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Published by: business_mba on Sep 21, 2009
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e-Bay King of the Online Auction

Introduction e-Bay is considered as one of the most well known e-business in history of the Internet. It is a company that offers an online auction that connects its customers that are separated by time and space. It covers the traditional face-toface traditional transaction of buying and selling, therefore making the lives of their customers easier, thus help them save money. After the success of e-Bay, electronic auction had become popular around the world, however, e-Bay maintains its position as the number one successful Internet auction site. e-Bay was born over Labor Day weekend in 1995, when a computer programmer, wrote the code for an auction website that he ran from his home computer. Since then, it has become the largest place to buy and sell in the world, with a huge community of regular people, small businesses and even big businesses from all the continents in the world. In addition to that, the company is also offering wide varieties of products and services. In 2007, the company is present in 39 markets, including the US, with more or less 84 million active users around the world, thus it had helped e-Bay to become one of the important factors that changes the face of e-commerce. During 2007, the total value of the sold items on the website’s trading platform was already $60 billion. It shows that e-Bay users in the world are trading more than $1,900 worth of goods and services on the site every second (2008).

The mission of the company is to provide a global trading platform where anyone can trade anything. Thus as a result, e-Bay is considered as the largest marketplace for rare, discontinued, collectible and even rare items, no matter what the type or price. The website gives benefits for the customers by providing an open trading platform where the market determines the value of items that are being sold. Thus, it had become the cultural barometers of sort, thus provide a view into what objects the consumer wants at any time. Development and Implementation of Different Strategies The strategies of e-Bay focus on three important strategic level. In terms of corporate level strategy, the company focuses on diversity which focuses on their customers, product range and their business as well as market. The company also focuses on having different strategic business alliances with different organization. In terms of business level strategy, the company focuses on broadening their differentiation strategy by offering vast selection of products, focusing on the eBay community, improvement of eBay website, using the brand image and reputation of eBay, and the most important thing is the process of global reach. Global expansion is one of the most important strategies of the company, and in order to cope with it, eBay is focusing on different strategic business analysis. In 2001, the company announced a strategic alliance with Microsoft in order for the two large company to jointly expand their global online presence at the same time improve the e-commerce experience of the customers. The two

company worked together in order to enable the online buyers as well as sellers to seamlessly interact across the multiple websites and use different applications anywhere in the world. On the other hand, e-Bay supports the Microsoft® .NET technologies and the first website in the world to offer the Microsoft® communitybased commerce engine to Web developers as an XML-based web services; the e-Bay marketplace is integrated to the web properties of Microsoft®; and e-Bay uses different Microsoft® technologies such as Windows Server and Passport ( 2001). The said action was followed when e-Bay enters strategic alliance with the Zoovy, Inc, one of the leading providers of right-size d e-commerce™ solutions. Zoovy integrated its proprietary e-commerce web storefront, on-line payment processing, auction management, inventory management, sales order processing and the customer relationship management tools through the e-Bay’s Developers Program that gave Zoovy an access to the Application Programming Interface tools of e-Bay 2002). Then in order to broaden the company’s offering by adding the service of Business-to-Consumer, the company had an alliance with the PFSweb, Inc., a leading provider of business process outsourcing solutions. It had helped the PFSweb clients to utilize e-Bay as a channel to distribute their products (2002). In addition in 2006, e-Bay announced its strategic alliance with Yahoo! Inc., the largest online media company. Under the said partnership, Yahoo exclusively provides online banners as well as graphic advertisement at e-Bays

site. In return to that, Yahoo! promotes Paypla, the e-Bay’s online payment service as the preferred payment provider for purchases that are made online on the Yahoo! website ( 2006). Aside from that, it is also important that the company is using its strengths in order to maintain their competitive advantage by implementing different strategies. First is that due to the different strategic alliances with different huge corporation, particularly companies with huge and trusted name in e-commerce industry, and the entire Information System industry. And because, the company also handles Pay Pal, it is being used as the billing method in different transactions between customers and between company and customers, making them to acquire great strength of accuracy of billing. In order to grow the business to 27 sites outside of the US in just 5 years, eBay created a playbook. This playbook allowed eBay managers to reference the right conditions for their scope. The scopes included product management, web development, and internet marketing to name a few. Sharing information of various scopes and countries in the playbook gave eBay a competitive edge in the marketplace Competing on the Edge Approach There are different external and internal factors that can greatly affect the overall operation of e-Bay including the growth of the market, changes in

economic and financial condition of the world and the changing lifestyle preferences of the customers. Thus it is considered by any company, in any industry and any nation, that change is pervasive. Thus, it will be important for the company to react quickly, anticipate when it is possible, and lead the change when it is applicable. Thus, competing on the edge is considered as unpredictable, often uncontrolled, and often inefficient and it is applicable when change is pervasive ( 2008). It is important to consider that the key to developing competing on the edge strategy is to think in terms of growth, and not assembly. Thus, competing on the edge is all about change, that why in creating it should be much close to growing a living a thing than assembling a machine ( 1998). There are ten rules that are included in the process of competitive-edge approach. Advantage is considered as temporary, thus strategy is considered as diverse, emergent and complicated. Next is that reinvention is the primary goal, and it is important for the company to live in the present, thus stretch out the past and reach into the future. That is why, it is important to consider that time pace always change. It also focuses on the leadership, where in it is important to consider the growth of the strategy, and then drive the strategy from the business level. Thus, it is important to repatch the businesses to markets and articulate the whole (2008). In building blocks, it is important to consider that there are the conditions of e-Bay that are visible in the building blocks such as the gaining of advantages

of the past and then winning tomorrow today. First is the gaining advantage f the past by regeneration, natural selection, genetic algorithms and modularity. In terms of strategy, the image and reputation of the company plays a very important aspect, particularly due to the fact that the company is considered as the founder of the said type of e-business. In addition, the different strengths of the company such as their technological knowledge and skills, together with their customer relationship with the great human resource or labor force are a very important aspect. On the other hand, the winning tomorrow today by experimentation of options and learning also reflects on the development of technologies and applications in the company. This can be seen in the initiatives of e-Bay to have strategic alliances or partnership with different major players in the industry. Thus, it helped the company to improve their system, particularly the security and effectiveness of the website. The said aspect is considered as the center or core innovation aspect of the company due to the fact that the performance of the website can greatly impact their overall performance, their relationship with the customers as well as the position as one of the greatest e-businesses in the history of the Internet. e-Bay and the Midas Touch It is important to consider that the strategy of Midas focuses on the usage of leading-edge technology all the way. This can also be seen in the overall

management of e-Bay by looking at their initiatives in different strategic alliances to different leading IT and e-commerce companies in the world. On the other hand, it can be seen that the managers of both the company craft aggressive and first strategy that will focus on the state-of-the-art technology in order to make the things happen. In the case of e-Bay, it can be seen in their initiative to have the direct customer-business relationship by having a partnership with Zoovy, by applying updated and efficient systems that are related with the process of centralizing the entire subsystems of the website, therefore, enabling security and efficiency of the company. In addition to that, like the Midas, e-Bay is also blending its old and new strategy in their core business strategy as well as in the process of diversification ventures. As a result, both of the company relies on the past in order to build a new decision or innovations from the past performance. On the other hand, unlike the Midas, the e-Bay is not drawing a test of the new strategies or innovations towards the customers. However, like Midas, the company focuses on their great team or human resource by making sure that all of the staffs of the company are great or fitted to their positions. As a result, it enables the company to have a competitive advantage due to the fact that it can add up to the motivations of their employees, that will later on reflect to their individual performances, and will later on reflect to the overall productivity of the company, then competitive advantage that will help the company to maintain its position in the global market.

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