E-Commerce Infrastructure - EBay Strategy Focus - Essay Example

E-Commerce Infrastructure - EBay Strategy Focus Introduction In today’s world, e-business has several applications in almost all the organizations. The word e-business has been derived from words such as, e-commerce or e-mail. It means carrying out the business processes by means of internet. It does not only involve purchasing or selling of products or services, but also includes serving customers at anytime and collaborating with all the business partners in an effective manner (Hashtags, 2013). The e-business application would help in increasing the operational efficiency and profit by means of internet. A large number of organizations have benefitted from the e-business application. In the present global environment, e-business has gained strong popularity. As internal and external electronic communication within the business processes have become almost unavoidable, the efficiency of the e-business applications is increasing with time. Hence, e-business is defined as the business transaction which takes place with the use of communication and information technologies. It mainly includes three primary functions which are: a) it includes commercial activities like, purchase or sale of products or services electronically; b) various business activities like, customer relationship marketing, enterprise resource planning and new product innovation; c) social activities like, cultural enforcement and social interaction. The e-business application has been classified into various categories i.e. Business to Consumer (B2C); Business to Business (B2B); Government to Citizen (G2C) and finally, Business to Government (B2G). The main components of this application include: 1) An infrastructure consisting of proper communication network via electronic medium. Among such medium, the most popular one is the internet. 2) The software applications manage the business transactions in e-business. Examples of such transactions include presentation of detailed information, storage or retrieval of data in the databases and exchange of information in an appropriate manner. The web applications include electronic marketplace or any company website and provide a global recognition to the businesses. Thus, it is important that the software applications are well-integrated within the web applications so that the task gets completed in much easier manner. 3) The e-business application have been classified into three main categories based on the purposes that they serve: a) Informative: The main purpose of this informative e-business application is to provide professional, technical and other business information. The informative transactions mainly include business communication transactions, corporate website information and e-promotions by means of e-mails and e-newsletters. Current developments in web technologies like, Extensible Mark-up Language, aims at developing a unified framework for the unstructured informative transactions. b) Transaction: The main purpose of transactions in e-business is to facilitate the present or future transactions for all the customers and business partners. Here the electronic transactions must be codified earlier. Inspite of using post-offices for exchanging mail receipts, invoices or other types of business documentations, the organizations can make use of EDI messages. c) Growth: One of the main motives of organizations is to reduce the overall transactions cost. e-business serves this purpose in the best manner, thereby facilitating opening up of new markets, increasing the efficiency involved in new product development and finally, carrying out innovative business procedures. Importance and Features of a Website The website of the company helps in achieving competitive advantage. The development of technology has influenced organizations all over the world towards implementation of new systems in order to enhance their productivity. The emergence of the internet has helped to take the technology to another level with passage of time. According to various industry experts and scholars, the emergence of internet has helped in changing the entire pattern of the business transactions. It has played a significant role in the improvement of business communication and efficient flow of information at all levels of hierarchy within the business organizations (Jagoda, 2010). Any organization which considers e-business implementation for carrying out their business transaction must comprehend one website which acts as an effective platform for carrying out the business deals. A website is defined as the collection of various web pages under one particular domain name. An organization with an own website increases its scope of recognition in the market. It increases the visibility of the organization within the market. Some of the significant features of owning a website are given below: 1. Helps in providing accurate information- The most essential role played by the website of an organization is that it gives information to all the users related to the subject of concern. It does not provide information only about the product or service offerings of an organization, but also presents information about the background of the organization along with its relevant contact information, financial information and all other required information. 2. Helps in collecting feedback from the customers- Another significant characteristic of an official website is that it helps in gathering feedback from customers related to the product or service offerings. At the same time, the company can also take suggestions from their customers related to the development of further opportunities. 3. Provides accessibility 24*7- The website provides round the clock accessibility to all customers throughout the week all over the world (Korper and Ellis, 2000). For accessing the website, users simply require an internet device and an internet connection. It increases the scope of business opportunities for the sellers. 4. Provides quality customer services- The website acts as a platform by means of which an organization can provide appropriate customer services to all its customers. The customer complaint form is available on the website itself where customers can write their grievances or clarify their queries related to their product or service offerings. This makes it easily accessible to all the customers. Apart from offering direct customer services, an organizational website plays a proactive role in increasing loyalty amongst the customers. 5. Plays the role of an online store- The website plays the role of an online store where it allows the organization to carry out all the business transactions. It can be utilized as an online selling platform by allowing the users to make payments. However, for converting a website into an attractive online store, it must possess high quality navigational features, an easily accessible shopping cart, customized features as well as smart use of videos and images for making it highly attractive to all the users. Moreover, a website aims for visibility through a search engine by means of which the users can search for the desired products and services. 6. Eye catching design and attractive navigation- The website is characterised with navigational features that enable steering from one particular page to another. Moreover, it has an eye-catching design that helps to increase the visibility of the organization. Thus, all the aforementioned points imply that the website owns multiple features which, if explored in an appropriate manner, can provide excellent results and benefits for the organization. A well-organized website not only helps in providing online sales, but also promotes sales in the physical stores. The study has selected eBay for carrying out further analysis. This organization has been selected as it is one of the most remarkable examples of e-business applications based system. eBay Inc. is one of the American multinational corporations providing services to the customers. The organization is headquartered in San Jose, California and was established in the year 1995, after which it had become a success story in ‘dot-com bubble’. It provides services in more than thirty countries. The organization basically manages an online shopping website through which customers and businesses purchase and sell different types of goods and services all around the world (eBay, 2013a). The company helps with two vital purposes. The first one is exposure of different items to more than millions of individuals over the web and the second purpose served by eBay is that it provides the organizations and their websites with tremendous exposure, but at reduced cost. Analysis Business Model of eBay eBay uses the concept of e-business modelling. This model has a similar goal like other enterprises modelling. Business modelling helps the organizations in creating their business visions, strategies, align their business operations in accordance to fulfil the business objectives, share knowledge associated with the business and the vision and finally, ensure the approval of these business decisions from the stakeholders. Business modelling gives a setup to the business and the network partners for developing, marketing and providing value to customers in order to earn a highly sustainable and profitable revenue stream. The business model of eBay includes online trading community, thereby facilitating business transactions from one individual to another by means of World Wide Web (Chaffey, 2013). Here, the sellers and buyers are brought together in such a manner that the sellers are allowed to list their selling items and the buyers are allowed to bid on the items of their interest. eBay provides access to streamlined as well as globalized trading in forms such as, collectible shows, garage sales, flea markets and others by means of their web interface. This helps the buyers to easily search for the items of their interest and the sellers to list the items of sale within few minutes of their registration. In case of buyers, the browsing and bidding on auctions does not charge them any amount, but the sellers are mainly charged two types of fees. The item that is listed on the organization’s website has an insertion fee that ranges from 50 cents to $3 based on the starting price of the listed item. An additional fee is charged for promoting items via the company’s website. The seller is charged with a final fee (also known as final sale price). It is generally 7.9 percent of the actual sale price of the product or service. The company notifies the buyers as well as sellers after the auction. If the bidding price exceeds the minimum price of the seller, then both of them get to wrap up the transaction independently. The binding contract related to auction takes place between the seller and the winning bidder. In the entire auction procedure, eBay neither possess the seller’s item which is on auction nor the buyer’s payment. In this process, trust is the key to success. In the entire buying/selling model, buyers and sellers exchange the auctioned item for a payment which is made at that very place and time. In order to decrease the uncertainty of dealing with online customers, the company has introduced Feedback Forums which helps in collecting the feedback of the users. After completion of a transaction process, the users are asked to submit their criticism or compliments to these Feedback Forums. In such a case, both the sellers and buyers get chances to comment on each other. By viewing the history of trade of trading partners and also, the comments made, users would be able to get an idea about the authenticity of business conduct of these trading partners. Thus, there is no way of incorrect utilisation of the trust or reliability of the users, as they might wait for the improvement in the reputation of the trading partners. This also ensures zero chances for the seller to run away with the buyer’s money. Business Organization of eBay The business organization mainly defines the purpose of an organization followed by its functioning. In this context, eBay uses e-business applications to manage the online shopping website so that both the sellers and customers would be able to sell and purchase variety of goods and services across the globe. eBay mainly serves two purposes. The first one is exposure of different items to more than millions of individuals over the web. It is the first place where people search for different items. Another purpose served by the organization is that it offers companies and their respective websites with high exposure at comparatively lower costs. Streamlining the business operations of a particular organization is a positive move from the long-term perspective. In this context, eBay and the real time e-business align their business operations for seeking good returns in future (eBay, 2013b). The company has been successful in offering value, trust and selection to the buyers and reliability, efficiency and velocity to the sellers. Business Architecture of eBay The business architecture is a part of enterprise architecture that is associated with the corporate business and diagrams or documents describing the architectural structure of business (Lampela, 2009; Law and Ngai, 2008). It is a bridge in between the business model and enterprise strategy and also, between business model and business functionality (Fischer, 2006). The organizational business architecture is characterised with unique features for achieving competitive advantage in the market. There is horizontal scaling at each and every tier. The organization follows functional decomposition. The company prefers asynchronous integration as it would enable minimization of the availability coupling and improvement of the scaling options. The business architecture is based on virtualization of the components for decreasing physical dependencies and improving deployment flexibility. There are systems which detect failures and give notifications based on its findings in order to put a restraint on such occurring. The business architecture of the company helps in delivering quality functionality with accelerating rates. Business Technology of eBay With the advancement of technology, all the global organizations have opted for cost effective ways of conducting their business processes. The latest technology advancement has been enhanced by the development of e-business. Liyanage and Kumar (2003) have argued that it is the way by which a business is conducted. The effect of e-business on businesses has been realised regardless of the type or nature of the business. One of the main reasons behind the increasing popularity of this concept is the advantages associated with it. A large number of organizations are extending or switching their business line by offering a platform for online transactions. Therefore, not only businesses, but even the customers enjoy the benefits from this sort of online transactions. It is due to this reason that eBay forms a medium of providing online information to all the customers, as and when required, in order to help different companies by stimulating their sales. The users grab this opportunity as they enjoy the facilities of shopping online. As already stated above, this technology helps in reducing the time, effort and cost, apart from providing customers with large number of options. eBay acts as an online media for selling and purchasing goods by the sellers and buyers. It acts as an effective promotional tool and employs technology to allow both the buyers and sellers to purchase and sell their products and services via digital platforms (Bhasker, 2006). The purchasing and selling procedure is conducted over the online digital platforms, primarily the internet. Apart from online purchase and sale of products or services, the technology has huge significance in the other business domains as well. It facilitates internet marketing (Botha, 2004). As already discussed above, the development in technology has upheld e-business as an essential business tool for all small and big global enterprises. Apart from a promotional tool, eBay uses it for acting as an intermediary between the buyers and sellers. It is used for engaging the customers and connecting them in a network (Gao, 2013). As the cheapest mode of business transaction, eBay enables all the sellers and buyers to assist them in carrying out their business transactions (Goel, 2007). Given that the technology provides access to users round the clock, eBay has used the same to carry out business transactions in smooth manner at any given time. Since the entire process involves less time and labour cost, it enhances most of the organizations and their websites with reduced cost of operations (Alsmadi, Alhami and Alsmadi, 2009). Conclusions and Recommendations eBay has become a success story in the ‘dot-com bubble’ soon after its establishment in the year 1995. It provides services in more than thirty countries. The organization has achieved huge success by running an online shopping website through which the customers and the businesses purchase and sell different types of goods and services all around the world. The implementation of e-business applications has helped the organization in serving two main purposes. It provides exposure of a large number of items to millions of individuals over the web as it is the place where people begin their search for the same. Moreover, eBay provides the organizations and their websites with tremendous exposure at reduced cost. The cost effectiveness involved in the business transactions via eBay has increased the numbers of buyers and sellers with its e-business applications. As already stated above, this technology helps in reducing the time, effort and the cost as well as providing the customers with large number of options. It acts as the best platform for buying and selling products or services online. It is also an effective promotional tool which has helped the organization in achieving competitive advantage. eBay uses the technology which allows both buyers and sellers to purchase and sell their products and services via digital platforms. The purchasing and selling procedure is conducted by means of the online digital platforms, mainly the internet. Apart from online purchasing and selling of the products or services, e-business has high importance in various other business domains. The development in technology has resulted in e-business becoming an essential business tool, which is employed by almost all enterprises across the globe. Then again, eBay does not use the technology only as a promotional tool. It also uses it for bridging the gap between the buyers and sellers, along with engaging the customers in a dynamic and interactive network. eBay uses the concept of e-business modelling. However, the present e-business application needs to be further differentiated in order to enable eBay to achieve success worldwide. The following steps would help the organization in strengthening its position in the market: 1. It is very important to ensure that the present maturity of the e-business organization remains aligned with its predetermined strategic objectives and online strategies and also, satisfies all the performance criteria. The organization must set a benchmark against the external parties. eBay should be careful while choosing such external parties which might include various customer groups or sectors. 2. The organization must establish sponsorship or involvement at the operational and senior level by displaying the actual value of e-business. This would help in improving the efficacy related to the application at every level of hierarchy. 3. eBay must clarify its governance, responsibilities and roles related to the e-business applications. It must review the system involved in customer-oriented procedures. It should also create and leverage a positive culture for increasing the efficacy of e-business application. 4. The organization should focus on bridging the gaps in between all the business units, specially the marketing and IT unit for introducing a cross-departmental e-business navigation team. It should focus on establishing an integrated e-business roadmap that would improve the technology even further. The organization should pay attention towards improving the e-business procedure integration in a cross-departmental manner by aligning the business with the IT department. 5. The company should invest for improvement of the e-business performance as well as help in increasing the cost effectiveness of the implemented technology. Cross-channel measurement metrics must be included for considering the real value of the organization. eBay should continuously assess the e-business performance and take effective measures as and when required. 6. The company must make investments to establish in-house e-business roles, locations and competencies for achieving success in the market. These steps would help in aligning the vision and strategies with the business operations and ensure that the business objectives are achieved in an effective manner. Large businesses generally choose eBay in order to offer their items to millions of individuals regularly, sell the excess inventory items and attract customers towards their site. Thus, eBay should mark the big organizations as their target market while planning for improving the technology. Reference List Alsmadi, I., Alhami, I. and Alsmadi, H., 2009. The requirements for building an e-commerce infrastructure. International Journal of Recent Trends in Engineering, 2 (2), pp. 7-9. Bhasker, B., 2006. Electronic commerce: framework, technologies and applications. New York: McGraw-Hill Education. Botha, J. A. R., 2004. E-Commerce. Cape Town: Juta and Company Ltd. Chaffey, D., 2013. A case study focusing on eBay strategy. [online] Available at: [Accessed 17 December 2013]. eBay, 2013a. eBay Today. [online] Available at: < http://www.ebay.com/> [Accessed 17 December 2013]. eBay, 2013b. eBay Inc. [online] Available at: [Accessed 17 December 2013]. Fischer, M. M., 2006. Innovation, networks, and knowledge spillovers. Berlin: Springer. Gao, J., 2013. Introduction to e- commerce. [online] Available at: [Accessed 17 December 2013]. Goel, R., 2007. E-Commerce. New Delhi: New Age International. Hashtags, 2013. Why companies are spending more on social media advertising. [online] Available at: [Accessed 17 December 2013]. Jagoda, K., 2010. The use of electronic commerce by SMEs. Entrepreneurial Practise Review, 1(3), pp. 36-47. Korper, S. and Ellis, J., 2000. The e-commerce book: Building the e-empire. California: Morgan Kaufmann. Lampela, H., 2009. Inter-organizational learning within and by innovation networks. Lappeenranta: Lappeenranta University of Technology. Law, C. H. and Ngai, E. T., 2008. An empirical study of the effects of knowledge sharing and learning behaviors on firm performance. Expert Systems with Applications, 34(4), pp. 2342-9. Liyanage, J. P. and Kumar U., 2003. 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