Strategic Information Technology Management - Essay Example

?Strategic Information Technology Management Table of Contents Table of Contents 2 Introduction 3 About Ebay.com 3 Information Communication Technology implementation 4 Internet trends 5 Ebay.com new and old ways of strategic 7 Conclusion and Recommendation 9 Reference 13 Introduction With the invention of technologies and new form of information management techniques global market is constantly changing their business process and operation and there is always a gradual advancement in every sector of the organization. Ebay.com being a technology based company constantly implements these strategies to grow in their business and always working hard to meet the customer demand. Implementing these strategies not only gives the customer a user friendly environment but technological implementation also helps to ease the business process to great extent and help to cope different critical situations faced by the company in long-run. This report is mainly based on Ebay.com who are constantly changing their strategies and everyday implementing new business processes for an easy user friendly customer oriented approach. About Ebay.com EBay.com is one of the popular online market place which not only operates locally but also national and internationally. The main carriers of eBay business are individuals and also small and medium business organizations. EBay mainly provides a platform for sellers and buyers to meet and trade of for their millions of items everyday 24X7. The auctioning technique was first generated in the mind of the Pierre Omidyar’s wife who wanted to trade with other collectors of Pez dispensers over the communication medium i.e. internet. Pierre implemented the idea to create an online market place so that people can trade off their goods at any part of the world. Everyone has the ability to access the different items available and can compete with the other sellers. Omidyar self-coded the website in the year 1995 and launched it as the auction site and by the year end it achieved a great popularity with the concept of internet marketing new to the market. The market place was never before like this for the customer. They can access the various items of the different sellers and can avail the best price sitting at any part of the world. Giving a user-friendly experience to the customer with trusting environment was the main objective of the company. From the very beginning the company started earning profit. In the year 1998 eBay was declared public with $18 per share and in the very next year 1999 eBay share was traded at b$282 a share. Soon it became the most valuable retailer over internet and even surpassed the giant like Amazon.com in respect of market capitalization. The core business functionality of the company mainly depends on trust and faith which the company always look very seriously and deal each people as goods that drive the business. The honest environment and respect for everyone whether big or small business or an individual is very important for the firm to grow its reach to the customers. The sellers who are the pillars of the business are taken care of at every step. For long-term profitability, trust and loyalty are the core strategies for the market development. The idea of internet auction platform even facilitated the process of e-commerce which helps trade people to trade on anything available in the market. The efficient and effective transaction process of eBay helped a lot to grab the market for which people without any worry can buy and sell products online just by few clicks. The growing company continued its business expansion with more and more products and services and even entered into bidding of cars and real estate in recent years (Gopalkrishnan, Gupta, n.d. p. 1). Information Communication Technology implementation In the modern world of technology information and communication plays a great role in the business process in various ways. Amongst the various technological implementations the most prominent role is played by the concept of e-commerce in the modern trend in business. Through the E-commerce process the people buy and sell products over the internet or any other computer network. Though e-commerce process is vast but often it is related to the transaction process only in the commerce. Thus the concept of e-business arises which describes the whole operation including the e-commerce process within it. E-commerce transaction can be carried out between several parties like it can be between business-to-business, business-to-customers, consumer-to-business, consumer-to-consumer, government-to-consumers, or can also be carried out through mobile i.e. mobile commerce. Another form of E-commerce technique is auctions between the sellers and the buyers (Morley, Parker, 2010, p. 439). People place competitive bidding prices and the products are sold which need quick sale or need to liquidate. This is modern trend in e-commerce business process which is followed by several companies like Ebay.com, the world’s largest auction site and one of the profitable implementation of e-businesses in the world. The business process of Ebay.com is mainly based in customer-to-customer relation. The customer sell goods and products to another customer through the process of auction where every people can participate over the internet and bid on different items which they wish to buy and the whole process is carried out over secured internet network without any human intervention in the process. The business is carried out 24X7 worldwide and people can place and receive order anytime sitting anywhere in the world (Standard & Poor’s, 2005, p. 307). But with this technological support companies need to improve other managerial aspects also to facilitate the business process and meet the customer demands. Internet trends Online marketing and business process implementation are growing at a very fast pace. Companies like EBay, Amazon take this opportunity to be the middle man and gain profit from the buyer and the seller in the auction or selling process. The growth rate of Customer-to-customer ecommerce is rising but on the other hand the Business-to-customer growth rate are going down due to the effect of the online advertisements which are acting as threats for the company to sell new products to the customers over the internet. The online business process also depends on age group which is mainly targeted towards the age group of 20-30 for online auction and purchase of goods. (Source: Takahashi, 2009, p. 6) The ecommerce trend in different financial years at Japan is given below according to the National Consumer Affairs Centre. (Source: Source: Takahashi, 2009, p. 9) Ebay.com new and old ways of strategic EBay pursue a differential strategy along with the cost leadership and the growth strategy. The impressive online security service from eBay with thousands of employees was the most distinctive feature of ebay.com as a differentiation strategy. The peer review technique is also another quality control issue which helps people to know about the quality of the service provided by ebay.com. The whole transaction process of Ebay.com is carried out through secured network and the transaction process can be tracked at any point of time by the customers by logging in the private network provided by the system. The status of the order is also tracked by the system and the shipment status can be seen. The customer feedback is taken in the process and any problems regarding the issues can be tracked by the company to improve the level of service for the customer satisfaction. The ability to alliance with different companies gives a great advantage for eBay to be the cost leader of the market. The company as links with different suppliers which helps to reduce the price of the company’s items and provide service at a very low cost than the market provides. Another strategy of eBay remarkably help the company to survive in the competitive environment is the growth strategy which the company constantly works in to fight with several rivals like Amazon.com and others in the same race. The growth in terms of items, expansion and methodology are changing everyday at eBay. The company merge with different companies and online retailer to grab their market as well as expand their own market. Being simple with all the application and the variety of products eBay has a great advantage over the others to be the market leader with its innovative approach. The M-commerce technique gives the company the ability to connect with the customers at any point of time and the growing communication technology with sophisticated devices like PDA’s and Mobile devices gives a great growth prospect for the companies to expand its customer base. The online verification technology against frauds and hackers are very important in the process which eBay handles very effectively. The trust of security for the sellers towards the company is the most important aspects for any online business carriers. Another aspect of the ebay.com is the Power Seller Model which is a very new concept implemented by eBay. At eBay.com there is a secret place for the most potential sellers who get several benefits from the site through its different technologies. The quality sellers at eBay gets premium supports from the company and also it gives the customer the best buying experience. The sellers are provided with rewards from time to time to facilitate their interest on the site and build a better relation with eBay. Various benefits like increase the visibility of the items which are best matched with searches, providing discount on the final fees, giving heath care support to the power sellers, protection of unpaid items and selling large quantities of liquidated and also wholesale merchandise items to the power sellers (Collier, 2009, p. 710). But on the other hand the change in eBay’s strategies didn’t always turn out successful in every respect. EBay is popular for the auction process of selling goods but with the switching of customers from eBay towards other online site like Amazon.com and other online retailers forced eBay to restructure its strategies and introduce its new fixed price retail service to the customers. But this new fixed-price service didn’t worked out well for eBay.com as customers are not getting a user friendly environment for shopping through shopping.com, the child site of eBay.com for fixed price items (Sinclair, 2007, p. 189). EBay was so concentrated towards its new strategic implementation that the company loses its share on the main ground and result a rise in traffic for the rivalry like Amazon.com. The buy-it-now technique was not very easy for all the sellers of the site. The auction process of items gone down and people were more concentrating on fixed-price method but with the complication of the process customers are more user-friendly with the rival’s website. Thus after recognizing the problems in the process of strategies eBay revert back to their old strategies and it became a new one for the company to gain its market share again. The company again concentrated on their auction commerce and implemented their technological advancements towards their core areas of business in a more sophisticated way and greater user satisfaction. Conclusion and Recommendation The online retail giant eBay.com with its diversified items and technological advancement gives a great prospect for the company for the growth in e-commerce industry. E-commerce offers a great growth rate for any company than any other traditional way of businesses. EBay took this opportunity to grow by using its enhanced e-commerce based business and its electronic data interchange technique for secured transaction for the customers. Trust and loyalty being the key drivers in this kind of business eBay identified this factor and improved their services in the key areas of security and development of logistic system. The consumer review system gives the company the ability to know the consumers problems and the recommendation for a better service from the company. The operational process of delivery and customer support is also a key feature of eBay for gaining popularity amongst its rivals. With this growth in auction industry with the new technique over internet the company also need to improve at certain areas for a better service for the customers and gain its market share again from rivals like Amazon.com. The company tried to focus on non-core areas of business like fixed-price product sale which eBay need to develop in a better way to compete with the market. The fixed-price methods of Amazon.com are much improved than that of eBay which results to the fall in the auction share of eBay. EBay concentration should also be towards its core business processes than moving towards the secondary processes. The eBay fixed rice site need to drive the traffic back to the auction site for better user friendly online experience so that people don’t go out of track for other sites resulting a loss in business for the company. EBay also need to improve their value added services and should also take care that these services do not distract the customers from availing the core services from the company. Though the non-core services like then Skype Me application within eBay.com gives great help to the customers to contact directly with the sellers or the advisers via their Sky number registered to them and could build a strong relationship and exchange information between them but this process incurs huge investment for the company to maintain the service. The Skype application gives better connectivity across countries than a traditional way of calling over telephone. The VoIP as expected would grow around 20-fold by the year 2009 should provide a better Skype management in coming years. But this incorporation of Skype Application within eBay.com would involve a huge investment of $1.3bn in cash and around $1.3bn in shares which according to many observers is quiet expensive for a firm with moderate revenues. If eBay develop their own VoIP software then it would have been much more cost effective for the firm. On the other hand incorporating third party application is more risky than using it own for the firm (Haberberg & Rieple, 2008, p. 224).The financial benefits from the non-core areas can be invested towards the core business areas like action site for the development process and it can grow technologically and strategically at the same time. The third strategy for recommendation should be its expansion strategy at China. Ebay.com is mainly concentrated at United States. But the Chinese expansion strategy needs to be evaluated by the company to get a better customer base and expand overseas. The Chinese market is not very familiar with the transaction system of eBay who follows PayPal transaction process for the business process. China Pay system is more acceptable for the Chinese market which should be adapted by the company to ain profit in that particular market. Apart from high internet access cost technological advancement at China is not a problem for the company to implement the customized transaction process but the strategies need to be evaluated by the company to reach and being more loyal to the customers and the sellers (Ireland, Hoskisson, Hitt, 2008, p. 83). With proper market research and advertisement the company need to make people aware about the secured network transaction process and enhance the their beneficial services which are targeted towards the online Chinese market. The recommendation for the company’s global success is needed to be carried out all together to give customer a better buying experience. The company need to concentrate on the auction site and give people of China their own way of transaction and also the company need to eliminate the non-core business processes to invest to their core areas. For better customer service the company need to understand people in a better way by conducting researches and reviews through feedback system. EBay also need to merge with different sellers at different parts of the world where the company couldn’t reach due to poor logistic system. Logistics plays an important role in the whole transaction process. EBay need to develop a very strong distribution system for a smooth and effective transfer of goods from the seller to the buyers. The company can build a better relation with the sellers and provide with the best price amongst the rivals which can act as the major driver of profit for the company. The company also need to diversify its items and services so that people can get anything under one platform and don’t feel to move out of the site and also the whole process should be very user friendly. All the different services should be linked to the single site so that customers can find the alternatives within the site. This process will not only keep the traffic within the company’s domain but also will increase the sale for its different segment of businesses. The challenge of eBay is to expand into new categories of services but without leaving its core business areas (Anderson & Vincze, 2006, p. 112). Customer being the major drivers for the business, eBay needs to take care of every step of the customers which they face while surfing the site. EBay need to understand the business process of its rivals and act according to their strategies and implementations (Dickson, Nourazi, Li, 2009, p.61). Reference 1. Anderson & Vincze, (2006). Strategic Marketing (2Nd Ed.). 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