Analysis of Innovation and New Technologies: eBay vs. Amazon

This report provides a comprehensive analysis of the competitive landscape between eBay and Amazon, focusing on innovation and new technologies. It begins with an introduction highlighting the importance of innovation for business success and then includes a mind map to visually represent the challenges and solutions for eBay. The report explores the innovative and technological components utilized by both companies, emphasizing Amazon's strategic advantages. It delves into the concept of sustaining innovation, outlining how eBay can re-emerge in the market through redesigned marketing strategies and product offerings. The report also details methods to measure the effectiveness of these solutions, such as customer reaction, financial statements, and customer satisfaction. It also addresses the difficulties eBay has faced and concludes with a summary and recommendations for future strategies. The analysis is supported by various research papers and provides a clear understanding of how eBay can compete with market challengers by leveraging new technologies and strategic innovations.

Running Head: Innovation and New Technologies
Innovation and New
Technologies

Innovation and New Technologies 1
Table of Contents
Introduction...........................................................................................................................................1
Mind Map..............................................................................................................................................1
Innovative and technological components used by eBay.......................................................................2
Sustaining innovation............................................................................................................................3
Ways to measure the effectiveness of the solution................................................................................4
Difficulties faced...................................................................................................................................6
Summary...............................................................................................................................................7
Conclusion.............................................................................................................................................8

Innovation and New Technologies 2
Introduction
Innovation and new technologies are the vital part of an organisation to remain
successful and make a good place in the market. The report contains the analysis of eBay and
Amazon and their market place. EBay is an incumbent as they have been beaten by Amazon,
due to the innovative and creative ideas that have been used by Amazon. The report
comprises upon the solution provided to eBay to re-emerge in the market and occupy their
place back (Bitner, Patrıcio, Fisk & Gustafsson, 2015). The solution provided was based on
sustainable innovation which proved to be beneficial for the company. The effectiveness is
measured upon various factors like customer’s reaction, financial statements and traffic
analysis. Thus it can be stated that while challengers may beat the incumbents in the market
there are various ways by which they can re-emerge in the market (Jones & Klofsten, 2016).
Mind Map
Mind map is an effective way to brain storm without worrying about the flow of
information. It helps in visually the ideas and future analysis the idea in a better way. Mind
map in this is used to depict how the solution came up and links the idea of challenges of
eBay in a proper layout (Wong, 2017). A mind map helps in depicting clustered information
into a more creative way that helps the brain to do the task in an appropriate way.

Innovation and New Technologies 3
Based on the research of eBay and amazon, various strategies have been provided to
beat the challengers in the market. Various solutions have been provided to the company to
deal with the internal and external factors and achieve the sustainable growth. It was provided
that eBay can enter the market by innovating new services (Chang, Chiu & Huang, 2018). It
was recommended that eBay should increase the degree of decentralization as it will provide
flexibility to customers. The solution for eBay to beat amazon was to expand the business in
international market. These solutions will help eBay to compete with other companies in the
market.
The solution provided in part B came up by performing deep analysis of both the
companies. Environmental analysis tool were used to find the issues and helped in providing

Innovation and New Technologies 4
solutions regarding how incumbent beat challengers in the market should (Stokhof, Vries,
Bastiaens & Martens, 2017). The challenger here is Amazon and incumbent is eBay.
The analysis that came up with performing PESTEL analysis was that eBay suffered
from political controversies due to poor quality of products. The exchange rates taxes and
other revenue prospects were impacting the growth of eBay. The changing of lifestyle and
demands of people has increased the business of eBay as they sell their products online.
There were various legal trust issues that didn’t help the business to grow. The solution came
up with SWOT analysis was that eBay should provide advance security. EBay can beat the
challengers by turning out to be a retailer and improving the portfolio by increasing the
products and services. Amazon has expanding the business by opening stores in various
nations’ similar need to be adopted by eBay.
The solution gained from these strategies helped in understanding the competitive
market of the eBay and how amazon took the place of eBay. Mind map helped in depicting
the challenges faced by eBay to compete in the market (Aydalot & Keeble, 2018). EBay can
facilitate better by evaluating these strategies and can help it to re-emerge in the new market.
The research helped me to know that the implementation process of eBay is based on
development and developing applications with innovative strategies.
Innovative and technological components used by eBay
Ebay is considered as an incumbent and Amazon is the challenger as it focused on the
demand in the market. Ebay was overtaken by Amazon as it offered similar duties in a better
way. Amazon used the innovative strategies to capture the audience. eBay lacked in the
market as they kept on selling the old products and the sale methodology was based on
auction system. eBay was overtaken by Amazon as they used to charge fee. eBay faced the
issue as the planning methodology was not proper (Chen, Xiao & Lin,2018). Sellers started to

Innovation and New Technologies 5
showcases their services and products using Amazon as it has better job policies. Ebay also
lacked in the market due to trust issues as they were found in selling fake goods which
affected the traffic of the site. The customer experience offered by eBay was not u to the
mark. The challengers occupied the market as they offered best quality service at lower price.
Innovation and technological components were designed to amplify the platform of
eBay. Various workshops and presentations were planned to focus on the quality of products
as well as security. They started working on the artificial intelligence which made the
company to serve better results. Innovation use of new technologies helped in broadens the
horizon of the company. Innovation in eBay has helped them to meet the customers’
expectations by increasing the shopping experience (Tobing & Hamid, 2015). eBay have
started use of new technology called as connected glass that helped in offering the digital
storefront experience to customers. It also offered the online payment actions by PayPal
which helped the customers to have a flexible approach. eBay experiences have helped them
in innovating new culture that provided better opportunities to entrepreneurs to grow
globally. It was suggested that eBay should make use of their experiences to improve their
interface. eBay used the concept of decentralization that helped them to re-emerge in the
local market. eBay innovative new technologies by expanding the business in international
market that helped in improving the economic scale. The increased profit margin will be
beneficial for future growth. The innovation components have helped eBay to gain the
market place and development of effective business model is the key to success. Localization
of the business have helped in gaining reputation of the brand. Ebay has developed the
approaches using few techniques of implementation and marketing. Ebay focused on analysis
of requirements in the market and then generating the idea faced on the demand from
customers (Noesgaard & Ørngreen, 2015). These ideas were properly implemented to capture
audience from the market. Implementation process of ebay is also refined as it focuses on

Innovation and New Technologies 6
development and then testing each component so that it avoid the chances of errors
penetrating in the system which may lead to some trust issues. The innovation strategies
focused on the objective to reduce the prices and increase the profit margins. These
innovations in technological development helped in integrating the edges to obtain better
economic benefits. The solutions provided to expand the business in other nations will ne
beneficial as it will help the profit margin to increase. Other than the solution also suggested
that special offers should be designed to capture more audience. Development of digital
technologies helped eBay to face the challengers and know their strategies used to capture
more audience (Ruban, 2016). To overcome the challenger’s eBay stared designing products
and services in a manner to gain the position in the market, this was made possible by
balancing the price and maintain attractive website. These innovative strategies and
development in technologies helped the business to grow globally. It helped eBay to increase
their sale which in turn increases the e-commerce platform.
Sustaining innovation
The solution provided to compete with the challengers is a sustaining innovation.
Sustainable innovation is a process that is covers the entire area of innovation from
incremental to radical. The solution provided for eBay to re-emerge in the market help them
to re-design their marketing strategy as well as re-design their products so that it becomes
feasible (Licitra, Teti, Cerchiai & Bianco, 2017). New products and services designed helped
ebay to satisfy the needs of customers. This helped in achieving sustainable innovation as it
offered higher user experience with higher profit rates. Ebay is now functioning in various
regions that helped them in capturing the market globally. It was suggested in the solution
that eBay should design new products rather than selling the old products. It helped in
crushing the competitors in the market. Sustainable innovation has various components that

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need to be taken acre. It involves sentiment monitoring that helped in collecting the data of
the challengers. This allowed ebay to monitor the feedback received from market and then
design their advertisement and branding campaigns accordingly (Zuckerman & Gal, 2014).
This was a very powerful tool for eBay as it allowed them to provide a broad view of how the
market is reacting to the brand. Innovation will be effective if the challengers are monitored
in an effective way. Sustainable innovation offered various benefits as it allowed the team to
engaging themselves in providing better services. Implementing all the solution was
beneficial for the company as it provided sustaining innovation and created a proper way for
customers to provide proper feedback. The solution for eBay to beat amazon was to improve
the existing market with better values rather than creating an entire new market. This helped
eBay to compete against sustaining improvements of other companies. Sustainable
innovation technique helped in targeting high end customers by offering them better
performance than what was available previously (Rayna & Striukova, 2016).
The solution is sustaining in today market as it focused on expanding the sale to
global market, maintaining the security over the online channels and testing that the quality
of products being delivered is maintained. The solution has helped in sustaining the market as
they designed the products according to the needs of consumers and delivering the products
with lower price (Lacy & Rutqvist, 2015). This help in providing proper completion to the
challengers in the market place by offering better services.
Ways to measure the effectiveness of the solution
There are various ways to measure the effectiveness of the eBay after the various solutions
provided to beat the challengers and re-emerge in the market.
 Reaction- This helps in knowing how the audience have reacted to the change. The
use of surveys or positive feedback helps in leaning about the experience and the

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outcome of the changes. Analysing the behaviour of customers will help in
understanding the impact of changes in better way (Teece, 2018). If the traffic
increases of the site again it can be concluded that the solution had positive effect on
the business.
 Measuring the financial statements- Success of business is directly measured by the
profit margins. If there is an increment in income statement, balance sheet as well a
cash flow system then it can be concluded that business is gaining profit (Norman &
Verganti, 2014). These statements help in checking the profit of the company.
 Customer Satisfaction- If the customers are satisfied with the products and services
delivered in the market. It can be treated as a success point for the business as
customers experience is the key component. Feedback given by customers helps the
service provider to analyse their service as customers help them to improve the
experience. If the customers are satisfied with the services then they will hose ebay
over other challengers (Norman & Verganti, 2014). This would help them to re-
emerge in the market.
 Getting New Customers- if the number of customers has increased it can be easily
figured that business is attaining success.
 Competitive Stance- To measure the success of a business it is necessary to compare
the business with other challengers as it helps in analysing the success in a better way.
The services offered by the competitors and their price is compare with ebay, this
would help in knowing the market place of the business (Comberg & Velamuri,
2017). If the change in market place is observed that it can be concluded that business
has achieved success.

Innovation and New Technologies 9
 Leads Acquired- Analysing the leads of the system helps in analysing the growth. If
innovation and high technology had positive impact on the business it can be
concluded that business have achieved success.
 Customer Conversion- Analysing the customer ratio can help in knowing the
success rate of business (Rayna & Striukova, 2016). If the number of customers has
increased due to new innovative ideas that it can easily be figured out that how the
business is achieving success in the target market.
 Social Media Success- Last but not the least, the success of business in social media
directly relates its growth (Tukker, Charter, Vezzoli, Stø & Andersen, 2017). If the
business is accepted by customers at personal level it will reflect on the social media.
As most of the audience are connected to social media sites.
 Analysing the traffic- The traffic of the website has been tracked. If the traffic has
increased after innovation of new ideas and new technology it can be concluded that
business has helped in achieved success (Smink, Hekkert & Negro, 2015).

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Difficulties faced
There are potential difficulties that might occur while establishing the business. Some of the
challenges addressed by business are:
 Uncertainty- It is true that there is no surety that business will achieve success as
economic climate keeps on changing. The demands of customers changes which need
to be adapted by the business to make sure that it functions properly.
 Financial management- It is difficult for an incumbent to offer services at low cost.
On the other side it is necessary to reduce the cost of products to gain good profit
margins. Reducing the cost of products may lead to lower cash flow in the business.
 Monitoring the performance- it is difficult to monitor the feedback and performance
of the business on regular basis (Smith, Kern, Raven & Verhees, 2014). As the
performance of a business is dependent on many factors.
 Technology- The technologies on which business works changes day by day. Thus
innovating new ideas by making use of current technology is difficult. As they need to
analyze the business on the basis of technology.
 Legal problems- Business face various legal issues that include laws related to
securing customer information and worrying about various operations indulged by
government (Jorna, 2017). As businesses grow with time governmental compliance
appears to occupy a greater share of their leaders’ time.
 Support system- The support system of business need to be strong enough to manage
all the operations and avoid the chances of conflicts. Support system need to check
that business is not facing any copyright issues and on one is using the data in an
unauthorized way.

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 Lack of Knowledge- It is the common challenge faced by the businesses as the
incumbents need to have ample knowledge about the techniques used by challengers
and how they have captured the audience (Jorna, 2017). To make sure that incumbent
beat the challengers in the market a proper research should be done so that they can
adopt those strategies.
 Lack of Direction and Planning- This is a major problem that is faced by a business
as they do not have a detailed business plan designed. Improper business plan can
lead to failures as designing an effective business plan helps in focusing on the goals
and objective of the business (Lopez, Gomez & Naranjo, 2015). Proper planning
helps in determining the financial situation of the business and helps the incumbents
to beat the competitors.
 Innovation- Incumbents due not innovate new ideas they keep on working on the old
services and products. Like considering the case of eBay they kept on selling the same
product by modifying them. Wherein Amazon discovers new offers for customers
which helped them in getting more clients.
Thus there are various challengers that are faced by incumbents to beat the challengers.
To overcome from all these innovation is the key to success for very new business.
Innovating new ideas and offering better benefits to customers helps them in increasing
their growth.
Summary
In this report the focus has been laid on how success of a business is maintained and
how challengers beat the incumbents in the market. In this scenario, we considered the
case of eBay and Amazon where Amazon is a challenger and eBay is an incumbent. The