Analyzing Managerial Decisions eBay.com
Saint Leo University
MBA 540
Case Study
Summary
eBay is one of the world’s largest online auction websites (Brinkley, Smith& Zim-merman pg. 350). With operations in 39 countries and millions of users worldwide, eBay successfully managed 59 billion dollars worth of items. This is because of us-ers, bidders, and sellers who pay a fee to sell their goods and in return pays a small fee (Brinkley, Smith& Zimmerman pg. 350). Ebay incorporates a feedback forum and also uses PayPal as their pay source. Questions below are answered as to how eBay creates value, what are the potential contracting problems exist at eBay, what are the costs, and the issues regarding fraud misuse of the system …show more content…
Through legal paperwork eBay should be responsible for returning any fraudulent transactions and protect illegal products from happening. Another issue eBay should look into would be their shipping standardizations. They should incor-porate some type of logistics in order to increase its revenue and shipping stand-ards. This can also create economic value for eBay in the long term. Another idea for eBay is to have some type of written contract with specific banking institutions in order to have accurate processes with the financial transactions. For example, DHL is in partnership with Amazon, and it is required by them to close customers ac-count with the released of information in order to let others know of the illegal ac-tivities. What are the contracting costs at eBay?
According to (Brickley, Smith & Zimmerman 2016), the contracting cost at eBay can include enforcement costs, drafting, information costs decision costs and bargaining cost. For example, one type of cost eBay uses is contracting cost, which in turn search the cost of products. This also includes advertisement cost.
EBay claims that it has only a small problem with fraud and misuse of the system. Does this imply that it is overinvesting in addressing potential contracting prob-lems?
Saint Leo University
MBA 540
Case Study
Summary
eBay is one of the world’s largest online auction websites (Brinkley, Smith& Zim-merman pg. 350). With operations in 39 countries and millions of users worldwide, eBay successfully managed 59 billion dollars worth of items. This is because of us-ers, bidders, and sellers who pay a fee to sell their goods and in return pays a small fee (Brinkley, Smith& Zimmerman pg. 350). Ebay incorporates a feedback forum and also uses PayPal as their pay source. Questions below are answered as to how eBay creates value, what are the potential contracting problems exist at eBay, what are the costs, and the issues regarding fraud misuse of the system …show more content…
Through legal paperwork eBay should be responsible for returning any fraudulent transactions and protect illegal products from happening. Another issue eBay should look into would be their shipping standardizations. They should incor-porate some type of logistics in order to increase its revenue and shipping stand-ards. This can also create economic value for eBay in the long term. Another idea for eBay is to have some type of written contract with specific banking institutions in order to have accurate processes with the financial transactions. For example, DHL is in partnership with Amazon, and it is required by them to close customers ac-count with the released of information in order to let others know of the illegal ac-tivities. What are the contracting costs at eBay?
According to (Brickley, Smith & Zimmerman 2016), the contracting cost at eBay can include enforcement costs, drafting, information costs decision costs and bargaining cost. For example, one type of cost eBay uses is contracting cost, which in turn search the cost of products. This also includes advertisement cost.
EBay claims that it has only a small problem with fraud and misuse of the system. Does this imply that it is overinvesting in addressing potential contracting prob-lems?