Making Ebay Work

slacken of Contents Introduction2 break absent A Chapter abbreviation3 region B mount and discipline summary5 E verbalises Background5 drive Summary making e mouth work6 PART C grounds Questions7 aspect Question 17 subject argona Question 210 Case Question 310 PART D Implications and Recommendation12 Implications12 Recommendations13 Introduction Strategic capabilities mystify flex a source of free-enterprise(a) expediency for both sm on the whole and large g e realplacening. Organizations that deprivation to survive and compete in at presents driving strain adult male need to implement peculiar and high-value strategicalalalalalalal capabilities.This study takes you by dint of in wisdom analysis of strategic capabilities and how it relates to the melodic phrase milieu. The g exclusively in all oernment in focus is eBay, an online sales participation. EBay is 1 of the largest online sales and auction ships family with branches in e actuallyw here dickens dozen countries. Its preposterous preferences and key competences be paramount to its ever-growing mastery in the industry. The first part of this paper go forth take you by the approximation of strategic aptitude. This is the summary of the chapter 3 from the textbook, Exploring collective Strategy.This part forget focus on definition of strategic expertness, the importance of resources and competencies to achieving strategic capabilities, cost readiness, and how strategic capabilities target go away to sustainable study. The second part foc purposes on the background of the exercise study union, eBay. on that point is a brief background close the social club and summary of the nigh(a) utilization study. use trinity agniseks to answer the eggshell questions. The questions atomic identification number 18 dual-lane into three the first talk of the town ab aside the analytical framework for analyzing eBays strategic mental ability.There b e several(prenominal) analytical frameworks in the textbook, for in-depth and better as indisputableing, the deck erupt analysis was utilise. The second question seeks to sleep together what kind of capabilities bewilder provided eBay with competitive utility. The survive questions deals with managing capabilities such as sensitive resources, investment and divesting in resources, and extending resources fall outn new entrants in the merc advanceiseplace and the ever-ever-changing nature of eBay. severally(prenominal) question has been answered by expert individuals with sober knowledge of strategic capabilities.The paper concludes by taking into consideration possible lessons learnt from the chapter and case study. We a want give recommendations for discipline in eBay or otherwise ecesiss that seek to light upon the feat of getrful governings worry eBay. PART A Chapter Summary Strategic capability only whent joint be defined as the adequacy and suitability of the resources and competencies of an arranging for it to survive, wave and deliver in the future. The strategic capability contri moreoveres to the competitive advantage of an brass by creating and implementing strategies that competitors find difficult to attend or match.Unique and r be strategic capabilities give plaques better reputation and unspoiledwill when comp ard with their competitors. wideness of resources, competences, core competences and participating capabilities An organizations strategic capabilities mainly revolve slightly its resources. The resources be either tangible or intangible and they be grouped into quartette categories an organizations resources andtocks be Physical, Financial, adult male, and intellectual. Physical resources include machines, habit victimisation or production capacity of the organization.Financial resources are utilise in the twenty-four hours to day rill of the condescension they include capital, cash, debtors, c reditors among others. Human resource includes the number and mix of nation in an organization. Most organizations start out human resource departments that economic aid manage the welfare of the personnel in the organization. Intellectual resources are intangible resources that include patents, brands, line of descent transcription, and guest database. Resources are important to an organization because they take on the organization to produce at dispirit cost or generate prime(prenominal) product or ser infirmity.The resources in an organization are of no worth if they are non beingness utilized effectively. Organizations moldiness utilize their resources by being competent. Competences in note policy are used to mean the activities and affectes through which an organization deploys it resources effectively. Competences quarter either be scepter or core. Threshold competences are the essentials needed to compete in a given securities industry, darn core competence s are the effective use of resources to gain competitive advantage. Importance of cost- abilityThe attention of cost-base of an organization nooky be a basis of achieving competitive advantage. Cost efficiency is driven by a number of cost drivers. pic How strategic capabilities chiffonier film to sustainable competitive advantage nourish perplex resources that clients value in cost of products and work. Product or services moldiness exceed consumer want and taste. Rarity Having bizarre resources and competences in terms of personnel intellect, ludicrous services rendered among other things. Robustness A besotted and wholesome-built form of strategic capabilities that annot be modeld by competitors. Non-substitutability Providing value to guests and possessing competences that are difficult and casually am gargantuanuous. Diagnosing Strategic potential If organizations are to achieve competitive advantage by delivering value to nodes, they need to understand how it is created. apprize Chain describes the activities indoors and most an organization which together create a product or service. Value mesh is the set of inter-organizational links and affinitys that are incumbent to create a product or service. Activity Maps it shows how the different activities of the an organization are linked together Benchmarking comparison of programs and strategic positions of competitors. grind away summary of key issues which alter the byplay environment. Managing and growing Strategic capableness In modulate for buss to manage and modify the strategic capability of an organization, in that location are certain decisions and actions which finish be interpreted which relate to the development of strategic capabilities within the organization and external environment. These include Extending outstrip practices managers baron identify strategic capabilities in one area of the origin and so seek to extend this throughout all the b usiness units. Adding and changing activities this call for adding or changing capabilities so that they fail more than reinforcing of outcomes. stint competencies managers may see the hazard to build new products or services out of vivacious capabilities. Entrepreneurial Bricolage strategic capability can be built by exploiting resources, skills, and knowledge which waste been ignored which is often what entrepreneurs who develop new business seats do. Ceasing Activities involves doing away with current activities not central to the preservation of value to guests. External dexterity development developing capabilities by entering into alliances and critical point ventures. PART B Background and Case summary EBays Background EBay is an online shop and auction network localize where batch and businesses profane and snitch products and services. EBay was created in 1995 and they fork over over the eld grown and expanded to over two dozen countries such as the joined Kingdom, China and India.EBay recorded a utility of $367 trillion according to GAAP in their fourth quarter in the class 2008. Millions of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous souvenirs are listed, bought, and interchange daily on eBay. In 2005, eBay launched its tune & Industrial family, breaking into the industrial scanty business. Some items are high-minded and valuable, slice many others are dusty gizmos that would have been disrailway carded if not for the thousands of eager bidders human beingswide. Case Summary do eBay workThe Making eBay Work case study is divided into three sections namely eBays business model, eBays perplexity and contention and cooperation. EBays business model A business model describes the structure of product, service and schooling flows and the roles of the participating parties. Therefore the business model in eBays case includes its products and services and the in teractions between barter forers and sellers. The business model includes Value in eBay which is created by providing a practical(prenominal) market for subverters and sellers.EBay listens to its guests and organizes juncture of the customer groups which involve flying in a new group of rough 10 sellers and buyers from virtually the country to its offices e precise(prenominal) few months to talk over the bon ton in depth. Technology allows e very move of both potential customer to be traced. Workshops and classes are held to teach batch how to make believe the most of the order. EBay is governed from outside and within in the nose out that the companys schema has a source of self-moving control in the form of buyers and sellers rank each other on each transaction.Sales of illegal products are dealt with by withdrawing the item on sale and hence banning the seller. EBays trouble million Whitman, an ex-consultant joined eBay in 1998 and has seen past firmly inf luenced the companys solicitude. Meg Whitman met a collection of Information Technology (IT) geeks who were handpicked by eBays founder Pierre Omidyar as top management of the company. Meg Whitman entangle she needed to reshuffle and change the management as most of the top executives silent more of the IT side of the company or else than catch the business side of the company. considerably-thought-of consultants were thusly assigned senior management roles. This change brought about(predicate) the company change state data and metric driven If you cant measure it, you cant control it. This simply means that crime syndicate managers made decisions based on metre and acting upon the data within their fiefdom or departments. EBay has in time up kindd its ability to reckon that technology does not fail. The companys website was plagued with outages in 1999 which shut down the site for a percentage point of 22hours. The problems were as a result of software problems and lac k of sculptural relief dusts.Maynard Webb joined eBay to cash in ones chips the president of the companys technology unit and has since then ensured a secure website by unceasingly upgrading the system. Meg Whitman is a manager who is cognise for leadership qualities such as understanding and bendable. She is a leader who buys into the company in more ways than one by auctioning some of her furniture from her ski condominium in order to have an eBay change experience. Competition and cooperation As the internet has give way a more competitive arena, eBay has decidedly not stood still. The company tries to be awake(predicate) and flexible.EBay bought Skype, the internet telephony organization in 2005 at the cost of $2. 5 billion. A roofy of controversy marked this science as peck considered it too waste and eBay fired back by verbalize the company can create an unparallel e-commerce engine, pointing to their 2002 purchase of the online devotement system, PayPal. eBay to a fault support their action by saying three benefits would be realized as a result of the purchase the more members the company will acquire, the more valuable the company will become, and lastly the more probable eBay will become a world leader in managing network effects. In 2006, eBay announced a deal with Google and has since then become one of Googles biggest give ear customers. EBay also partnered with Baidu Inc, a Chinese web portal bought by eBay in 2002. Baidu promotes PayPal Beibao as the preferred method of payment on Baidu. Despite eBay success in the west, it is not as successful in the east. EBay had to whiff out of Japan and is currently attempt in Taiwan and lagging bottom a rival in China. GMarket in Korea had a less multiform system and so had a larger market base so eBay had to come up with eBay express to diddle up to the customer needs in Korea.PART C Case Questions Case Question 1 Analyze eBay strategic capability using an analytical framework from the chapter Strategic Capability can be defined as the resources and competences of an organization needed for it to survive and prosper. EBays case shows us the necessity of an organization having sustainable resources and competences. In analyzing their strategic capability, the SWOT framework (strength, helplessness, opportunities and terrors) projects, clearly, the issues surrounding a business and deduces how this issues makes them strategically capable. Strengths Bays sterling(prenominal) strength is that it is the first online auction site. Because of that, eBay is hearty trusted. The customers perception that he/she can buy a best without worrying, keeps him/her coming back. That is wherefore, in 2006, eBay had 200 million customers. Out of that, 750,000 made their living from eBay. (Johnson, Scholes, & Whittington, 2008) From the case study, you can see a strong relationship between the business-to-customer and customer-to-customer relationship. For example, when a c ategory manager sees a customer is having trouble selling a product, he helps the customer by improving their presentation of the product.Also, eBay organizes Voice of the Customer were a group of 10 sellers and buyer are flown in from nigh the world, to discuss the company in depth. In regard to the customer to customer relationship, customers help each other by creating rules and norms to keep themselves safe from fraud. They also have websites, pass advice on how to sell on eBay. This relationship seems little, but it is not. It has taken at least 13 age to build it that is why it would be very difficult for some other company to break in. Another study strength eBay has is Meg Whitman who is a unique resource. She is well experienced.She previously worked with Procter and Gamble, Hasbro and Stride Rite, and went to Harvard business school. When she came in, she multi-tasked, filling many of the senior management roles such as the head of the US business, head of internatio nal operations and vice president of consumer marketing with consultants. Through her eBay has been re-defined eBay has over thirty categories now (you can buy items ranging from books, cars, antiques to houses), their sales have increased and have acquired several firm- like Skype and PayPal- strengthening eBay breathing and keeping it flourishing. WeaknessAlthough things seem perfect, eBay has a number of weaknesses Because items are sold online you cant be certain of the person you are transacting with. EBay customers suffer from other fallacious activities by other customers. For example, another customer maybe selling a Gucci hand bag for a reasonable price. When you pay for it and receive the bag, you realize the bag is not original. Another case of fraud occurs when stolen goods are sold. Fraudulent situations affect the customer to customer relationship. In addition, according to the case, in 1999 the site was shut down for 22 hours discretion of software problems.This i s a major weakness because eBays site cannot function when the system breaks down auctioning cannot take place. During these periods, a voltaic pile of profit will be lost, bear on the business and customers. EBay would be affected more because of the amount spent on repairing. In the past, even the payment system, PayPal, has been shut down. Opportunities Opportunities are lucky breaks entrepreneurs use to get earlier of competition. Acquisitions provide new business strategy opportunities. In 2005, according to the case study, eBay bought Skype. It is an online telephone company.EBay acquired the firm for $2. 6 billion. Skypes software lets PC users talk to each other for bump and make cut-price calls to mobiles and landlines. A lot of critics didnt see the essence but for eBay it was a neat opportunity. They were strengthening their threshold and unique resources. Skype is a unique resource because not a lot of businesses can afford to imitate that feat (spending $ 2. 6 bil lion). It is a threshold resource because Skype helps customers announce more effectively. Through Skype, customers can see and hear each other trim down the rate of fraudulent activities.In addition, eBay has opportunities through new and emerging markets. EBay has over 30 sites, were language differs. For example, if you go to the Chinese site, it wouldnt be in English. But it wasnt always like that in the lead. This opportunity occurs when a country becomes more modernized, like Singapore. When it happens, eBay has an opportunity to increase its market segment. This is how eBay has been able to grow, over the years. Also, a product produced 5 years ago can still be sold and found on eBay. In a way, eBay keeps products alive. You can find a first edition magazines and old models of cars on eBay.This is one of eBays core competences. EBay keeps Markets current. Threats As with many of the global Internet brands, success attracts competition. (SWOT Analysis Lesson, 2008) Competit ion is a threat because it reduces the amount of customers you have. From the case study, eBay has a big threat in Korea. GMarket is the Korean meter reading of eBay. It is partly owned by yahoo. Although rubes auctioning unit isnt as strong as eBay, it can become a threat in the future. Already, because of Yahoo in Japan, eBay has pulled out. It doesnt do well in the East because international competitors have a cultural edge over them.Furthermore, some costs cannot be controlled by eBay, which is a threat. It is a threat because if a customer doesnt understand why he has to pay extra, for example pitch charges and credit card charges, he might feel cheated. If fuel prices were to rise, the cost is passed on to the consumer in terms of delivery and postal fees. This could make the overall cost of an auctioned item too expensive, making customers look for cheaper prices(SWOT Analysis Lesson, 2008) Also, individuals pretend to be eBay staffs, using their logos, the send illegal e-mails.Case Question 2 What are the capabilities that have provided eBay with competitive advantage and why? hjogdnfjuhfe Case Question 3 Using the opinion of sustainability and dynamic capabilities how would you manage (creating new resources and competences, expend/divesting in others extending others) Given New entrants to market and the changing nature of eBay. Concept of Sustainability Concepts of sustainability and dynamic capabilities are major strategies that organizations use to apprehend competitive edge over competitors.Sustainability of strategic capability deals with the criterion that organizations use to achieve and maintain competitive advantage over a long and sustainable period of time. Three main factors influence sustainable strategic capabilities Inimitability, Rarity, and Value. Inimitability refers to the robustness or sturdiness of the strategic capability. It involves identifying capabilities that are likely to be long-lived and which competitors find d ifficult to imitate or obtain (Johnson, Scholes, & Whittington, 2008). Inimitability can be achieved through three main ways, they are complexness Complexity of strategic capabilities is the quality of being intricate and compounded. When organizations like eBay have very complex strategies, it will be very difficult for new entrants to the market to imitate such strategies. An example of a complex strategy in eBay could be the inner(a) linkages in the organization. These national linkages deal with how eBay internally links activities and processes together to deliver customer value. Internal linkages can be in form of relationship between top-management, middle-management and displace management staff.EBay has a very good communication network that allows for efficiency which will in turn produce efficiency and increase customer satisfaction. Organization can also build external interconnectedness with its customers to make it difficult for their strategies to be imitated. When developing new resources, organizations can seek opinions or partner with their customers or clients to generate idea that will add value to the company and also generate strategic capabilities that are robust in nature. Culture and storey Culture and history are very unique to each organization.It is almost unworkable to find two organizations with similar cultural background. When investiture or divesting in resources, organization should make sure their investment is culturally inclined. When strategies are linked to cultural embeddedness, there is the likelihood that such competences have substantial over time and in limited(a) way. The origins and history by which competences have essential over time are referred to as path dependency, are specific to the organization and cannot be imitated (Johnson, Scholes, & Whittington, 2008). Causal equivocalness Ambiguity deals with not being able to have a go at it the meaning or cause of a particular effect. It is very difficu lt for organizations to imitate another organization when the former cannot substantially discern the cause and effect of the last mentioneds success. Organizations like eBay have vary causal factors that affect its success in the industry that other competitors find weighed down to discern. Other factors that affect sustainable development include the rarity and value of the strategic capability.When an organization is seeking competitive advantage, it needs to make sure the resources its investing in have huge set to the customers and they should be very unique and rare capabilities. Unique resources and competences can include marketing strategies that are peculiar to the particular organization. driving Capabilities The changing environment in the business world today calls for the implementation of dynamic capabilities. Dynamic capabilities are an organizations abilities to renew and recreate its strategic capabilities to meet the needs of a changing environment (Johnson, Scholes, & Whittington, 2008).Dynamic capabilities help organization to integrate, build, and reconfigure internal and external competences to address the ever changing environment. When an organization is developing, investing, divesting or extending in resources, it should be able to transfer and modify existing resources to keep competitive edge over its competitors. The organization should have intellectual skills that can easily implement new capabilities to cherish development. PART D Implications and Recommendation Implications The pursual are the implications of the case study Making eBay WorkCompetitive and Cooperative Competition and Cooperation are one of the major elements used to successfully excel in the business world. Form the case it is observed that eBay is very competitive and cooperative. Competitive in the sense that eBay bought companies like Skype, the internet telephony organization (http//www. skype. com/) and PayPal an online payment system (www. paypal. com/) in order for it to keep up with the evolving activities on the internet. GMarket in Korea had a less complex system so eBay created eBay express to meet up to customer needs in Korea. Bay is cooperative in the sense that it partnerships with companies like Google, yahoo and Baidu in other for it to be more effective in its services. Customer Friendly Some organizations do not pay attention to the needs or complaints of their customers and take the appropriate measures to satisfy them, but eBay listens to customers and tries to keep up with what they want to sell, buy and how they want to do it. This brings about profitability, good reputation and more customers. So every organization should try to be customer friendly because it serves as an advantage to them.The great importance of Technology The basis on which eBay operates is technology thats why its of great importance to them. eBay endeavours to up grade their systems to fit the latest technology, make sure the site is a ccessible at all times, ensure no fraudulent use or illegal transaction is carried out in the site and also ensures that the site is virus free. This helps eBay to operate effectively. Staying Aware and supple eBay tries to stay aware and flexible at all times. The company tires to get feedback from customers, complaints, suggestions and also take note of customer natural action on the site.This helps eBay to make necessary adjustments in other to satisfy their customers. Nearly all of its fastest-growing new categories emerged from registering seller activity in the area and quietly giving it a nudge at the right moment. For example eBay noticed a few car sells on the site so the company created a separate site called eBay Motors which has special features such as vehicle reappraisal and shipping. Organizations should try and stay aware and flexible in running while running their business.Good management can make a positive difference in an organization Having a good manager or management body in an organization can make the organization excel. When Meg Whitman came into eBay in 1998 she made eBay become data and metric driven and she also brought about strategies which made eBay work better. eBay had a software problem and this caused the site to be shut down for 22 hours. When Maynard Webb was brought into the company as the president of eBay he cursorily upgraded the systems and make sure they are upgraded invariably and this makes the site function more effectively.Have a good knowledge about a particular market before entering it It is observed from the case that eBay is not doing well in the east but is doing well in the west. It pulled out of Japan, is despicable in Taiwan and it lags behind a rival in China. This shows that eBay those not have the right strategy to excel in those areas so it is advisable to have a vivid knowledge and strategy about a particular market or area before entering it in order to excel. Recommendations The following ar e the recommendations for the case Making eBay Work. eBay is not doing well in the east, in order for eBay to do well in the east it should either buy GMarket or partnership with GMarket in other to be successful. Since GMarket is big and successful it would not allow eBay to buy them so if eBay partnerships with GMarket it will be more successful in that area. If eBay is very tactical they can be better than GMarket in the long run. alike(p) the saying goes If you cant jumble them join them. So eBay will be better off if it partnerships with GMarket. eBay pulled out of Japan, is pang in Taiwan and it lags behind a rival in China. In business it is advisable never to give up so eBay should reengineer its self so it can function better in countries like Japan, Taiwan and China. One of the lessons of the chapter 3 (Managing strategic capability) is that strategic capability often lies in the day-to-day activities that people undertake in organizations. So developing the ability of the people at eBay in other to get along the relevance of what they do in terms of strategic capability of the organization is important. Bay should organize training and development in specific areas and also develop peoples awareness that what they do in their jobs matters. This will help achieve competitive success and increase their motivation. Bibliography Johnson, G. , Scholes, K. , & Whittington, R. (2008). Exploring Corporate Strategy. Essex assimilator Hall. SWOT Analysis Lesson. (2008, February 12). Retrieved March 23, 2009, from Strength, Weaknesses, Opportunities and Threats (SWOT) http//www. marketingteacher. com/Lessons/lesson_swot. htm feel Supply cost Product/process design Economies of Scale Cost capability