EBay Bids for Structured Change. Case Study Answers
EBay started out with a U form, or functional, design. What changes in that design have already occurred as a result of the company’s growth? What kind of changes seem likely for the future?
• One of the first things we need to look at is what the u-form design is. The U-form organization (U stands for unity), also called functional design, relies almost exclusively on the functional approach to departmentalization . The U-form design is used to implement a single-product strategy. Because of the emphasis on functional activities, coordination is extremely important (edugov). Advantages: The costs of staffing each department with experts is lower than in organizations with other …show more content…
In your opinion, what changes should be made to accommodate further overseas expansion?
• As eBay expands into more foreign markets, eBay will have to further evolve and allow for a more country centralized execution of its policies and manager control. I can certainly see that in countries that have a high religious influence, such as the Muslim dominated hierarchy, religious dictates will control how eBay presents itself. In the Koran it states that you are not allowed to profit off another. This holds true in examples like banking. However in some democracies eBay is being stifled in its ability to require payments thru PayPal, as the book states an example of Australian government, curtailing eBay’s ability to require payment thru PayPal (Griffin, 2012). To further accommodate expansion into these diversified markets eBay will of course have to follow religious precepts, government regulations and allow for more targeted products. It would be unwise of eBay to allow many items that are permitted in democracies and free thinking countries to be purchased in a more conservative nation. In the conservative nations, the potential buyers can still buy off eBay USA. This type of targeted selling of their system has created eBay of Canada, eBay of USA, and eBay of Australian, eBay of Belgium and so on (whoweare). Because of eBay’s presence in over 30 countries, yet PayPal is only used in 16 countries,
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Ebay, as a company itself, fits more in the category of an oligopoly, which is actually pretty common in any market. Other alternative websites include Yahoo!, Amazon, and Quibids, but there are only a small number of them, certainly not hundreds as in monopolistic competition. Also, eBay is interdependent on the few other auction website companies, competing with the fees they charge, as well as quality of customer support, and buyer/seller reliability. Another characteristic of eBay that coincides with it being considered an oligopoly is the fact that it has numerous entry barriers. It’s such a large company with many restrictions, and it would be hard for an up and coming substitute auction website to break into the market and compete with eBay or the other top companies in the industry. (6)
Many off-ebay customers are not attracted towards PayPal because of the fee based revenue model.People mainly prefer free services.Even credit cards offer a interest free credit period in which money transfer/transaction can be done without paying any extra money.Paypal should also think on modifying its service on the similar lines.
United Parcel Services Inc. has a functional organization structure in the sense that common department such as: marketing, finance, human resource etc. are organized by separating each of and managing them independently. Managers of different functions report up to the Chief Executive Officer (David Abney) who has responsibility for all of the operational areas. The functions are separated by expertise which promotes functional innovation and also it is easy for each department to understand their core responsibilities thus they can be held responsible in case of any
eBay has a choice preferred standpoint. Regularly contributed similar to the world 's greatest store, and have a bigger number of things available to be purchased than anyplace else. However its maintainability props on patch up unstable ground as omnichannel world envision, for arranging purposes, that everything is available to be purchased in each commercial center, each methods, and each channel. Partaking connected shoppers may never get to that world, yet it 's a helpful arranging presumption.
According to Bateman and Snell, “Two fundamental concepts around which organizations are structured are differentiation and integration” (2011, pg. 227). Differentiation refers to the different units that work on different kinds of tasks with the use of different skills and work methods in an organization. These differentiated units are combinedand coordinated into an overallproduct for the purpose of achieving the organization’s mission as the result of integration. The two fundamental concepts indicate how the organization
ULV Organization: In order to pursue business unit and brands objectives of making savings on product development and encouraging cross-pollination of innovation across brands, Perfumes and Cosmetics division adopted to have both centralized
Alipay’s core service is an escrow service which solves the concerns related to settlement risk between buyer and seller. In this system, after a buyer commits himself/herself to an online transaction, his/her payment is held in an Alipay account until he receives the product ordered. After the product is received the buyer notifies Alipay and the payment is then forwarded on to the seller. As of December 2006, Alipay had 33 million registered users. (Source: “Alipay - 33 Million Registered Users,” www.imnewswatch.com, February 5, 2007) PayPal was a leading online payment company purchased by eBay in mid-2002. In June 2007, PayPal had 143 million user accounts across the world. Through PayPal, individuals and businesses could send or receive money over the Internet. PayPal supported payments in US Dollars, Canadian Dollars, Australian Dollars, Euros, Pounds Sterling, and Japanese Yen. Buyers could also pay for their online purchases on various e-commerce websites and auction sites like eBay using the balance in their PayPal account. Though this mode of transaction was quick, there were also a number of complaints from disgruntled PayPal users. Most of the complaints were related to the dispute resolution procedures of PayPal. In eBay China, transaction fees used to be charged as a percentage of the value of completed sales. This ranged from RMB 10 for a sale worth RMB 500 to RMB 115 for one worth RMB 20,000 (Source: “EBay China
When looking at eBay’s target market, the segmentation of users appears to be majority males, ranging from 25-34 years old. Over half of the users don’t have kids and also lack college experience. The majority of the people are Caucasian and have a household income of $100,000. After looking at this information there are some good opportunities that eBay could capitalize on.
Manager’s of an organization has to use structure to help the company run efficiently. “The five types of organizational structures are functional, divisional, matrix, team-based, and virtual network” (Draft, 2013, p.316). Functional structure in an organization that is developed by grouping departments by the skills, level of knowledge, activities done daily, and the resource used. “This structure places specific departments from the bottom to the top” (Draft, 2013, p.318). For example, specific departments such as: human resources, accounting, engineering, and manufacturing are placed at the top, while there are mostly seen at the bottom in other organizations. While common functions such as; people, facilities, and other resources are combined together as a single department instead of being divided into multiple departments.
There are likewise low leave boundaries in this industry. EBay possesses 35.14 % of the business sector starting 21st of February, 2012, which leaves space for them to grow. EBay requirements to stay aware of purchasers needs and needs alongside watching out for its rivals keeping in mind the end goal to be fruitful.
The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. “Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its
The company eBay Inc. is an American multinational Internet consumer-to-consumer corporation. Founded in 1995 by Pierre Omidyar in San Jose, California, it is now a multi-billion dollar business with operations localized in over thirty countries including China and India. It’s main enterprise is eBay.com, an online auction and shopping website that allows people and businesses to buy and sell a broad variety of goods and services internationally. Millions of collectibles, décor, appliances, computers, furnishings, equipment, domain names, vehicles, services, intangibles and other miscellaneous items are listed, bought, or sold daily on eBay. Anything can be auctioned on the site as long as it is not illegal and does not violate the eBay’s Prohibited and Restricted Items policy.