Can Ebay Continue Growing Case Study

Situation eBay. com, “the world’s online marketplace”, is an online auction and shopping website in which people and business buy and sell a wide variety of goods and services worldwide. It is managed by eBay Inc, which is founded in 1995 by Pierre Omidyar. eBay’ mission was to provide a robust trading platform where practically anyone could trade anything. It was recognized as the largest and most popular person-to-person trading community on the Internet. eBay Case, 2006) eBay posted US $8. 7 billion in revenue with a net income at .

4 billion in 2009. eBay is experiencing a 15% year-over-year increase. eBay’s marketplaces also benefit from a noticeable growth in its international business market, which accounts for around 60% of its market revenue in the 4th quarter of 2009.

The marketplaces success comes from the strong growth of its fixed-priced format, the continuing success of its highest rated sellers, and double-digit growth in sold items. (eBay 2009 Financial Report, 2010) Whitman purposed that eBay community of users was the foundation of the company’s business model.

eBay Case, 2006) Customer service is substantial for e-commence business to survive and develop. The customer support organization in eBay was made up of two major units: general support, trust and safety. Most of the customer contacts were handled by the general support unit, and approximately 94% of customer service volume was email-based. Also, live chat and phone inquiries were growing. (eBay Case, 2006) To meet the inquiries of its customer base’s growth, eBay first hired remote contractors to respond customers’ emails.

Then, eBay deployed Kana technology to improve its efficiency of customer services and to raise the customer satisfactions.

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However, those initiatives still could not keep up with the demand of growing customer bases. Thus, eBay operated an outsourcing pilot program in 2002. (eBay Case, 2006) Complications Outsourcing increases the productivity and quality of eBay’s customer support. Based on these benefits that were brought by the outsourcing, eBay increased the email volume of customer service sent offshore, even phone volumes in 2003. Yet, it arises some issues.

One is the community reactions. More and more complaints from the community directed to the standardization of English, especially after outsourcing the phone volumes. These complaints refer to written English, accents, and language comprehensions. The other big concern is the customer relationship management. Customer support to PowerSellers and potential PowerSellers are not dedicated. eBay does not optimize its customer support to generate revenue. Besides that, eBay lacks of the talents who have rich experiences with outsourcing. Key Questions Should eBay continue to expand its outsourcing?

Which outsourcing model can balance a competitive cost for eBay and retain its community? Is BOT a good alternative for eBay? Solutions To stay abreast of the continuing growth customer base and achieving cost differentiation, eBay should continue to expand its outsourcing. However, BOT is too advanced to eBay. It could not address the issues that eBay has now. Near-shoring is a better choice rather than outsourcing to India and Philippines. Compared to the other models of off-shoring outsourcings, near-shoring is to outsource in a nearby country, which shares a broader with own country.

As for eBay, Canada, or some rural areas in both America and Canada are all good location choices. This first can solve the problems of language and culture issues as well as reduce the costs for eBay. Second, near-shoring is easier to manage. That ensures these outsourcing services can maintain the same standard with those services in the home country. Another alternative for eBay to optimize its customer support is to deploy CRM software. Customer relationship management is substantial to every company, especially to those e-commerce companies.

As I discussed above, community is the foundation of the business model of eBay. Being first-to-market in the e-commerce world is frequently a competitive advantage. (eBay Case, 2006) The application of CRM software helps eBay not only to better serve its existing customers, but to develop new customers. It improves the efficiency and effectiveness in selecting, segmenting the customers and serving them, especially for those potential PowerSellers. This helps eBay to optimize its customer support. Conclusion Outsourcing is considered as a visible way for eBay to reduce costs, scale the demand, and leverage its investment.

As for eBay, near-shoring will ground well in customer support, and CRM software will help to optimize the customer support.