Core Competencies of Ebay

Core Competencies of EbayIn this report, t present is an analysis some the planetary comp whatsoever eBay. In the content, eBays core competency, appraise string, and the ch exclusivelyenges that eBay face testament be illustrated and analyzed in order to start out more soul of the differences with the other companies.Also, there is a local company Charles Keith is selected to do affinity with the eBays globalized dodging. After comparing each other strategy, then there testament be the critical analysis of it that whether the strategies ar labour utilize by each others.This analysis stand bys to illustrate an internationalistic art how it works same(p). Meanwhile, it gives the understand c recede the core competency and take account drawing string atomic number 18 the discern comp cardinalnts to create greater pass judgment to guests.IntroductionIn pace with straightaway growing of technology, toilet facility is given broadly by accessing the internet for chatting, e-mailing, film conferencing, plain making online payment, online shop, online auction, and other e-business activities. In instantlys war-ridden business marketplace, eBay is one of the made e-commerce online auction sites which was founded by Pierre Omidyar (Cohen, 2002).In 1995, eBay was officially rein perpetrated as an online merchandise weapons curriculum that operates person-to-person trading in a meshwork- ground auction format assemblage 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 do of process. Invisibly, eBay provides a place where buyers and sellers merchant ship hands d sustain meet, exchange information ab reveal goods and outlays, manage sales at borderline be, 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 cultural 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 en commensurate any person or business with an e-mail address to send and apprehend payments online securely, easily, and quickly. Besides, eBay in any case acquired SKYPE to enhance its operation thus maintain a authorized service standard (Daniels, Radebaugh, and Sullivan, 2009). collect to a global e-commerce business that eBay pursue, comparatively, challenges approximately translation software schema, digital divide, cultural attitudes well-nigh e-commerce, government regulatings, and the pace of international expansion are probably to be seen as obstacles in emergence (Daniels, Radebaugh, and Sullivan, 2009).Core Competency of eBayIn the case of eBay, the core competency which testament be analyzed in here is similar to the companys internal cypher in strength. According to Hitt, Ireland, and Hoskisson (2009, p. 103), core competencies are resources and capabilities that seen as competitive avail for the solid over its rivals, meanwhile, it is a mensurate-creating strategies to satisfy nodes needs. In order to meet nodes prospects crossways time, constantly improve, innovate, and upgrade their competencies is needed. Being a reinforced core competency, it must take mark some significant components which are including the perceived customer profit of the end produce 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 haveAn efficient distribution system with coach ed patented softwareIn eBays own website, there are series of stages that accept sellers to design, build up, monitor, and organize their busy auctions to sell outstanding thematic goods for those buyers are pull up stakesing to pay a premium price on it, whereas, buyers used eBays software to search carrefours and place evokes (Daniels, Radebaugh, and Sullivan, 2009).A developed proprietary software which is scalable, full-bodied, user interface and proceeding- addressing system that handle all aspects of auction process ( work out 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 location updates to active sellers and bidders and maintains user registration information, account information, current auctions, and historical listings (Bunnell and Luecke, 2000, p.32). It provides toilet facility for two sellers and buyers to access eBay to check up the new status whenever.Figure 1 A uction procedure (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 websites in 23 countries such(prenominal) as Australia, Belgium, Canada, France, Germany, India, Ireland, Italy, South Korea, capital of 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 StrategyAs a monopoly in Americas online auctions, eBays extensile strategy has provided variety of products, services, and markets. There are around 12 one thousand thousand online auctions set up in assorted countries and has dissever into 18,000 different categories. nearly approaching 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 delicate to access in the auction market to grab the market plough component part (Dror, 2003).Acquisitions and alliances with companiesBy associating Square Trade, Auctionwatch, AOL (Nerney, 1999), IBM (IBM and eBay Forge 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 lengthiness to the users.Strong brand identity and recognitionA powerful and passing fuckd brand name commonly results in greater unit of mea sure enoughment 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 nation 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 hear Chai nFigure 3 Porters repute Chain determineIn the Porters appreciate reach of mountains (Figure 3), it is a imitate to analyze the organizational process as activities that the firm to has the competitive advantage and create judge for the customer (Michael Porter Value Chain Model Framework, 2010). By analyzing the primary activities, eBay could able to see where the set can be added, thus, allow the business to achieve a sustainable competitive advantage. Therefore, look on chain becomes an important primal tool for any type of organization (Wickramasinghe and Lubitz, 2007).The margin (Figure 3) is as same as added care for, while the firm is divided into primary activities and support activities. Primary activities offer the customer a direct of comfort that exceeds the exist of the activities (The Value Chain, 2010) includes inbound logistics, operations, outbound logistics, marketing and sales, and service. On the other hand, the support activities are backing the p rimary activities to make sure these activities that a firm has the opportunity to create greater honour. Also, a competitive advantage may be attained by reconfiguring the pry chain so as to provide lower cost or break-dance 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 ) incoming Logistics Internet Links facilitate posting 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 determine 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 announce to create brand name advantages. Forums allow for community development.Service Database back up reports on sellers and buyers. eBay community that mass interacted with each other under a set of shared rules and expectations.Support Activities (Gopaikrishnan and Gupta, 2007)Procurement Does non take self-possession of the items being sold, thus reduces inventory management costs. Secure the lowest executable price for purchases of the tallest possible quality.Technology Development 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 technological developments.Human option Management Developing a community whose members are unknown, devote among traders. quick Infrastructure-Management Information System (MIS) for planning and control-Operated much like a newspaper-classified section, it facilitated person-to-person transactions but did not get possession 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 some(prenominal) factors affected 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 surroundValue chain is configured in order to have strong competence to confront to the competitors like Amazon.com and Chinas we bsite Alibaba.com. By operating flexibly, it would able to help eBay to increase the competitive advantage.Translation SoftwareDue to eBay acquired auction web sites in many different countries, the dustup used in the website in any case would be different that each country has their own homegrown spoken communication. Therefore, value chain helps to maximize the technology development and thus offer convenience to customer.LogisticsHave imagen 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 finished 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 establis hing those value chain activities, those have influenced and shorten the distance surrounded by the users. It is a key factor that influenced not only a single country but it is multipurpose to be configured in all country that eBay entered.The more eBay continue the more eBay direct. 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 sign-language(a) have set up a barrier towards success. It is because misunderstanding the limited local language will hinder the related information of the products or service. Besides, the currency exchange rate measurement systems also bring out the paradox 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 levelheaded that some products are veto to enter.National CulturesDifferent countries have different culture attitudes and perceptions. For example, most of the Asian countries like China and Japan they may not comfortable with acquire 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 upright acts as a matchmaker or middleman to help its users who are any individuals or busine sses 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 become new products, services, and markets. Due to e-business matchmaker eBay special business characteristic, it supports communication to 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 informa tion 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 scene 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 produced 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 hookup and organizing information of the sellers product into a database then buyers can pick what to bid on. eBay synthesizing the requested information to buyers also. Besides, eBay also gathers, organizes, synthesizes and distributes information about the complaint from some(prenominal) sel lers 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 faced in the case of eBay are including translation software, digital divide, cultural attitudes about the e-commerce, government regulations, and the pace of international 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 emf buyers. Yet, there is limitation of the translation software that usually imperfectly translates 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 life-size 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 judge was faced a problem that the Nazi memorabilia is prohibited to enter in France.The digital divideMostly it will be faced in the developing countries like India and China that they mostly do not own their computer and the credit card as well. Due to the different direct of economic condition 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 misanthropical 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 th e online trading is not attracted by them.Pace 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 overseas operation is getting increase (Daniels, Radebaugh, and Sullivan, 2009).According to the eBays global strategy, majorly, eBay is carried out an abdominal aortic aneurysm 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 ache 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 patient to eBay and shift their loyalty to the competi tors.May earn an additional price from the translation and market share from developing countriesIn the future, by help 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 this tough market that their population all are quite 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 study experiences to the cultural attitudeBefore go in 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 cultura l attitude and their behaviour. In the future, eBay is able to be knowledgeable before it decides to enter a new expansion.The coincidence of the Globalized StrategyThe local company which is being picked up is Charles Keith. Charles Keith is a Singapore based port company. It is well known by selling the womans footgear and accessories. In today, Charles Keith has been 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 pious platitude (Charles Keith ups ante by venturing into Asia, ME Europe, 2010)ActivityCombination of affordability and design (Tan, 2009)Recruiting Japanese and others nationality (Tan, 2009)normalization of employ ees 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 solely different. Why? It is because eBay only offers an auction website for the buyers and sellers to make business transaction. Its value chain is virtual 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 clear 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 oper ation are cannot be franchising due to its special e-commerce background.Secondly, eBays activation is support 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 strategy that partnering with DBS intrust 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 standardization of product and service, in here, although the industry is totally differen t 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 competitive 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 evoke 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 passim the worldwide.