Essay, 2 pages (400 words)

E-commercetopics essay

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1. Contrast eBay’s original business model with its latest proposed business model. With eBay’s original business model, the company had nowhere to adjust for the changing technology in e-Commerce. Because consumers were buying more products from the fixed price type of stores, and the prospect of auction sites wore off, the original business model will cause the company to continuously lose money. With technology advancing, eBay would be unable to maintain a competitive advantage with its old business model unless it adapted a newer business model geared towards e-Commerce. Its new business model will revolutionize e-Commerce with strategic alliances that will enable the company to expand it e-Commerce strengths. PayPal and eBay’s plethora of mobile applications and mobile payment systems brings the company back into the market.

2. What are the problems that eBay is currently facing? How is eBay trying to solve these problems? The problem eBay is currently facing is trust issues. As eBay became an online middleman for buyers and sellers, these two parties would need to have a sort of trust in eBay so their money won’t be lost. EBay seems to have stifled these trust issues with a strict buyer protection program that incorporates a moderator into the mix to solve issues. The other issue is because eBay’s original business model was for online auctions, and with Amazon and other sites employing a one-click purchase, consumers want more fast paced instant purchases and less of auctions. Ebay currently employs a Buy it Now option on most items it sells to help cope with this desire.

3. Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there any other solutions that eBay should consider? The solutions eBay is implementing are very smart solutions, but “ good” is a matter of opinion. With the introduction of numerous e-Commerce applications like PayPal mobile purchases, allows not only consumers, but also small business owners to incorporate these systems in their daily routine and eBay makes a profit off each solution.

4. Who are eBay’s top three competitors online, and how will eBay’s new strategy help it compete? Will eBay be providing a differentiated service to customers? EBay’s biggest competitors are Amazon, Google Search, and Facebook. With its new business model in place, eBay could use all of its e-Commerce applications and solutions to compete in the growing mobile and internet markets. Because eBay is implementing a mobile payment system within PayPal and BillMeLater provides credit for customers, eBay will have a more complete e-Commerce solution for their customers.

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