Business Model: Amazon versus eBay Essay

A alliances business concern mildew is the activities it uses to create and capture value through its offerings to the mart. Modelling helps firms breach business visions and st identifygies, redesign and align business operations, sh be knowledge nigh the business and its vision and ensure the acceptance of business decisions through committing stakeholders to the decisions do (Persson & Stirna , 2001). amazon and eBay both share space in the retail exertion of e-retail and e-commerce services. The two companies have found succeeder by conducting business apply the internet by providing products, services, and information to consumers. Although, B2C (business to customer) strategies have helped both companies to achieve success they have sustained and dominated the market through evolving business toughies that capitalise on value creation to the consumer. eBays business model is ground on creating an online trading community where the company provides an auctioning pl atform that brings dish outers and buyers together. Thousands of items are listed in catalog form according to topic and category. eBay at no beat takes possession of any item which leaves shipping costs details amidst the buyer and vender. However, it does offer secure payment methods loose of charge.On the some other hand, Amazon incorporates a long tail retail business model which assumes that products that are in get-go demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current best marketers and blockbusters, moreover totally if the store or distribution channel is large passable (Investopedia, 2014). By offering a large variety of products on its sites for sell inventory is kept in what the company barriers as goal centers. Whereas when merchandise is selected and paid for through Amazons e-commerce site it is shipped free or at little cost to the buyer. The value creation does not end once the exchang es of goods have interpreted place for both eBay and Amazon they have extended the transaction process by incorporating recompensedback forums. For example eBay depends on the integrity of others in making person to person ethical minutes there is a feedback forum where the seller and buyer can newsmonger on the process. Amazon in turn has created customer value and truth by offering a comment section where buyers can rate experience on a star system, and provide reviews.The seller is bring in by Amazon using ametric system establish on number of reviews and ratings in percentages telling how much positive feedback a seller has received in a specific time. heavily and leverages its unbending assets to and On the other hand, Amazon beginning as an online book seller utilizing B2C strategy quickly redefined its retail strategy to include large varieties of products that are stored in what it The company in compensation charges listing fees or presentation fee to promote the pro duct, and a final sales price fee of 7.9% once the final bid is accepted. Through these activities eBay creates value to the consumer by providing a vast listing of items for sale in one location, ease of use, and guarantor in financial payment methods. Although, eBays business model is built around its core competencies of on-line person to person auctioning Amazon has taken a more innovative approach by redefining its business model and creating entirely new markets. Amazon beginning as an online book seller utilizing B2C strategy quickly redefined its retail strategy to include large varieties of products. term incorporating a long tail retail business model which assumes that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, but only if the store or distribution channel is large enough (Investopedia, 2014). thence Amazon dumps short term profits for l ong term investments often making the company appear not profitable in its financial statements. Amazon through business model innovation (BMI) evolves by thinking long term continues to fill the white space by focusing and then capitalizing on the unmet needs of consumers. The company since inception in 1995 Amazon started off by focusing on Business-to-Consumer relationships in the midst of itself and its customers, and Business-to-Business relationships between itself and its suppliers but it then moved to incorporate Customer-to-Business transactions as it completed the value of customer reviews as part of the product descriptions. t is when an online company earns its revenues mainly by selling a broad selection of products.