E-bay Case Study

At least 30 million population depart buy and lead astray swell up over $20bn in merchandise (in 2003) oft than the arrant(a) domestic product of only but 70 of the worlds countries. More than 150,000 entrepreneurs will earn a full-time animation swoping everything from diet pills and Kate Spade handbags to 30,000 BMWs and hulk industrial lathes. More automobiles, of all things, sell on eBay than yet no. 1 US dealer AutoNation. So what does this render up to? This is a whole radical-made way of doing argumentation, says Whitman. Were creating fewthing that didnt exist before.It wasnt planned, but as drug users plunged into consumer electronics, gondola cars, and industrial gear, eBay fol uttered. Today, eBay has 27,000 categories, including eight with gross sales of more than 1 billion each.eBays business determineValue in eBay is created by proViding a virtual worldwide securities industry for buyers and sellers and collecting a tax on transactions as they hap pen. The business mock up of eBay relies on its customers being the ecesiss product-development team, sales and trade force, merchandising department, and the security department.The organisation, interrogationed by one thousand thousand Whitman, was founded in 1995, when Pierre Omidyar launched a sanctioned turn up called Auction Web. His girlfriend valued to trade her collection of Pez dispensers, but Omidyar had a broader vision in mind, namely empowering frequent consumers to trade with verboten the need for enceinte corporations. He even wanted traders to be credit worthy for building the community and deciding how to build the website. It worked soon he found himself state e-mails from buyers and sellers during the day and rewriting the sites softw atomic number 18 package at night to incorporate their suggestions, which ranged from fiXing software bugs to creating new product categories.Some 100,000 messages from customers are post per week in which tips are shar ed, schema of rules glitches are pointed out and castrates are lobbied for. The COO, Brian Swette, is quoted as saying, The trick is to keep up with whatbuyers and sellers want. Weve had to incessantly change how we run. We start from the principle that if t heres noise, you wear listen. Currently the engineering science allows every imprint of every potential customer to be traced, yielding rich information.Structurally, the business model is realised through 5,000 employees, roughly half(prenominal) of whom are in customer obligate and a fifth in technology. A key role in eBay is folk manager, a concept Whitman brought to eBay from her years in trade giant P&G. grade managers direct the 23 major categories as well as the 35,000 subcategories, from collectibles to sports gear, to jewellery and watches, and even jet-planes.Conventional companies might spend big capital on getting to k nowadays their customers and persuading them to pull up stakes feed approve, but for eBay such(prenominal) feedback is often free and offered without the need for enticement. blush so some of the partys most impressive ways of getting user arousal do not rely on the Net and do not have it away free. eBay organises Voice of the Customer assorts, which involve wing in a new group of about 10 sellers and buyers from around the sphere to its San Jose (Californian) every few months to discuss the in depth. Teleconferences are held for features and policies, however small a change involve. Even workshops and classes are held ascertain people how to make the most of the site. Participants ply to double their marketing natural process on after taking a class.The bon ton is governed from both outside and The eBay system has a source of automatic bidding in the form of buyers and sellers rating each otherwise on each transaction, creating rules and norms. Theres an educational system that offers classes around the country on how to sell on eBay. Both buyers and sellers build up reputations which are valuable, in turn supporting(a) further good conduct in themselves and others.When that wasnt quite enough, eBay formed its own jurisprudence force to patrol the listings for fraud and outpouring out offenders, the Trust and Safety Dept, now staffed by several hundred eBay employees worldwide. They do everything from trolling the site for suspicious listings to working with law enforcement agencies to start out crooks. eBay also has developed software that recognises patterns ofbehaviour common to previous fraud cases, such as sellers from Romania who recently started selling large numbers of big-ticket items.eBays management trillion Whitmans entitle and past has heavily influenced the management of eBay. When she united the company in 1998, it was more of a collection of geeks, handpicked by the pony-tailed Omidyar, than a blue chip something which underpinned Omidyars recruitment of Meg. Meg, an ex-consultant, filled many of the elde r management roles including the head of the US business, head of international operations and vice-president of consumer marketing with consultants.The result eBay has drive data and metric driven. If you rear endt measure it, you cant control it, Meg says. Whereas in the early days you could touch and feel the way the organisation worked, its current size means it of necessity to be measured. division managers are expect to spend their days measuring and playacting upon data indoors their fiefdom.Some measures are example for e-business and include how many people are visiting the site, how many of those then depict to be have sex users, how long each user remains per visit, how long pages take to pass on and so on. A measure Meg likes is the take rate, the ratio of revenues to the value of goods traded on the site (the higher the better). She measures which days are the busiest, directing when to offer free listings in order to stimu new the supply of auction off items. Noise on the discussion boards is utilise to understand whether the community is in supportive or ready to kill you mood on a scale of 1 to 10. Normal for eBay is around3.Category managers in eBay, unlike their counterseparate in Procter and Gamble, can only indirectly control their products. They have no caudex to reorder once levels of toothpaste or washing-up liquid run low on the supermarket shelves. They grant tools to buy and sell more effectively. What they can do is endlessly try to eke out small wins in their categories say, a repulse jump in scrap-metal listings or new bidders for comic books. To get there, they use marketing and merchandising schemes such as enhancing the display of their users products and bountiful them tools to buy and sellbetter.Over and higher up this unusual existence, the work envir-onment can be tough and ultracompetitive, say ex-eBayers. Changes often come only after PowerPoint slides are exchange and refined at a low level, eventually presented at a fourth-year level and after the change has been okay in a sign-off procedure which includes every department. An advance in the ways office could be searched for took ten months to happen. Aware that digest can mean paralysis, Meg equip consultants (who else) to benchmark the rate at which change is indeed implemented in eBay.eBay was rated as average amongst the companies surveyed. Over time eBay has upgraded its talent to ensure the technology does not rule. Until the late 1990s, the site was plagued with outages, including one in 1999 which turf out the site down for 22 hours manners of software problems and no backup systems. power Gateway Inc. Chief Information officeholder Maynard Webb, who joined as president of eBays technology unit, quickly took action to upgrade systems. at one time the site is down for less than 42 minutes a month, despite much higher traffic.Meg is a leader who buys into the company in more ways than one. Having auctioned some $ 35,000 worth of furnishings in her ski condominium in Colorado to understand the selling experience, she became a slip by seller among the companys employees and ensured that her discipline from the experience was listened to by fellow top execs. Meg is also known for earreach carefully to her employees and expects her managers to do the same. As the business is as much, if not more, its customers, any wrong move can cause revolts within the community that is eBay.Most of all eBay tries to stay apprised and flexible.Nearly all of its fastest-growing new categories emerged from registering seller activity in the area and quietly giving it a nudge at the obligation moment. For example, after noticing a few car sales, eBay created a separate site called eBay Motors in 1999, with special features such as vehicle inspections and shipping. Some four years later, eBay expects to gross some $1 billion worth of autos and parts, many of which are sold by professional dealers.The democ ratic underpinning of eBay, whilst easily embraced by customers, can, however, take some getting utilize to. New managers can take cardinal months to understand the ethos. Some of the terms you look on in business school drive, force, commit dont apply, says former PepsiCo Inc. exec William C. Cobb, now senior vice-president in charge of eBays international operations. Were over here listening, adapting, enabling.