Strategic Implications of IT - Research Paper Example

?Running Head: Strategic Implications of IT for EBay Strategic Implications of IT for EBay [Institute’s Table of Contents Tableof Contents 2 Purpose of the Report 4 Background of the Topic 5 Discussion of Current Issues 7 Recommendations for Managers of IT 9 Abstract The study report is about the strategic implications of the information technology in the upcoming years for eBay. EBay is one of the recognized corporations of the U.S. that deals with the online auction of wide variety of goods and services. The introduction of the report consists of the background knowledge of the organization, following by the assessment of the company’s current strategies and the success of the organization. Moreover, from the internal and external environmental analysis, the current issues and problems that the company is facing would also come under exploitation that is of great value and catches the management attentions. Moreover, how these concerns are creating an impact onto the brand image is also the key highlighting feature of the report. However, based on the current issues, recommendations would come under presentation that would prove to be helpful for the managers of information technology of the organization. At the same time, knowing when and how to grow the enterprise is one of the essential components of the strategic management process that should come under grave considerations and should not come under ignorance. Purpose of the Report In the today’s fast-paced world, information technology is one of the arenas that are not only escalating at an unprecedented rate but also bringing in new changes with it. In addition, it has altered and shifted the ways and standards of living of the general population of the world. This is due to the reason that technology has made the preparation, transfer, and dissemination of the information very economical. Therefore, the company and its people need to think and feel bigger coupled to having an apparent direction. However, above and beyond having the external environmental analysis, it has become vital and imperative to understand the organization from internal perspectives as well that is to assess the resources and its competitive position on a critical note. According to one of the well-known authors Robbins, “Every organization has strategies for doing what it’s in business to do” (2010, pp. 163). Strategic management in the present epoch has become one of the most significant elements of any organization. This is due to the reason that it aid in defining the administrating the planning, and everyday operations of the enterprise. Moreover, it takes account of employee job descriptions, planning and budgeting, and the overall operations goals and objectives of the enterprise. However, studies have provided evidence for the fact that with the implication of strategic management process, the companies are able to fulfill their processes in a much more efficient way than it used to be previously. This is particularly because it encompasses the evaluations, decisions, and actions that facilitate the organization in creating and upholding their competitive advantage (Bateman & Snell, 2010). In the twenty first century, the implication of strategic management more frequently comes under application in the field of information technology on a broad spectrum. Therefore, the primary and chief purpose of the report is to define the strategic implications of information technology in the upcoming years. Moreover, eBay is one of the major information technology organizations that would come under presentation with reference to the strategic implications under next three years. Furthermore, the current issues that eBay are going through and recommendations for the managers of IT would be the key highlighting concerns of the report. Background of the Topic EBay Inc. is one of the leading internet based consumer-to-consumer (c2c) organizations of United States of America that have come under establishment in the latter years of the twentieth century. EBay administers and deal with a shopping website, eBay.com that offers the customers with online auction. Moreover, the customers that include both common people and businesses have the opportunity and choice to buy and sell an extensive and wide-ranging goods and services on an international platform. Indeed, eBay is a place that provides the sellers and entrepreneurs with an occasion and prospect to reach the buyers from anywhere in the world, and the buyers come across with an access to the biggest and broadest collection of saleable items of the world (Weber, 2008). Moreover, the evidence provides the verity that eBay has become more or less a synonym for the online auctions, due to its strong position and popularity in the online auction industry. However, the records expose the reality that the growing demand of online auction industry on a global perspective is one of the key success factors for eBay. In addition, the success of the enterprise can also come under depiction with the statistical data of the organization that it encompasses hundreds of millions of registered users in their customer database along with more than fifteen thousand employees (Prince, 2007). The achievements of the organization reveal the piece of information that eBay is one of its distinguished and remarkable success stories that can come under consideration as a multi-billion dollar business. Furthermore, the corporation saw radical growth with the expansion of the product categories. Therefore, the accomplishment can come under witness by the fact that it has its operations that is running on local basis in more than twenty-five countries. However, the records also give a clear idea that the as the world entered into the twenty first century, eBay also witnessed the success to paramount heights in few years of its foundation. With the passage of time, eBay has also renewed its standard suction formats in comparison to the older auction formats that came under exercise (Prince, 2007). The range of items that the customers and businesses can purchase and put up for sale on eBay on an everyday basis include “decor, appliances, computers, furnishings, equipment, vehicles” (Weber, 2008), and several other miscellaneous and diverse items. Moreover, eBay also allows the auction or selling of the services and intangible items. However, it should come under notice that the customers have the option of purchase and sell items that are legal and should not breach or violate the policy of eBay prohibited and restricted items. EBay also permits the consumers to do business that is buying and selling of items using the local currencies as eBay has separated its sites for United States and UK (Weber, 2008). According to the strategic statement of eBay, “eBay allows customers to create individual auctions and online stores in order to sell used and new products. This process is facilitated by the ability to create communities of interest, providing secure transaction services, and peer review process in a global environment” (Liquori & Benjamin & Barbu, 2009, pp. 17). EBay has an intention to remove the physical barriers between the buyers and sellers, which they illustrate by providing “individual auction and online store for their customers” (Weber, 2008). Additionally, they are making efforts to create added values with the additional information through communities of interties. Creating confidence amongst the customers and providing them with an open market are other implications of their strategies that have come under definition of their strategic statement. Therefore, the implication of this strategic statement clears the aims and business processes of eBay and exhibits the prospects that eBay wants to practice and pursue. Discussion of Current Issues EBay is the leading organization that has gained strength due to being the pioneer in the industry of online auctions. Although, eBay had come across success that reaches skyrockets due to its core and distinctive competencies over other competitors, but the results of the recent survey divulge the piece of information that eBay came under the worst ranking list amongst the websites that rated the customer service and communication, and average ease of communication. Moreover, in the category of recommended selling venue, eBay was on the last numbers amongst its competitors. Therefore, it can come to conclusion that eBay is encountering a number of problems and issues due to which it is losing the customer satisfaction (Holden, 2004). EBay has also come across several controversial arguments that incorporate the fraud cases, policies that entailed the sellers to utilize the PayPal methods, and problems related to falsification and property violations in auction items. In addition, legal actions have also come under performance against eBay that laid the blame of stealing the information shared in confidence by the inventors of the organization’s patents (Holden, 2004). However, the records reveal the piece of information that recently eBay has come under involvement in litigations that have extended over the time, which is causing mammoth expenses and liabilities to eBay where the organization on an overall basis is coming under exposure to uncertainty that is creating a radical impact on its brand image. Moreover, the operations of eBay have also come under its extreme and harsh impacts (Holden, 2004). Through the value chain analysis of eBay, quite a lot of issues have come under identification that are present and may come across in the near future as well. In the today’s era where the entire population of the globe is in front of the recession, the poor economical conditions of the people have made a drastic effect on to the sales of the items. Therefore, eBay is also encountering the issue of too many sellers that place their items for the auction, however, the number of buyers are decreasing on a daily basis in comparison to the sellers selling their products (Holden, 2004). Safety and security of the auction process and payment has become another grave issue for eBay. This is due to the increasing techniques and methods of stealing the private and confidential information of the consumers while making online payments. Moreover, eBay is also facing several cases of fraud through the users involved in the action and review process. This is due to the advancement in technologies, new software and programs have come under development that helps the people to create fraud in online auction processes. Furthermore, the internet fraud has become one of the imperative and substantial threats for eBay, which is causing them increase in their overall costs and adversely affects the confidence and level of trust of their customers (eBay, 2009). One of the current issues that eBay lacks in and has become their strong point of weakness is that the ineffective screening process within the organization that can secure and safeguard is not adequate enough, which has the ability to manage and organize the bogus, fake or counterfeit products. Moreover, eBay does not even have an efficient and capable screening process that can control the sales of such type of false and counterfeit products on its market places (eBay, 2009). In the recent times, eBay has come across a considerable and dominant threat, which has converted from their weak point, is that the auction services and sites has been unavailable and inaccessible for the customers including both buyers and sellers for long hours that even lead to huge losses in their income and revenues. This is due to the reason that eBay has encountered with the failures in their systems that creates a huge probability of increased risks to their operational losses. This interruption for such long hours on a repeated or continuous basis lead the customers create a perception of providing unreliable and erratic systems, which would have an adverse and negative impact on to the organization’s reputation (eBay, 2009). Distant to the system related problems and growing issues, the amalgamation of certified, practiced, proficient, skilled and professional sellers is one of the matter of concerns for eBay in the current and existing point in time. Recommendations for Managers of IT Although eBay is currently facing few major concerns in the present epoch that has come under presentation in the earlier portion of the report, yet there are solutions and recommendations that can come under implementation in order to bring eBay to the heights of success that it had reached in the previous times. As the market and its size has reached the global platform that has created opportunities for numerous competitors, therefore, protecting the market share has become an imperative and vital step in order to make the organization sustain on a worldwide basis. EBay should have a continuous market search and scan the new players entering into the market on a continuous basis would provide them with the idea about the growing competitions and how to upgrade and improve the strategies for sustainability. Moreover, by developing strategic alliances keeping in view the global platform, it would prove to be fruitful in the creation of large database of not only customers but sellers as well. Additionally, with the rapidly growing market, keeping and continuing the speed to keep up to the market has also been very crucial in today’s instance, therefore, eBay should put an effort endlessly to their growth ideas and proposals while at the same time be cautious and aware of the growth rate of both the market and organization. Maintaining the customer base or the subscriber base is also an essential facet that should not come under overlooking as capacities and economies of scale are a major contributor to the success of the organization, therefore, eBay should try to maintain their brand image with effective advertising campaigns highlighting the key features and success stories of the organization. In addition, lifestyles and attitudes of the inhabitants of the world are changing at a constant speed coupled to the rising and mounting acceptance and use of more internets has become a widespread trend amongst people of all age groups. Consequently, by participating dynamically and actively in user and community’s education through various programs that boost the awareness would facilitate eBay in getting the attention of more and more users. Supporting multi language platforms that provide the sellers and buyers to have an option of selecting the language of their origin would create a competitive advantage of global market to customers from the communication perspectives. Since eBay is an online organization that provides the businesses and customers to buy and sell, therefore, internet technology and related applications must be a part of the core competencies. EBay should be ahead of their competitors by developing software standards and protocols that should be updated with the emerging and ever-changing technologies. In addition, the modern studies and records illustrate the fact that this particularly industry is still in a growing phase, therefore by being the foremost and core driver of the technological advances by adjusting to the technological progress, as it would facilitate to great extent. With reference to the technological innovations and advancements, research and development in this field would demonstrate to be constructive for eBay and a leading factor for their success. As an outcome of it, eBay must concentrate on recruiting and hiring the creme technical persons of the industry. Moreover, proper and extensive training and rewarding would maintain their motivational level and would productive output from them would be the consequence. Since one of the most crucial weaknesses that eBay holds, is the accessibility and exposure to scores of fraudulent and falsified activities. Due to this reason, eBay has come under involvement in an assortment of legal actions. Hence, by having a set of people or strong programs that keeps a close eye and intimately monitors for the frauds that happen while making any sort of transactions incessantly and constantly would not only create but also augments the level of confidence and trust of the customers on eBay. From the reports and analysis, one of the weak areas of eBay has come under observation that the system backup plans as the breakdowns would create a profound impact on to the trading activities of eBay. However, by having a complete backup plans and systems with respect to the system breakdowns or collapse, as it would not create any hindrance in the daily activities of eBay and would maintain the customer satisfaction. EBay should even work on acquisitions as it provides the enterprise with the opportunities for new businesses strategies. Besides, the emerging and developing nations such as India and China have much potential and skills in them, therefore, eBay should create development in such areas with vast and colossal prospects. As the globe is encountering the period of recession in the recent years that has created uncertain economic conditions for the masses, this has increased the fashion and popularity of purchasing used goods, rather than paying a big amount on the fresh and new product. Therefore, the decreasing and curbing spending nature of the customers has created an increasing opportunity for eBay to take this into notice and emphasize more on its strategic processes that promotes the used and non-counterfeit products through its auction sites. This would prove to be valuable for eBay as the demand for the pre-owned items is escalating and have become a part of the fashion. References Bateman, T. S., & Snell, S. (2010). Management: Leading & Collaborating in the Competitive World. McGraw-Hill. eBay. (2009). "EBay 2008 annual report." File.shareholder.com. Retrieved on October 10, 2011: http://files.shareholder.com/downloads/eBay/765967544x0x281367/1b773a7c-8c14-45b8-915a-1716ca37dda0/eBay_2008AR.pdf Holden, G. (2004). The Collector's Guide to EBay. McGraw-Hill Prof Med/Tech. Liquori, T. & Benjamin, D. & Barbu, A. (2009). “eBay.com Core Strategies.” Comparison of eBay.com and Alibaba.com. Retrieved on October 10, 2010: http://www.scribd.com/doc/51748035/9/EBAY-COM-CORE-STRATEGIES Robbins, A. (2010). Management, 10 /e (New Edition). Pearson Education India. Prince, D. L. (2007). How to Sell Anything on Ebay... and Make a Fortune! McGraw-Hill Professional. Weber, S. (2008). Ebay 101: Selling on Ebay for Part-Time or Full-Time Income, Beginner to Powerseller in 90 Days. Stephen Weber. Read More