Core Competencies of Ebay

Core Competencies of EbayIn this report, in that respect is an analysis about the globose company eBay. In the content, eBays midpoint competency, recite cosmic string, and the ch tot aloneyenges that eBay look will be illustrated and analyzed in order to get more understanding of the differences with the early(a) companies.Also, there is a local company Charles Keith is selected to do similitude with the eBays globalized dodge. After comparing severally other dodging, then there will be the critical analysis of it that whether the strategies argon get used by each others.This analysis helps to illustrate an international telephone line how it plant life like. Meanwhile, it gives the understanding about the core competency and mensurate set up are the key components to pee-pee greater repute to customers.IntroductionIn pace with fast growing of technology, convenience is given broadly by accessing the internet for chatting, e-mailing, video conferencing, til now making online deliverment, online shopping, online sell, and other e-business activities. In todays warlike business market, eBay is one of the successful e-commerce online auction sites which was founded by Pierre Omidyar (Cohen, 2002).In 1995, eBay was officially built as an online trading platform that operates person-to-person trading in a web-based auction format forum by Pierre Omidyar. As a matchmaker, eBay provides a stage for sellers and buyers to connect in worldwide, however, it could be individuals and businesses involve in buying and selling variety of goods and service. Invisibly, eBay provides a place where buyers and sellers can conveniently meet, exchange reading about goods and prices, manage sales at minimum costs, and made collecting and bargain hunting fun (Bunnell and Luecke, 2000, p.14).In the worlds largest online market, as pioneer as eBay is, its virtual setting where capital, desire, and identity converge has progressed into a global economic, social, and pagan phenomenon (Hillis, Petit, and Epley, 2006). According to eBay self-characteristic which is leading a universal shopping destination on the internet virtually that has seen a driving force of global e-commerce. However, for surviving in the global market, eBay acquired PayPal in 2002, to enable any person or business with an e-mail address to send and receive payments online securely, easily, and quickly. Besides, eBay also acquired SKYPE to rear its operation thus maintain a certain service standard (Daniels, Radebaugh, and Sullivan, 2009).Due to a global e-commerce business that eBay pursue, comparatively, challenges about edition parcel, digital divide, cultural attitudes about e-commerce, g overnment regulations, and the pace of international expansion are probably to be seen as obstacles in development (Daniels, Radebaugh, and Sullivan, 2009).Core Competency of eBayIn the shimmy of eBay, the core competency which will be analyzed in here is similar to the company s internal factor strength. According to Hitt, Ireland, and Hoskisson (2009, p. 103), core competencies are resources and capabilities that seen as competitive advantage for the firm over its rivals, meanwhile, it is a shelter-creating strategies to satisfy customers needs. In order to meet customers prospects across time, constantly improve, innovate, and upgrade their competencies is needed. Being a strong core competency, it must acquit some significant components which are including the perceived customer benefit of the end crop and difficulty of imitation (Hiebing and Cooper, 2004).For the sake of further growth and steadily keeping the first leader position up in the e-commerce industry, the core competencies of eBay stick outAn efficient distribution formation with developed proprietary softwareIn eBays own website, there are series of stages that allow sellers to design, build up, monitor, and organize their particular auctions to sell outstanding thematic goods for t hose buyers are willing to pay a superior price on it, whereas, buyers used eBays software to search products and place bids (Daniels, Radebaugh, and Sullivan, 2009).A developed proprietary software which is scalable, full-bodied, user interface and transaction-processing system that handle all aspects of auction process (Figure 1). For example (Figure 2), it sends e-mails when users register for the service, place a successful bid, and outbid. Moreover, it sends daily status updates to active sellers and bidders and maintains user registration information, direct information, current auctions, and historical listings (Bunnell and Luecke, 2000, p.32). It provides convenience for some(prenominal) sellers and buyers to access eBay to check up the spick-and-span status whenever.Figure 1 Auction Process (I)Figure 2 Auction Process (II)Global ReachWith the mission of offering global trading platform where anyone could trade whenever at anywhere, eBay acquired the leading auction webs ites in 23 countries such as Australia, Belgium, Canada, France, Germany, India, Ireland, Italy, South Korea, Singapore, Spain, Sweden, Switzerland, Taiwan, and the United Kingdom. People could find strange and cheaper products from eBay because of its global capability (Daniels, Radebaugh, and Sullivan, 2009).An Extensible schemaAs a monopoly in Americas online auctions, eBays protrusible strategy has provided variety of products, services, and markets. in that respect are around 12 million online auctions set up in diverse countries and has divided into 18,000 different categories. Almost orgasm 2 million of new items are provided for sale likewise, there are 62 million registered users from eBay are glad to find the items here too. Thats why the competitors such as Yahoo and Amazon are hard to access in the auction market to grab the market share (Dror, 2003).Acquisitions and alliances with companiesBy associating Square Trade, Auctionwatch, AOL (Nerney, 1999), IBM (IBM and eBay process Broad e-business Alliance, 2001), Yahoo (Yahoo and eBay seal online deal, 2006) and acquired PayPal and Skype (Daniels, Radebaugh, and Sullivan, 2009) eBay has beneficially meet the customer satisfaction meanwhile obtain the greatest propagation to the users.Strong trade name identity and scienceA powerful and highly recognized brand name commonly results in greater unit sales and allows the seller to charge a premium over off-brand competitors (Bunnell and Luecke, 2000). eBay could have strong brand recognition and well known by community are attributed by its global expansion and building up a strong user base. There is 67 percent market share from brand identity of eBay (Lee, 2007).eBays lever ChainFigure 3 Porters Value Chain ModelIn the Porters value set up (Figure 3), it is a model to analyze the organizational process as activities that the firm to has the competitive advantage and create value for the customer (Michael Porter Value Chain Model Framework, 2010). By analyzing the primary activities, eBay could able to see where the value can be added, thus, allow the business to achieve a sustainable competitive advantage. Therefore, value chain becomes an important key tool for any type of organization (Wickramasinghe and Lubitz, 2007).The margin (Figure 3) is as alike as added value, while the firm is divided into primary activities and support activities. Primary activities offer the customer a level of value that exceeds the cost of the activities (The Value Chain, 2010) includes incoming logistics, operations, outbound logistics, marketing and sales, and service. On the other hand, the support activities are supporting the primary activities to make sure these activities that a firm has the opportunity to create greater value. Also, a competitive advantage may be attained by reconfiguring the value chain so as to provide lower cost or better differentiation (The Value Chain, 2010). In the following page, there is a value chain analysis of eBay that how it works with the value chain (Figure 4).Primary Activities (Bidgoli, 2004 ) inbound Logistics Internet Links facilitate postal serviceing of product information. Listings of products describe to customers.Operations(Value Creation) Database search engine allows easy access to products. Dynamic pricing allows for bidding to receive market price.Outbound logistics Distribution is facilitated or the responsibility of seller. Escrow system attempt to limit fraud.Marketing and Sales Having first mover advantages and advertising to create brand name advantages. Forums allow for community development.Service Database supported reports on sellers and buyers. eBay community that people interacted with each other under a set of shared rules and expectations. attendant Activities (Gopaikrishnan and Gupta, 2007)Procurement Does not take possession of the items being sold, thus reduces inventory management costs. Secure the lowest possible price for purchases of the highest possible quality.Technology using Uses online option to innovate, to reduce costs and to protect and sustain competitive advantage. Includes internet marketing activities, lean manufacturing, customer relationship management (CRM), and many other scientific developments.Human Resource Management Developing a community whose members are unknown, trust among traders.Firm Infrastructure-Management Information System (MIS) for planning and control-Operated more like a newspaper-classified section, it facilitated person-to-person transactions but did not get ownership of the items being sold.Figure 4 -eBay Value ChainThe function of value chain is to reduce the cost and create as well as enhance the differentiation. eBay configure with its value chain activities which around the global world, the aim is to maximize the perceived value for its global users and lessen the costs of value making. By having the primary activities, coordination of the value chain is significant with the use of supporting activities which integrated all the activities into a solid whole.There are several factors bear on eBay to configure value chain globally are including cost/price issue, business environments, translation software, logistics, and customers needs.Cost/Price issueAs operates a global networking, the currencies exchange rate, different wages rates in different country, inflation rates, and government regulations have deeply influenced the costs of the business expending as well as the price setting.Business EnvironmentValue chain is configured in order to have strong competence to confront to the competitors like Amazon.com and Chinas website Alibaba.com. By operating flexibly, it would able to help eBay to accession the competitive advantage.Translation SoftwareDue to eBay acquired auction web sites in many different countries, the language used in the website also would be different that each country has their own native language. Therefore, value chain hel ps to maximize the technology development and thus offer convenience to customer.LogisticsHave shown graph (figure 2) and mentioned how the eBay works. There are inbound logistics and outbound logistics. Therefore, value chain is configured to control the operation and minimize the cost on the way that eBay operates its auction website. Besides, it maximizes the perceived value to users by creating value to them through the updates status.Customers NeedsAs mentioned before, eBay has the largest user base. To fully maximize the value to the customer and understand what they want, it is necessarily to configure value chain. By establishing those value chain activities, those have influenced and shorten the withdrawnness between the users. It is a key factor that influenced not only a single country but it is useful to be configured in all country that eBay entered.The more eBay expand the more eBay coordinate. Coordination is a crucial part in conducting a value chains model that how it helps to combine all the activities and works with the core competencies effectively and efficiently. If the coordination is well done in the value chain, the market share of eBay will be boosted up absolutely. There are several factors affected eBay to coordinate the value chain activities are operational obstacles and national cultures.Operational ObstaclesAs acquired many leading auction website, the communication in verbal and communicatory have set up a barrier towards success. It is because misunderstanding the particular local language will hinder the related information of the products or service. Besides, the currentness exchange rate measurement systems also bring out the problem that has made users confused about the price indeed. The government regulations also acts as a main role in this factor that some countries have their own unique legal that some products are prohibited to enter.National CulturesDifferent countries have different culture attitudes and percepti ons. For example, most of the Asian countries like China and Japan they may not comfortable with purchasing the product through website that without touching the product in reality. Or even China, they already have their own local leading auction website alibaba.com. Therefore, coordination of the value chain is critical to be adopted in eBay to confront the dilemma.eBays Value Chain is Characterized as VirtualIn the e-commerce business industry, eBay is a Web-based forum business that the firm is not producing any product and it scarce acts as a matchmaker or middleman to help its users who are either individuals or businesses to conduct the auction and provide a place for people connecting to each others in worldwide.eBay achieves competitive advantage and create value to the customer just only by keeping applying the extensible strategy to generate new products, services, and markets. Due to e-business matchmaker eBay special business characteristic, it supports communication t o value-oriented buyers and sellers, sustains the principles of trust and safety, guarantees low fraud losses and high security to its community transaction process by delivering state-of-the-art information technology (Daniels, Radebaugh, and Sullivan, 2009).In here, eBay is characterized as virtual value chain because of some reasons which are illustrated in the following.An online based only e-commerce business in the virtual marketspaceeBay is centralized its business in an online trading platform that only posting information of product and service or other comedies to its users. In the E-marketplace, it providing information merely to the community is not counted as producing products also, eBay do not has any ownership to the physical product. eBay just acts as a catalyst between the sellers and buyers (Bidgoli, 2004).No economies of scale and scope is applied to the virtual value chain (Heterick and Twigg, 1999)It is because eBay pursue a matchmaking service that charges the closing auction price to gain the revenue only.There is no input and output (Heterick and Twigg, 1999)As mentioned that there is no any product is amazed by eBay and it is launched as an online trading platform that conducted in the forum.Creates value chain through five activities that different from the traditional value chaineBay gathering and organizing information of the sellers product into a database then buyers can pick what to bid on. eBay synthesizing the bespeak information to buyers also. Besides, eBay also gathers, organizes, synthesizes and distributes information about the complaint from both sellers and buyers (Rayport and Sviokla, 1995). From these several activities, these have created value to the users to show loyalty and trust on eBay.Implications to the Challenges IdentifiedThe challenges confront in the case of eBay are including translation software, digital divide, cultural attitudes about the e-commerce, government regulations, and the pace of internatio nal expansion (Daniels, Radebaugh, and Sullivan, 2009). Moreover, different currencies, customs regulations and inspections, and trade rules produce substantial barrier to eBay. Those are discussed in the belowTranslation softwareAs a global trading platform, eBay has to face the problem that describing the auction post into particular native language in order to be understood by those native languages of potential buyers. Yet, there is limitation of the translation software that ordinarily imperfectly depicts the native language has become obstacle for eBay to its global strategy (Daniels, Radebaugh, and Sullivan, 2009).Government regulationEach country presents unique cultural and legal challenges. It is a big issue that whether the product or service listed in the auction platform can be exported or imported to the countries (Daniels, Radebaugh, and Sullivan, 2009). For example, a French measure was faced a problem that the Nazi memorabilia is prohibited to enter in France.The digital divideMostly it will be faced in the growth countries like India and China that they mostly do not own their computer and the credit card as well. Due to the different level of economic coach and lack of internet access, it is hard to enter into the particular country and that would be a risk.Cultural attitudes about e-commerceIn high uncertainty-avoidance cultures country like Japan, India, China, even the half of Asian are distrustful of e-commerce transactions. They tend to purchase the items that are new (Daniels, Radebaugh, and Sullivan, 2009). Sadly, eBay was suffering in the problem that the online trading is not attracted by them. footprint of international expansionDue to expand the business to the overseas is seen to be too rushed as a result, it brought out the difficulty for acquisition. The premium paid to acquire the foreign operation is getting development (Daniels, Radebaugh, and Sullivan, 2009).According to the eBays global strategy, majorly, eBay is ca rried out an AAA global strategy. These AAA represents acquisition, activation, and activity. There are some implications to the challenges in today and in the future are shown in the followingMay lose the users as well as the customers loyaltyIf the translation software is not fixing well, it will probably influenced the users move to the another auction forum to continually their business. Invisibly, it gives the chances to Amozon.com to grab the market share from eBay. Besides, without the convenience that eBay gives, users will lose the uncomplaining to eBay and shift their loyalty to the competitors.May earn an additional price from the translation and market share from developing countriesIn the future, by helping the user translate the post meaning to him or her familiar language with a few dollars charges will help eBay to have another value chain activity to increase its value. Also, continually operate eBay auction forum in India and China would able to gain access into t his tough market that their population all are kind of high.Without knowing the country legal may get in problemeBay must respect and recognize to each country legal environment in order not to against with the countrys legal issue. From the experience, eBay must try to improve and enhance the relationship between each countrys governments.Gain education experiences to the cultural attitude forward entering the particular country, eBay must do a critical Pestel analysis about the country so as to eliminate the chances to face the loss. Through the learning experiences in Japan, eBay learned the different cultural attitude and their behaviour. In the future, eBay is able to be knowledgeable before it decides to enter a new expansion.The Comparison of the Globalized StrategyThe local company which is being picked up is Charles Keith. Charles Keith is a Singapore based fashion company. It is well known by selling the womans footwear and accessories. In today, Charles Keith has bee n over 170 franchises worldwide and be one of the successful story in the international chain. Its global expansion started at 2000, the outlets in 22 countries including Japan, Brunei, and Indonesia (Ramlan, 2010).In the following, there is a table (Figure 6) that showing a comparison of the globalized Strategy between eBay and Charles and Keith.AcquisitionFranchisingActivationPartnership with DBS Bank (Charles Keith ups ante by venturing into Asia, ME Europe, 2010)Activity combine of affordability and design (Tan, 2009)Recruiting Japanese and others nationality (Tan, 2009)Standardization of employees and serviceFigure 5 Comparison of Global StrategyAs a result, there is no similar globalized strategy between eBay and Charles Keith. It is because eBay and Charles Keith are serving in different industry and their value chain is totally different. Why? It is because eBay only offers an auction website for the buyers and sellers to make business transaction. Its value chain is vir tual value chain. On the other hand, Charles Keith is doing business in fashion industry that they produce, design, and selling by themselves. It is a traditional form of value chain that has input, output, economies of scale or scope.If eBays acquisition strategy is applied into Charles Keith to develop its expansion to overseas, it will be succeeded in spending enough amounts and having a work Pestel analysis before entering a particular country. While, if Charles Keiths franchising strategy is applied into eBay, it will not be succeeded. It is because the eBays business model and the whole operation are cannot be franchising due to its special e-commerce background.Secondly, eBays activation is advance to apply in Charles Keith because the strategy is aimed same perspective. In eBay, its activation is aimed at increasing the users participants like sellers and buyers. Therefore, to increase customers purchases, Charles Keith is possible to apply it. While, Charles Keith s trategy that partnering with DBS Bank is encouraged to be applied in eBay in order to get enough investment.Activity of eBay also is encouraged to be used in Charles Keith in order to increase the volume of sales. While, combination of affordability and design is not encouraged to apply in eBay since they are different categories of business. Continually, the overseas recruitment is encouraged to be applied in eBay so as to get more understanding of the particular country culture. Lastly, that is about the standardisation of product and service, in here, although the industry is totally different but they still can use same concept that is standardization to their service in both company.ConclusionIn conclusion, by analysing eBay business, it makes a lot of understanding about the company working in the global world. Core competency and value chain actually are having some integration, this two components are the key components that the company how to create the greatest competiti ve advantage and create value to the customer. Thus, it benefit customer, as long as get used to it, the customers show the loyalty to the company too.At the last part of the comparison of the globalized strategy, that is an interesting part that actually the globalized strategy between this two company all are having the fundamental concept that is how to increase the customers and the market share throughout the worldwide.