Making Ebay Work

Topics: Strategic management, EBay, Management Pages: 16 (4430 words) Published: April 20, 2010
Table of Contents
PART A: Chapter Summary3
PART B: Background and Case summary5
EBay’s Background5
Case Summary: Making eBay work6
PART C: Case Questions7
Case Question #1:7
Case Question #2:10
Case Question #310
PART D: Implications and Recommendation12


Strategic capabilities have become a source of competitive advantage for both small and large organization. Organizations that wish to survive and compete in today’s dynamic business world need to implement unique and high-value strategic capabilities. This paper takes you through in depth analysis of strategic capabilities and how it relates to the business environment. The organization in focus is eBay, an online sales company. EBay is one of the largest online sales and auction company with branches in over two dozen countries. Its unique resources and key competences are paramount to its ever-growing success in the industry.

The first part of this paper will take you through the concept of strategic capability. This is the summary of the chapter 3 from the textbook, Exploring Corporate Strategy. This part will focus on definition of strategic capability, the importance of resources and competencies to achieving strategic capabilities, cost efficiency, and how strategic capabilities can lead to sustainable development. The second part focuses on the background of the case study company, eBay. There is a brief background about the company and summary of the case study.

Part three seeks to answer the case questions. The questions are divided into three; the first talking about the analytical framework for analyzing eBay’s strategic capability. There are several analytical frameworks in the textbook, for in-depth and better understanding, the SWOT analysis was used. The second question seeks to know what kind of capabilities have provided eBay with competitive advantage. The last questions deals with managing capabilities such as new resources, investing and divesting in resources, and extending resources given new entrants in the marketplace and the changing nature of eBay. Each question has been answered by expert individuals with good knowledge of strategic capabilities.

The paper concludes by taking into consideration possible lessons learnt from the chapter and case study. We also give recommendations for development in eBay or other organizations that seek to achieve the feat of successful organizations like eBay.

PART A: Chapter Summary

Strategic capability can be defined as the adequacy and suitability of the resources and competencies of an organization for it to survive, prosper and deliver in the future. The strategic capability contributes to the competitive advantage of an organization by creating and implementing strategies that competitors find difficult to imitate or match. Unique and rare strategic capabilities give organizations better reputation and goodwill when compared with their competitors.

Importance of resources, competences, core competences and dynamic capabilities:

An organization’s strategic capabilities mainly revolve around its resources. The resources are either tangible or intangible and they are grouped into four categories; an organization’s resources can be: Physical, Financial, Human, and intellectual. Physical resources include machines, building or production capacity of the organization. Financial resources are used in the day to day running of the business; they include capital, cash, debtors, creditors among others.

Human resource includes the number and mix of people in an organization. Most organizations have human resource departments that help manage the welfare of the personnel in the organization. Intellectual resources are intangible resources that include patents, brands, business system, and customer database. Resources are important to an organization because they allow the organization to...

Bibliography: Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy. Essex: Prentice Hall.
SWOT Analysis: Lesson. (2008, February 12). Retrieved March 23, 2009, from Strength, Weaknesses, Opportunities and Threats (SWOT):
Supply cost
Product/process design
Economies of Scale
Cost Efficiency
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