment option etc. This
support in simplifying the life of people by connecting retailers and customer at one place. It
provides industrial player an opportunity to interact with customers as well as business partner
worldwide which help in expansion and further growth (Milic, 2017).
The attractiveness and growth opportunity of industry influencing businesses to digitalise
their operations over an online platform and offer quality of services to customers worldwide.
Hence, the competition is getting higher as different players are bringing innovative approaches
for achieving sustainability. So, the environment of E-commerce is constantly modifying and
upgrading due to technological changes which competitors are bringing for enhancing their
service quality and capturing larger market share. This in turn also contributing toward the
development of industry which provide several growth opportunities to other players of this
sector.
The key players of E-commerce industry are Amazon, Flipkart, Alibaba, Etsy etc. which
keep on innovating their process as well as services to remain competitive and enhancing their
customer base. These players are now planning to launch some innovations for enhancing the
level of services like Amazon which is best known for its innovation practices. It continuously
focuses over innovating its current services or processes for enhancing the satisfaction level of its
customers. One of its innovation in process is “Amazon basic” where it offers its own
manufactured product which are of high quality and sold under affordable price. But apart from
this Amazon is also planning to introduce its physical outlet which provide its customers an
option to select their products online and then can check it over its physical outlet (Amazon
opens its first store, 2018). On the other hand, Alibaba has innovated its current process of
customer support services by involving Artificial Intelligence as a voice assistant. Under this
innovation, the customer complaint calls are being handled by Alibaba's AI voice assistant where
it not only taking calls but also provide a pre-recorded demo to customers (AI voice assistant,
2018).
These innovations are being expected to be introduced by the player of E-commerce
industry in near future which proves to be very beneficial for this sector. The major growth
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barrier of E-commerce industry is lack of product intangibility which restrict people to purchase
luxury commodities online. This barrier may be removed with the establishment of physical
stores. Apart from this, the complaint handling through robot will provide quicker and reliable
solution to customer problems. These innovations will be beneficial for Ebay, as by offering its
own brand product company can enhance their profit (Pyroh and Horyachka, 2016). Apart from
this it doesn't require to invest over promotion and other promotional activities. In addition to
this by setting up its physical outlets, Ebay can enhance its customer base even by selling luxury
products. The AI customer support services will simplify the process of complaint handling
without arranging larger workforce.
The Organisational Innovation Requirements 2020 and Beyond
eBay Inc. is an online auction service based company which deals in offering product or
services to its customer over internet. Company continuously emphasize over improving its
current process as well as services in order to sustain its business within such competitive
market. eBay belongs to E-commerce industry which is one of the fastest growing sector and
anticipate frequent changes in term of technology for enhancing the quality of operations
(Ackley and Aparo, eBay Inc, 2016). So, in order to keep its business technologically advanced
and competitive in marketplace, it is required to bring innovation in its current processes to
survive in marketplace. The innovation requirement can be better analysed through using porter's
five force model which perform an evaluation over industry and identify the opportunities
present in front of company. Following are the factors that are included in Porter's five force
model: Competitive rivalry:- The competition present in front of eBay is relatively higher as
there are number of competitors present in market which offer innovative and satisfactory
services to customers on regular bases. Bargaining power of buyer:- The customers relatively have stronger bargaining power as
the switching cost is low because they have various options to choose for their online
shopping. Bargaining power of supplier:- The suppliers have moderate bargaining power as there
are number of suppliers present in front of eBay to which they can switch whenever
required.
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 Threat of new entrant:- The risk related to new entrant is moderated as the competition
is relatively higher and to enter into such saturated market huge investment is required to
position as well as market product.
 Threat of substitute:- eBay use to sell variety of product which in turn moderate the risk
of substitute product as other players are also selling similar products. Therefore eBay
has a chance to expand its product list whenever required by customer this support them
in adapting to changes.
From the above analysis it has been analysed that the competition from existing players is
relatively higher that may affect the sustainability of business within marketplace. So in order to
deal with competition and changing customers demand it become very essential for eBay to
bring innovation at marketplace. Following are some innovation that eBay can bring in its
current business process to enhance customer experience: Fly Drone:- The increasing demand and competition within the E-commerce industry
raise the need of innovation among the player in market. For surviving in this competitive
environment eBay can use flying drone as a medium to deliver the product to its
purchaser. This innovation process will be fruitful for eBay because flying drone is
gaining popularity from the event like delivering the first aid to people who got trapped
in disaster (4 EMERGING ECOMMERCE TECHNOLOGY INNOVATIONS, 2018).
So, people will easily accept this innovation. This flying drone will deliver the ordered
product at customer's place and also provide them an option to pay through card
swapping. This feature will aid toward the development of E-Commerce industry as the
innovation work toward increasing competition within industry. This in turn will
encourage other player to bring more innovation to remain competitive and this
contribute toward expansion of industry. VR, AR and wearable devices:- Virtual reality is not more a science fiction as it now
become a part of human life. These technologies are now used by people as a medium of
their entertainment and most demanding innovation within the society. This innovation
can be used by eBay to enhance its quality of services and current process. By assessing
this feature, user will be able to link images with real world which provide a seamless
experience to customers (The Future of E-commerce: 2020 and Beyond, 2018). As
virtual reality will provide customers a chance to see how product like apparels, jewellery
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and other accessories look in reality. This will help in encouraging customers to purchase
product online instead of visiting physical store which in turn will support in growth and
expansion of E-Commerce industry.
 Selling based on mobile location:- Mobile has now become a major source for assessing
the E-commerce services which eBay can use to enhance their processes as well as
operations. The company is now planning to improve their process in order to increase
their customer base where eBay will excess the location of its customer and provide them
suggestion regarding nearby stores (5 New and Upcoming Waves of Innovation in
Ecommerce. 2018). Under this customers will be notified with information regarding the
stores and offers will be provided to them when they visit those store with reference to
company. This will make it easier for customer to purchase product or services (Grewal
and et. al., 2016). This will also benefit the industry by connecting online and offline
stores together, which remove the barrier to customer choice i.e. “Product intangibility”.
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Building the Future Innovation Capabilities for the organisation
eBay is an E-Commerce corporation which operates toward consumer to consumer and
business to consumer sale using their website. But being a player within such a competitive and
continuously growing sector, it is very crucial for eBay to build up capabilities for dealing with
future competitions. This will support company in achieving sustainability in market place, as
rivals are continuously brining new innovation for improving their quality of services and for
eating one another's market share (Grewal and et. al., 2016). So by bringing continuous
innovation in their processes, eBay will be able to capture larger market share along with higher
customer satisfaction.
For implementing any innovation effectively, it is very essential for a company to
formulate strategy to determine feasibility of idea and direction to work. Hence, eBay is required
to develop a road map of innovation which depict about actions to be taken for achieving desired
result. Following are the steps which are included in road map of innovation:
Suggestion and reason:- eBay is planning to bring innovation in its current process for
achieving competitive advantage, it is recommended them to adopt Flying Drone as an option for
delivering its product at customer's place. The reason behind this option is that, Flying drone is
gaining attention within the society as a source of making things available to people who need
help by providing first aid facility, food etc. So people will be more excited to see a flying drone
as a delivery option. Apart from this it will also reduce the chance of cybercrime or hacking of
customer's financial information which has now become a major barrier to the growth of E-
Commerce. Because this drone will provide two benefits to customers, firstly it will reduce the
delivery time and secondly it will provide payment option where user can pay through card
swapping after getting their product delivered.
Impact of changes:- For introducing this technology by 2020 to marketplace, eBay is
required make several changes to its current operation and processes (Blanchard and et. al.,
2017). Following are the factors that eBay must consider for developing the capability in order to
implement future innovation:
 Research & development:- For bringing innovation, R&D department plays an essential
role by collecting and analysing the information regarding the marketplace. This will
support in identifying the requirement of innovation and ways to implement those to
achieve positive outcome. For bringing this flying drone as a delivery option, eBay is
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required to bring several changes in its current R&D operations (Spieth, Schneckenberg,
and Ricart, 2014). The company is required to either hire new experts or work toward
improving knowledge, skills as well as capabilities of its current workforce for
implementing this innovation.
 Required resources:- For bringing new innovation, eBay required number of resources
to implement and develop this flying drone delivery option. Major resources which are
required by company is capital, human resources, machineries in tangible resources and
knowledge, skills, software etc. in intangible resources (Zarli, Bourdeau and Segarra,
2016). So, eBay is required to hire high skilled and competent workforce which have a
thorough knowledge about this field so that they will be able to implement or manage this
innovation successfully. In order to arrange these resources eBay require more financial
resources.
 Technical skills required:- eBay requires some sort of technical skills in their
employees for implementing this flying drone innovation effectively. As the actions
performed by this drone will be handled through software, so company require software
managers and range of expertise for operating this operation successfully. Skills required
by these technical staffs are programming skills, data management and analytics etc. Legal aspects/compliances:- For implementing this change, eBay also required to
consider some legal aspects along with arrangement of resources. As for introducing
Flying Drone in market, eBay is required to take permission from government and need
to comply with some laws. This includes, intellectual property law in which eBay must
ensure that all the legal standards under this law should not be violated by the practices
performed by company.
Feasibility:- Once the market has been analysed and information regarding resources
required for implementing the innovation is interpreted next step is to evaluate the feasibility of
this innovation plan within marketplace. This evaluation will help in determining the soundness
of project that whether this will work in work in future or some modifications are required to be
done. This is one of the most crucial step within the roadmap as it focuses over determining the
effectiveness of plan. Following are the sectors involve in this feasibility analysis:
 Economical:- This analysis will focuses on analysing the current financial position of
eBay in order to determine whether the company have sufficient fund to adopt this
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