eBay’s Competitive Advantage: Combining Cost and Differentiation Advantages to Deliver Superior Value to Customers

Competitive advantage is the state in which an organization is able to deliver its goods and services to the consumers against their competitors in the market (Porter, M. E. 2004, pg 154). There are two main types of the competitive advantages; these are the cost advantages and the differentiation advantages. With this, different organization incorporates different competitive advantages into their system so as to enhance their level to sustain their competitors. In the eBay organization, their nature of competitive advantage has combined both the cost advantage and the differentiation advantage.

Differentiation advantage is whereby the organization is able to deliver their goods and services that exceed that delivered by their competitors. While the cost advantage is where by the company offer their services and goods at a lower price as compared to that offered by the competitors (Porter, M. E. 2004, pg 154). The competitors of the eBay comprise of the amazon. com and the yahoo internet corporations. Inn this, the organization have been able to deliver very superior value creation services and goods to their customers worldwide.

For the organization to attain all these, they have categorized their online auctions into three major parts in which they ensure that they offer the services required by the client in a unique way compared to that offered by their competitors. These categories consist of; business to business auctions, business to customers auctions and the person to person auctions. Within these categories, the organization has managed to attend to their needs better compared to that offered to them by their competitors. To enhance the use of the differentiation advantage over their competitors, eBay have incorporated entertainment in their services.

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This has been the main sell point of their services as many of their client go for their services because of the entertainment they get from them. This has been cleared attained by the use of the design school of which enables the organization to be able to consider the value of the external forces that influences their growth (Lamb, C. W. , Hair, J. F. & McDaniel, C. 2003, pp 36). This is also because by the fact that, the organization has continuously been in the transition of their services to maintain their top position in the market; this gives them the provision to conceptualize on their strategies in place.

SUSTAINABLE COMPETITIVE ADVANTAGE (E-BAY) Sustainable competitive advantage is only attained by an organization when their value making processes and arrangement have not been able to be replicated or reproduced by other companies of the same services (Porter, M. E. 2004, pg 154). This allows the organization to be unique in its own nature when compared with the rest of the competitors in the market. In this case, the eBay organization has attained the sustainable competitive advantage in the market. This is seen when they have continually seek new opportunities in changing condition within the market.

This is clearly seen when the organization wanted to facilitate the transaction of business for its buyers and seller in the year 1998, they had to adjust their system to such a manner that they could be able to offer the person to person mode of service. This allowed the organization to attain the need of every customer at their website. As the competition in the market increased, they began to seek for growth opportunities from the international markets to enable them create a global trading community.

By this time, there were no facilities created for that, so the organization began to stipulate for the ways in which they could be able to meet the needs of the community members (Wickham, P. A. 2006, pg 493). In this they came up with three main strategies that they used. In doing all these, they are trying to sustain their competitive advantage. They can also be justified to have attained the sustainable competitive advantage as the type of the goods and services that they offer can not be compared to the ones offered by their competitors (Jensen, B. 2000, pg103).

They are said to be competitively superior to the competitors as regard to their services, some of these superiority include; the eBay company assists buyers and sellers meeting, switching information and performing the operation, they allow the clients to circumvent traditional mediators and trade directly, thus reducing their cost, they provide their client with global services, wide variation and broader base of participants, the eBay company operates 24 hour in a day thus enabling their client to be attended to at any given time and lastly, they foster a sense of togetherness among the individuals with communal interest.

The capacity of the eBay company to be able to offer all the above list services to their client, have made it possible for them to be sustainable competitive advantageous over its competitor (Hill, C. W. L. & Gareth R. Jones, G. R. 2006, pg 191). This is because; the competitors have in the long run been unable to attain their standard.

Some of the competitor’s limitations specialized in includes; they offered limited variety of the services, they mode of charges on their clients are too high and then they tend to have less information for the clients concerning their services and goods. Through these limitations, the eBay company strengthened its services to be the hero in the market.

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