Question

Stratgic Course

Please give me information about internal analysis of eBay company?

Answer 1

As part of the general SWOT Analysis, the internal strategic factors usually refer to the major strenghts and weaknesses associated with the organizational functioning of any company that can be altered or utilized to facilitate economic growth and competitiveness. On the contrary, the external strategic factors mostly allude to the opportunities and threat under SWOT analysis which fall outside the internal business functioning of any organization.Considering, ebay Company, which is one of the most prominent online retail portals in the world, various internals factors can be identified that have either contributed to or hindered its business growth and consumer reputation. Discussed below are these major internal strenghts and weaknesses of eBay company.

eBay's Internal Strenghts

Four distinct factors can be identified as part of eBay's internal strategic factors that represent its major strenghts. The following enumerates these four distinct strenghts:-

1) Brand Reputation

2) Internal Economies of Scale or Cost Effectiveness

3) Catering to different geographical areas and regional markets

4) Commendable Service

1) Brand Reputation: eBay has been long reconginzed as a top notch ecommerce retail brand all over the world.Along with its major global competitors such as Amazon, Walmart or Best Buy, consumer popularity of eBay as a giant retail brand has spread worldwide consequently generating a competitive edge and ensuring higher profitability which is also one of the major reasons for its global business expansion.

2) Internal Economies of Scale or Cost Effectiveness: Cost effectiveness along business operation is another attribute behind the company's mammoth scale of operation and global expansion. Internal economies of scale or controlling internal operational cost has enabled eBay to diversify its repository of services including almost all possible categories/types of products and services. Moreover, cost effectiveness has contributed to the expansion of eBay's operations management enabling the functioning of its subsidiaries such as Stubhub, Khijiji etc. Lower opertional and manegrial costs has also facilitated region specific operations transcending gerographical boundaries in e-marketing and online trading thereby enhancing company's global market share and profitability.

3) Tapping various regional markets: As obvious as it may appear, eBay currently operates in more than 25 countries covering all continents. It has been able to function successfully in some of the biggest online retail markets across the world such as India, US, Australia, Brazil, China, Mexico, Singapore and so forth owing much to its global brand reputation and internal economies of scale or cost effectiveness. eBay's success majorly owes to market segmentation in various regional markets thereby catering to large consumer group on the basis of demographic criteria such as income level, age group, variety in consumer preferences and price elasticity. It is one of the foremost attributes that provide eBay a competitive strenght over its global as well as local competitors.

4) Commendable Service: The company mission has always emphasized on result oriented approach on customer service and satisfaction. Consumers can easily choose from wide range of products and services according to their personal choice and pricing preferences.Various online tools are available online to guide customers through various range of products with price variations creating a virtual store like experience for the shoppers. Furthermore, any technical issues, payment related disputes, refund issues are also conveniently handled through a well organized online customer service facility.

eBay's Internal Weaknesses

There are few factors that have evidently impeded company's business growth and success of eBay which require rectification. These are identified as :-

1) Lack of innovation

2) Lack of adjustments to market variations

3) Common Business Model

1) Lack of Innovation: Innovation and creativity have become imperative for sustaining the business success in ecommerce retail industry.It is no wonder that the global retail giants have effectively implemented innovative business and marketing strategies according to ever-evolving consumer needs and societal changes. EBay evidently falls behind in this respect which has singificantly hindered its global profitability and business growth.

2) Lack of adjustments to market variations: The organizational structure and functioning of eBay follow a highly rigid and centralized unit which makes it difficult to adjust or alter its managerial operations to adhere to the variations in management and business functining especially in international market. Such management related inflexibility is a concerning hindrance to the sustenance of market share in the regional markets. The company has to consider the changing management conditions and other business related factors in these regional markets across the globe.

3) Common and imitable business model: The innovation and creativity also needs to be applied to eBay's internal business model which is easily imitable thereby reducing company's competitive edge against large scale online retailers as well as many local ones such as Alibaba, Bonanza, Newegg, Flipkart etc. Many new entrants in the industry are now able to follow the transparent and easily imitable business model of the company.Rectifications along these aspects need to be implemented as soon as possible.