EBay, Amazon Businesses - Essay Example

Companies’ history eBay.com eBay has extremely modest origins. It started as an experiment by a certain Pierre Omidyar, in San Jose, California. The idea was the creation of a website which would run much like the stock market, for buying and selling consumer goods. It was originally known as AuctionWeb. The company went public in 1997, besides getting the capital it needed, finally changing its name from AuctionWeb to eBay. The reason eBay succeeds like it does is that buyers do not have to spend hours surfing the internet to find items to purchase. The idea driving the business has been the creations of space where millions are of items are available for sale. The search is quick and easy-the basic idea has been that it is the perfect economic model of supply meeting demand in the real world. eBay is in essence a website based on a mix of the B2B and the B2C business models. This makes eBay attractive given the fact that an industry well represented is bound to present ease of business transactions on eBay (Sinclair, 2007). The B2B auctions that developed slowly on eBay than consumer actions but they are growing. The main categories include businesses such as agriculture and forestry, construction, healthcare and manufacturing among others. The B2C business model is one tat is the very crux of the business where eBay is concerned, given the fact that basic manner of eBay’s work is to ensure that the ones willing to sell can reach consumers directly. eBay as a website utilizes the concepts of supply chain integration by making use of the technological advancements and network connectivity improvements by eliminating the costs of freight and transportation. It also eliminates a lot of logistical costs. It also helps in the elimination of geographical boundaries and in some cases ownership. The idea has therefore been that eBay basically eliminates various stages of the traditional logistical supply chain. The focus of the supply chain has been on the integration of partners in collective, secure and collaborative networks for shared visibility and planning. The idea in this supply chain is that a more effective movement is the movement of data as compared to the movements of products, parts or parcels. This would therefore mean that ownership transfers when orders are sent out, and catalogs are managed in a manner that lessens movement.  Amazon.com Amazon.com was founded in 1995 by Jeff Bezos, a classic overachiever who at the age of 37 started Amazon. Within a year it was named the poster child of e-biz. The company and its concept from the beginning was that of an online bookstore. The essential concept was based on the fact that an online data storage could offer more by way of books for sale even when compared to the largest brick-and-mortar bookstores and mail-order catalogs. For example the largest bookstores could have on offer a total of 200,000 books; an online bookstore would be able to house many many more offering the customer an extensive choice. Since 2000, Amazon's logotype is an arrow leading from A to Z, representing customer satisfaction (as it forms a smile); the goal was to have every product in the alphabet. Initially, the business plan Amazon followed was slightly unconventional, given the fact that it did not outline a profit expectation for more than five years of operation. This was an effective strategy, given the fact that the company grew at a steady pace as opposed to others that grew rapidly. This slow and steady process of growth meant that Amazon's stockholder started having complaints because of the fact that the profits were not growing at a fast enough pace. However, when the dot-com bubble burst, the merits of slow and steady strategy meant that the company was able to stay afloat when many others went out of business. Amazon persevered, and finally turned its first profit in the fourth quarter of 2001: $5 million, just 1¢ per share, on revenues of more than $1 billion, but the profit was symbolically important. There have been many innovations and additions that have been made by Amazon over the years that has meant that internet enabled auctions have been launched, and the Amazon library has branched out into things such as videotapes, music CDs, and DVDs, software, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, watches, health and personal-care items and even groceries among other things. The company is a typical example of the B2C model of business where the company sells already manufactured products to the consumer directly over the internet. Various categories are listed in various sections, equivalent to the organization of various things within a supermarket or a physical bookstore (Chan, Lee, Dillion and Chang, 2009). Amazon makes use of data mining techniques to promote selling of books by suggesting to the consumer based on books in the shopping cart and the buying pattern of the consumer with a specific profile. The idea that both Amazon and eBay have followed with a certain degree of seriousness, is to ensure that that they became hubs of development concept work, this has meant therefore that both these companies have needed t0o ensure innovation in programming and technological advancements in the long run throwing continuous challenges in the oaths of their programmers. They have managed to succeed partially in given the fact that new programs that interest programmers. The companies were the first movers when it came to an exposition of the abilities of the available platforms at a time when many companies still were cautious about the services technology. They showed that opening up some of their technology vaults can spur the creation of other software apps that expand their market reach. The basic idea is that both have represented a new wave of technology where compared to the way their respective industries traditionally have done business, their manner of functioning have been based on strategic innovations (Tucker, 2002). While these and many other strategy innovations relied on technology to change the game, not all strategy innovation is based on technology. References Sinclair, J., T., (2007). EBay business the smart way: maximize your profits on the Web's #1 auction site. Rediff Books. p182 Tucker, R., B., (2002). Driving growth through innovation: how leading firms are transforming their business. Burrett Koehler. p24 Amazon .and eBay: The New Face of Web Services. Retrieved February 21, 2010, < http://www.ismadjid.com/TR/mis/hal119.pdf> Mehrmann, J., (2001). Supply Chain Integration. Retreived February 21, 2010, < http://ezinearticles.com/?Supply-Chain-Integration&id=309153> Chan, H., Lee, R., Dillion, T., and Chang, E., (2009). E-Commerce, Fundamentals And Applications. Wiley books. p8 Rivlin, G., (2005). A Retail Revolution Turns 10. Retrieved February 21, 2010, < http://www.nytimes.com/2005/07/10/business/yourmoney/10amazon.html?ei=5090&en=c805d53acf76f2b3&ex=1278648000&partner=rssuserland&emc=rss&pagewanted=all> Amazon, official URL, < http://www.amazon.com/> eBay, official URL, < http://www.ebay.com/> Read More