The Role of Strategic Decisions in Ebay Growth

eBay strive in the global marketplace

-How does the Characteristics of digital media have supported eBay’s growth?

-How strategic decisions have supported eBay growth?

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Answer:

It is very important we know the meaning of some terms we are discussing in relation to this context such as;

• eBay
• Global
• Marketplace,
• Digital media
• Growth
• Strategic Decisions.

eBay: In a simple term is an online platform (auction and shopping websites) where individuals, manufacturers (producers) and businesses meet to buy and sell their goods and services, exchanges informations with the aid of Internet and digital media reaching worldwide.

The Platform brings millions of people online every day, on a local, National and International basis using different websites that focus on e-commerce, how payment can be made easily and communicate with one another.

Marketplace: Any place or medium where buyers and sellers meet to exchange goods and services is a marketplace.

In this Context Marketplace is online using the Internet.

Digital Media: According to Advance dictionary “Digital Media are any media that are encoded in a machine-readable format”.

Digital Media can be created, viewed, distributed, modified and preserved on a digital electronics device such as computers, flash drives, external hard disk drives, Mobile smart Phones, online and on cloud.

Growth: In this context simply refers to as increase, yielding or profitability.

Strategic Decision: These are decisions taken by organization or business managements which every employee of the organization must abide to achieve the organization objective, mission and vision.

Brief history of eBay

eBay was founded by Pierre Omideeyar in September 1995 at San Jose. His objectives and goals was to create a marketplace for the sale of goods and services for individuals, organisations and businesses.

Pierre and his cofounder Jeff Skoll engaged Meg Whitman to sustain the success of their site and ideas in 1998, because of her wealth of business branding and arketing. Meg had studied at the Harvard Business School and had learned the importance of branding at companies such as Hasbro.

Meg created an experienced management team with an average of 20 years of business experience by involving people like Pepsico and Disney and built a strong vision for the company. eBay is a company that's in the business of connecting people, not selling things for them.

They moved into different options of upscale marketing where the average sale price (ASP) is higher and shed only the image of auctioning collectibles. eBay transaction fee was determined by a key metric average sale price, so increasing the ASP became an important factor, thereby forging partnership with companies with brand name such as General Motors, Disney and Sun, eBay has managed to do exactly what he intend to achieve his goals. Sun has sold over $10millions worth of equipment in the eBay platform and it lists between 20-150items daily.

eBay has become an online auction and shopping website where people and businesses buy and sell goods and services worldwide. Millions of people are connected daily on a local, National and International using different websites that focus on commerce, payment and communications.

eBay originate from home business founded by omideeyar living room, now the company has become the world leading auction market and one of the major dot.com companies that has actual made huge success.

In eBay transactions prices are determined by buyers unlike the traditional model that we are used to where prices of goods and services are determined by vendors or sellers. The vision of eBay was to eliminate the inefficiencies in traditional mode of transactions by providing a convenient place where buyers and sellers meet to exchange goods, services and information at a minimum cost. Thereby making bargaining and collecting interesting.

Digital Media (online trading) or e-commerce helps sellers to market or sell their goods and services through online easily and reach the globe within the shortest possible time.

It’s help buyers to search online with the aid of internet search engine within the shortest possible time to locate or get products and services required, also gives them the opportunity to compare prices, quality and know the method of delivery and payments when satisfied, if not satisfy he keeps on searching till he gets what he wants, this draw more traffic to eBay thereby increasing their profit, as each transaction is closed eBay debt the seller credit card directly immediately.

Millions of people (buyers and sellers) businesses and Manufacturers are brought together on a daily basis in a Local, National and International using different websites that focuses on marketing thereby increasing the profit margin of eBay daily.

Digital media eliminates many inefficiencies of conventional (traditional) person to person trading, thereby provided a place where eBay users can conveniently meet, exchange information about their goods and services, negotiate prices and transact business at a minimum cost.

eBay users can browse through listed items via digital media or internet easily.

The sellers or suppliers can list items that he wants to sell, while the buyer bargain on the items of their interest.

The combination of digital Media and eBay strategy business concept makes it possible for millions of people to handle transaction that worth over 10Millions Dollars on a daily basis and round the globe.

The Role of Digital Media and internet to eBay growth.

eBay has strived tremendously using digital media particularly the internet or the World Wide Web for its online auction. eBay innovate arrays of channel to actualize his vision using internet, one of the ideas is the online auction mode to expand e-commerce, giving millions of people a low cost opportunity to engage in a new form of economic activities. With the use of World Wide Web eBay has been able to build an online person to person trading environment in the Internet (2000).

eBay subscribers or users can browse through listed items displayed on the web using automated ways (internet), the sellers are allowed to list items they want to sell while the buyer bid on items of their choice, transactions is made easy within minutes between buyers and sellers using eBay web interface and the internet, thereby making Digital Media and the Internet eBay to grow continuously.

The use of digital media (computing powers) makes internet auction effective. The combination of digital media and eBay strategic business concept effectively enhance hundreds of people to handle transactions that worth millions of dollars and pounds everyday round the year. eBay developed a software capable of handling and supporting a robust, scalable user interface and transaction processing system. The system can manage all aspect of the auction process. Its alert by sending email when a user requested for services, placed an order or bid and when they are outbid, and communicate the outcome of transaction to participates.

The same system also send daily updates to active users and maintains users registration information, account details and previous dealings. All information about the users and transaction are archived to a data warehouse, making sure all information are well maintain and kept saved. eBay keeps track records of all transaction made, when a transaction is successfully completed the system automatically calculate the fees and bills the sellers billing account or credit card account.

eBay provide other information infrastructures that support users, guide and disseminates information about the company. All this are achieved by using company owed equipment and other equipment provided by external service providers such as Sun database, Microsoft’s Windows NT and others.

eBay is designed in such a way that it supports almost freestanding commerce, users can sell their product and services freely as decided while buyers or bidders controls the price of auction thereby encouraging continuous growth.

eBay users are constantly educated on how use the website and website is updated and maintain weekly to keep the system up to date and avoid crashed.

The major objective of the eBay is to increase the numbers its users and net revenue generated from the eBay marketplace and to build the largest person to person online auction company, this is achieved using a strategy which focuses on:

1. ACQUISITION: This strategy focuses on increasing the number of newly registered users on the eBay marketplace.
2. ACTIVATION: This focuses on increasing the numbers of already existing users that become active bidders, buyers and sellers in the eBay marketplace.
3. ACTIVITIES: Increases the number and value of transactions that are conducted by each existing active user on the eBay marketplace.

eBay consider the 5Ps of Marketing strategy for the growth of the Company

Price, product, Place, promotion and People

Price: eBay auction price is been determine by bidders or buyers thereby building confidence on the bidders.

Product: The product of eBay on this regards is trustworthy services to sellers and buyers.

Place: There simply refer to the online marketplace which is digital media.

Promotion: eBay allowed users to control the direction of the site but created a legal system that promote self-governance.

People: eBays is designed in such a way that it can be accessible by all,

Demography, webography and psychograph.

Another Major strategy employed by eBay to expand the company are:

1. Expanding the user base,
2. Broadening the trading platform by increasing product categories and promoting new ones
3. Strengthening the eBay brand
4. Encourages community likeness for eBay.
5. Ensuring site features and functionality are working optimally.

The arrival of Meg Whitman to eBay in 1998 created a very big positive impact in the company because of her wealth of experience in product branding and marketing knowledge.

In August 1998 eBay entered into three years deal with American online (AOL), under the terms that AOL will feature them as preferred of person-to-person trading services in its interest area, also eBay link would appear on AOL home page as advert, a portal viewed by over 65 millions subscribers, this three years deal was priced at $12 million in 2000.

Conclusion

It can definitely be said that eBay has literally changed the face of domestic and international marketing. Today, eBay is a multibillion-dollar company that has operations in more than 40 countries around the world. As of 2010, eBay in the United States alone has accumulated over $9 billion and is worth more than $22 billion globally. While eBay and its functions have continually improved, and developed over the years, it still offers one of its original functions: connecting people with other people.

By 2008, eBay enjoyed several hundred million registered sellers and buyers and had employed more than 15,000 people. The company has branched off to create other specialty sites, purchased other major Internet companies, and has spawned additional user-friendly opportunities for international trade and commerce. One of those is the financially based PayPal, skype, which enables users from around the world to receive and send instant payments without requiring them to deal with traditional bank obstacles, fees, or international wire transfers. It speeds up the ease and frequency of international transactions.