electronic commerce ec star sanaz kahkouee به نام خدا

Electronic Commerce EC STAR

www.ebay.com

Sanaz Kahkouee

خدا نام به


www.ebay.com

Sanaz Kahkouee

Achieving Sustainable Competitive Advantage in E-Commerce using Information Systems

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Introduction

E-commerce influence competitive environment in many ways. Internet change competitive environment and reduce

differences among competitors as offering are difficult to keep proprietary.

Achievement of competitive advantage is vital for companies. Companies have begun using information systems strategically

to gain significant competitive advantage. Information Systems can be used by

companies to reduce costs across the board, in relation to competitors and enhance differentiation in product quality and services in order to gain advantage over their competitors.


www.ebay.com

Why ?


www.ebay.com

Most profitable company Most profitable company

Fastest growing companyFastest growing company

Good Business ModelGood Business Model

World wide community World wide community

Best e-business leading companyBest e-business leading company

Most widely known online auctionMost widely known online auction

World’s largest online marketplace

World’s largest online marketplace

Most popular shopping website Most popular shopping website


www.ebay.com

Competition is so fierce in e-commerce

HOW eBay achieved Sustainable Competitive Advantage over its competitors

Different models introduced for achieving Competitive Advantage

( 5 Competitive

Forces )

( 5 Strategic

Thrusts )

Porter’s Framework

Wiseman’s Model

INFORMATION SYSTEMSINFORMATION SYSTEMS

COMPETITIVE ADVANTAGE


1. Overview of Competitive Advantage Concepts2. eBay Company Overview

Corporate history Company profile Business model

3. Business Strategy Analysis Competitive Forces of eBay (Porter’s Five Forces

Model) Competitive Strategies of eBay (Wiseman’s Strategic

Thrusts Model)4. Conclusion and Summary

Presentation Overview


“Competitive Advantage (CA) exists when a company is able to return higher profits

than its competitor and if this advantage is maintained successfully over time that is referred to as a Sustainable Competitive

Advantage (SCA)” Campbell et al 2001

What is Competitive Advantage?


www.ebay.com


Corporate History

The online auction website was founded as Auction Web in San Jose, California , on September 3, 1995

Founded by French-born Iranian computer programmer Pierre Omidyar

Today is the world’s largest and most profitable online Auction House

The UK’s number one e-commerce site eBay provides online marketplaces for the sale of goods and services

by a diverse community of individuals and businesses. It also provides commerce, platforms, online payments services and

online communications offerings to individuals and businesses.


Name: Pierre Omidyar Title: Founder and Chairman eBay responsibilities: Overseas strategic direction and g

rowth, model and site development, and community advocacy.

Education: B.S., Computer Science, Tufts University Nov 1996: Licensing deal with co. Electronic Travel Aucti

on to sell plane tickets and travel products Sep 1997: Changed name from AuctionWeb to eBay Sep 1998: eBay went public and omidyar became instant b

illionaire Forbes 200 World’s Richest People: #17 Net Worth: $8 billion The Richest Iranian #1: Changiz Khan : $417 billion !!?

Corporate History


Company profile – Mission & market

MISSIONMISSION

eBay’s mission at its lunch was to provide a global trading platform where practically anyone can trade practically anything on earth ”

eBay’s mission at its lunch was to provide a global trading platform where practically anyone can trade practically anything on earth ”

MARKETMARKET

eBay enables trade on a local, national and international basis. It features a variety of international sites, categories and services.

eBay enables trade on a local, national and international basis. It features a variety of international sites, categories and services.


Company Profile

Registered Users : 192.9 million users worldwide Employees: 15,500 (2008) Revenue : $8.46 billion USD in 2008 (an increase of 28.5% over FY07) Net Income : $348.3 million for year 2008 (a decrease of 1% over

FY07) Global presence in 33 markets and has about 99% share in most of its

markets Hosted approximately 383,000 stores worldwide with 50,000 trading

categories Operation : in more than 30 countries and established 30 localized

websites eBay owns PayPal, Skype, StubHub, Gumtree, Kijiji,and other

businesses.

Strong margins and revenue

growth

Market leadership

Increasing market share

Recognizable brand name

Business model

International operation (PayPal

services)


International Operation


E-Business Model

Supplier / Seller

Customer / Buyer

Customer / Buyer

Dropshipper

Chat rooms C2C

B2C


Competitive Advantage in E-Business Model

Four sources of competitive advantage in e-Model:

Save on costs, due to lack of intermediaries Save on time in communications and transactions Improve information management & supply chain

management Increase in market share, eBay members and revenue base


www.ebay.com

Business Strategy Analysis


Competitive Forces Analysis

Porter’s Five Forces Framework


Amazon

Buy.com

Yahoo!

MSN

Wal-Mart

Macy’sSam’s Club

First auction

Dell

Home Depot

EBay changed the rules of competition by creating a new type of service company that has become a leader in C2C online

auction market

Bidbay

Industry Competitors


Industry Competitors

AmazonYahoo!

eBay Low business cost High business cost

Large selection of goods for customers (50,000 categories)

Couldn't provide the number of products/goods as eBay did

More than 12 services on site Fewer than five different services

“Buy it now” feature, “Billpoint” service and "PayPal” service

None of them offer these services

Revenue comes from listing and sales fee

Amazon and other rivals offered free auction

Automatic insurance for sales Not offer insurance Provides free space for auction item Pictures

Not provide space for pictures: place pictures on some other sites

BidBay

Source : Cost Analysis http://www.alysta.com/software/ebayyahoo.htm


Threat of New Entrants

Online auction market is Easy to set up Highly automated customer service management

systems (CSM) to attract buyers and sellers High quality customer services to keep customers

satisfied Chat rooms, discussion boards, FAQs…

CRM systems on C2C business model to get close to customers and increase their loyalty.

Large Market Share and expansion of eBay services and brands (99% market share)


Threat of Substitutes

eBay differentiate itself from the competition and gain CA using IT

created a Developer Program to: Keep costs low using reliable, scalable technology Expand into new markets Move quickly through development and testing

eBay feedback profile help it to make changes and improvement constantly

Strong technology platform for customers to interact repeatedly

feedback forum service helps Knowledge Management


Bargaining Power of Suppliers and Buyers

Use IS to develop relationship with customers/suppliers and reduce their bargaining power to gain CA

Improved market service and customer loyalty schemes eBay locked its customers in the business Constantly develop various tools, programs and applications to offer:

SafeHarbor, PayPal Buyer Protection, The eBay Toolbar, Seller Tools, Editor kit…

Lower transaction costs

Easier access to price and product

information

Convenient purchase of

associated services

Lower selling costs

Access to wider market

Avoidance of powerful channels


Competitive Strategies Analysis

Wiseman’s Five Strategic Thrusts


Competitive Strategies Analysis

Strategic Thrusts

Information Systems Role

Sustainable Competitive Advantage

ALLIANCEALLIANCE

• Provide an easy-to-use marketplace for eBay’s customers• Keep its profits growing

• Provide an easy-to-use marketplace for eBay’s customers• Keep its profits growing

• Purchase of Paypal, Skype, StubHub, Gumtree, Kijiji and other businesses

• Various IS tools such as: eBay Safety Center, Seller tools and Educational tools

• Purchase of Paypal, Skype, StubHub, Gumtree, Kijiji and other businesses

• Various IS tools such as: eBay Safety Center, Seller tools and Educational tools

GROWTHGROWTH

• Facilitate credit cards payment & provide simplified cross-broader transactions and international operation• Expand into new markets and increase revenue base

• Facilitate credit cards payment & provide simplified cross-broader transactions and international operation• Expand into new markets and increase revenue base

• PayPal’s services and International websites with local languages & currency• Programs and resources such as Buyer protection, feedback rating & Account guard for members

• PayPal’s services and International websites with local languages & currency• Programs and resources such as Buyer protection, feedback rating & Account guard for members

INNOVATIONINNOVATION

• Develop new products and keep customers satisfied • Leader and innovator of on-line auction market

• Develop new products and keep customers satisfied • Leader and innovator of on-line auction market

• High quality customer service and eBay feedback profile to identify changes in customer needs • Internet technology and web-base auction• Chat rooms, FAQ, etc…

• High quality customer service and eBay feedback profile to identify changes in customer needs • Internet technology and web-base auction• Chat rooms, FAQ, etc…

DIFFERENTIATIONDIFFERENTIATION

• Distinguish eBay from other competitors • Increase its market share

• Distinguish eBay from other competitors • Increase its market share

• Developer Programs

• Buy it now feature and PayPal service for customers

• Other 12 services on eBay site

• Developer Programs

• Buy it now feature and PayPal service for customers

• Other 12 services on eBay site

COSTCOST

• Reduce transaction costs to eBay's suppliers and buyers • Lower the actual cost of doing business

• Reduce transaction costs to eBay's suppliers and buyers • Lower the actual cost of doing business

• C2C e-commerce systems and software applications such as automated Customer Service Management System (CSM)

• Different technologies on eBay e-business model

• C2C e-commerce systems and software applications such as automated Customer Service Management System (CSM)

• Different technologies on eBay e-business model


SERVICE

GLOBAL…

SYSTEM

To Became the World Leader in e-Market PlaceTo Became the World Leader in e-Market Place

BUSINESS

MODEL

eBay Strategies

Conclusion


Summary

Organizations are able to achieve Sustainable Competitive Advantage with the use of Information Systems to support business strategies which

directly affects its competitive position


www.ebay.com

electronic commerce ec star sanaz kahkouee به نام خدا

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