eBags strategy model consists of an internet website that is designed to bring the customer closer to the manufacturer. eBags does that by providing a wide array of quality brand name products to their website. This website gave the people a larger selection than they would get in a storefront and eliminated the travel expenses. They designed a user friendly website that allows the customer to search for products with small details such as type, brand, size, and price. eBags has been able to build a good relationship with over 300 suppliers and has increased their Stock Keeping Units (SKU) to over 15,000 which contributes to its success. They have been able to minimize the high inventory holding cost by implementing a drop-ship model. This model has its issues though as they can not always control the shipping schedule and it has a lower profit margin. Part of eBags success is due to their transparent relationship with their vendors. They created a system called the eBags Partner Network (EPN) that allows vendors to update their SKU’s in real time. It also allows the vendors access to a scorecard system that allows them to track their own sales, returns, and ratings. eBags knows that in order to continue to see the same growth they have been experiencing they have to expand their products. They are attempting to gain a foothold in the footwear industry using the same strategy they used in the luggage industry. eBags is also trying to start a European branch to their website. This would cater to a market that currently consist of only modest shops with limited operating hours. eBags is still developing their strategy model today as they decide whether to sell other products and whether they should branch out of the United States.
Schroeder, R., Goldstein, S., & Rungtusanatham, M. (2011). Operations management: Contemporary concepts and cases. (5th ed., pp. 507-515). New York, NY: McGraw-Hill/Irwin.
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