Outsourcing Ebay Case Study

903 Words4 Pages
. Companies like Dell have been reducing outsourcing in some areas, eBay should do the opposite. eBay’s has very valuable resources which it uses to create a sustained competitive advantage, but none of these valuable resources are created by the employees at the company. By increasing outsourcing eBay can decrease their costs and lower their overhead. By decreasing costs eBay can pass those savings on to the sellers on their website, charging them less to list their items and attract more users of the site. a. eBay is described as “The World’s Online Marketplace.” Organized to work like your local garage sale, where people can sell items for a set price they determine to anyone that is interested in purchasing the item. These items range…show more content…
eBay operates with a unique business model compared to other businesses of the time. eBay was created at the beginning of the internet boom, with a transaction-based business model. eBay generates revenue by charging sellers a listing fee anywhere between $.25-$2.00. They also charge a final value free as a percentage based on the final price charged for the item, these range from 1.25%-5%. Buyers can shop and bid on the items available for free or they can use the “Buy It Now” feature to purchase the item instantly for a price set by the seller. Most transactions go through PayPal which eBay also owns and the shipping details are ironed out between the buyer and the seller. Since eBay never handles the products they are free to use their money to hire better staff and create better and more efficient features for their website, and not on storage and warehouse space. eBay was able to grab a large market share in the e-commerce world by being a first mover in the…show more content…
Some of eBay’s most important resources include, brand recognition, items available, PayPal and globalization. Brand recognition is valuable, rare, very costly to imitate and strongly organized to gain value creating a sustained competitive advantage. EBay also offers the largest amount of items for sale drawing in more customers than other companies. This resource is valuable, rare, costly to imitate and is the main source of it organizations value. PayPal is another strong resource for generating value for eBay, PayPal is not rare because there are other businesses that do the exact same thing. PayPal is larger than these other businesses so it would be very costly to imitate their business. The organization of eBay is based around Paypal and the use of it to make transitions for items. Globalization is another large resource that contributes to eBay’s success. eBay’s ability to be accessed by anyone, anywhere around the globe creates significant value. There are many other companies that provide the same service eBay does, so globalization is not rare in this market. The wide reaching power of eBay around the world makes it costly to imitate by other companies. Globalization is the key feature of eBay and the auction site is organized around the ability for everyone to access the market to buy and
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