eBay has experienced strong financial performance since 1995 and was a prominent player in the global online auction industry. eBay’s global market got merchandise revenues from items for sale by bidding or fixed-price transactions; the finance division reported receiving processing fees from its PayPal service, and the communication department generated communication fees mostly from consumer use of Skype. Let’s know about eBay’s Competitive Advantages.
eBay’s strategic skills steer and analyze its plan and objectives throughout time, allowing it to gain a competitive advantage by leveraging alliance resources and competencies to meet client needs regardless of economic conditions. Strategic capabilities will provide management with instructions and guidance on how to grow and sustain businesses to gain a competitive advantage.
Given below are the elements that enable eBay to outperform competitors and bring value to the company.
Same-Day Delivery Using NEO4J
The eBay Now platform makes use of delivery routing tools like Neo4j to enable speedier and more reliable transactions. This platform allows shops, freight transporters, and customers to coordinate deliveries. The platform coordinates logistics for customer-selected pickups and deliveries, which occur within one to two hours after placing an order. The platform has attracted a large number of customers, allowing the company to expand rapidly, particularly in the UK market.
Neo4j was chosen because of its versatility, speed, and convenience. The website’s schema flexibility also enabled easy extension, which considerably ramped up implementation. Neo4j also enabled eBay to add previously unattainable features. Using a Ruby library for Neo4j that supports Cypher, the team could leverage existing code. Cypher made it possible to express questions in a highly compact and intuitive way.
The Porter’s Model (eBay’s Generic Competitive Strategy)
Cost leadership is eBay’s generic strategy. The corporation achieves and sustains a competitive edge through minimizing costs, and strong profitability. For example, it entails technology that reduces fixed costs and variable costs in global e-commerce enterprises. Affordable pricing tactics entice customers and sellers/merchants to the internet retail and auction-trading marketplace. Being a cost leader also leads to financial advantages over competitors, which is a powerful factor. As a result, the company’s general strategy includes cost-cutting management techniques, aggressive growth tactics, and associated strategic goals that capitalize on minimal operating expenses.
eBay’s Intensive Growth Strategies
- Market Expansion (Primary Strategy).
The corporation maintains commercial growth through this intense strategy by growing most individuals who engage through its worldwide e-commerce network. The firm, for example, develops in terms of increased profits and scope of operation by growing the number of customers who buy things on the e-commerce platform. The company’s scope of operations is growing because of this expansion. As a result, the company increases its eBay auction services and related activities, bolstering the strengths highlighted in eBay Inc.’s SWOT Analysis.
- Development of market (Secondary strategy)
In this aggressive strategy, development is achieved by setting new projects in new areas or market categories. Setting up a separate website for tightly focused classified items, such as sports equipment, strengthens eBay’s presence in this market area. As a result, one of the strategic goals of the growth strategy is to establish new trade websites to launch new online retail or auction activities in identified market segments.
- Development of product
It is a crucial component of the company’s worldwide expansion strategy. The company creates and brings the latest items to buyers and retailers, who are the target customers of the e-commerce network, as part of this aggressive expansion strategy. New income streams comprising added items are created to accomplish growth. Changes to eBay’s business structure may be required because of new goods.
For example, using mobile phones for trade is a trend that necessitates the establishment of innovative mobile products and services regularly. As a result, increasing the company’s rate of technology innovation is a strategic goal regarding product development. To guarantee eBay’s competitive advantages, innovative products must meet the cost reduction condition of the cost leadership generic strategy.
- Diversification (Creating Value in Global Markets: An International Strategy)
The company must expand into new sectors or industries to accomplish growth in this aggressive strategy. From 2002 through 2015, complete ownership of PayPal allowed eBay to diversify its business to include operations in the digital financial market. Growing the internet commerce and auction business by purchasing complementary companies operating in other sectors, such as a smaller firm that manages display-advertising networks, is one of the strategic objectives linked with this aggressive expansion strategy.
eBay will require a properly defined and meticulously planned course of action or strategic skills to achieve significant profitability in its business. eBay CEO and President Meg Whitman, along with eBay managers, must be more involved in the planning of how and where to sustain economic growth and more strategic alliances in advertising eBay, like what they have founded with yahoo, Google, Skype, and others. This strategic agreement will significantly increase and sustain eBay’s competitive advantage through advertising, as well as increase profit for eBay by attracting more consumers.
Frequently asked questions
- What is an eBay Store?
Answer – eBay is a worldwide online marketplace where one may construct their shop and connect to millions of buyers across the globe.
2. Why Should You Open an eBay Store?
Answer – eBay offers comprehensive assistance in the form of tools to help users maintain their storefront. You pay a small fee, but the rewards are substantial. You should not need to put in a lot of effort to sell because millions of people use eBay to look for things and buy them.
- Can other search engines and shopping sites find my Store Inventory listings?
Answer – You can get a file from eBay that will allow you to publish the details of your store’s inventory listing to other shopping sites or search engines.