The value chain and competitive forces model to eBay - Case Study Example

In this present case of eBay value is created through the interplay of its various activities such as primary and support activities that ultimately creates value to eBay. Its primary activities includes it inbound and outbound logistics, marketing and sales and its operation. Working together, the interplay of these activities enable eBay to operate as an online auction venue where sellers can virtually sell listed items with description and photographs in an auction where potential buyers could bid on item for sale on a fixed duration of time.

The trust among the online community of eBay to transact online also provides value to the organization as transactions can easily be facilitated without the hesitation of being cheated. The interaction of these various activities in eBay’s value chain enables eBay to make profit of 1% to 5% for every item sold online. EBay’s business model and business strategy revolves around the idea that anything can be virtually and bought and sold on a global basis through its online auction platform.

The business model has been successful because more and more people prefer to transact online due to the ease and convenience of consummating a transaction by a click of a mouse. In addition, online auction and shopping online proved to be cheaper due to the almost no overhead of the sellers which reflects on the price being sold. The range of items available on eBay is mind boggling that almost anything can be bought from there. EBay’s success however is a product of a deliberate strategic management.

The whole business concept and strategy was for eBay to build an online community through its platform where anyone can transact without the anxiety of being cheated. 3. What are the problems that eBay is currently facing? How is eBay trying to solve these problems?  The most common problems that eBay perpetually is facing is the common problem that besets any technology based companies. System breakdowns are more precocious in eBay because the system disruption disturbs activities which has economic value such purchases and payment that does not go through due to system breakdowns.

The incidence of system outages however are minimized as technology improves and with eBay working together with its partners such as PayPal on how to effectively deal system issues during payments. EBay is not also spared from the unscrupulous activities online. It also has its share of being attacked by hackers where its unsuspecting buyers receives bogus emails pretending to come from eBay only to get information from the unsuspecting buyers. There is no known direct action from eBay on how to address such issue as it assumes that its prospective buyers are sophisticated enough to determine which email comes from eBay and which are those who solicits information from the customers. 4. Are these good solutions?

Why or why not? Are there any other solutions that eBay should consider?  Working together with PayPal to effectively address system issues during payments is a solution of the payment part of the transaction. The integrity of its systems however has to be made redundant to make sure that the site is up even during outages and breakdowns to ensure that transactions will not in any way be disturbed. With regard to the unscrupulous activities online, eBay can warn its buyers of such unscrupulous acts online that they may become aware of it hence preventing them from being victimized.

The non-action on how to deal with