Working as a consultant, you have been asked to create an IDEF3 process model based on eBay.com’s hybrid retail and auction business model.
To provide a holistic view of its operations, you have been asked to assess whether its current processes adhere to its business rules and vision. To fulfil this task, you should use the three-layered business process modelling framework and fill out information for the business, logical and application layers. You should include information such as eBay’s business, operational and system requirements. You should also create an IDEF3 process model for the Logical Layer.
Following the same style as provided in the case study during the lecture, you could then create your own case study for eBay.com based on its hybrid retail and auction business model. You should provide sufficient details for each of the three modelling layers; clearly stating your assumptions, especially in the business layer. For any business related information, you are encouraged to carry out your own research on eBay’s business vision, operations and strategies.
Customer Searches through Product List
The IDEF3 process model is used for describing the operations a system carries out. This model is particularly utilized for capturing the constraints of the system along with the temporal relationship and resources of the system. The E-commerce is the concept of selling goods or services to other business or customer through electronic transaction. B2C or business to customer is one of the most popular e-commerce model that is used by eBay. The organization also include the customer to customer or C2C e-commerce model where a customer of eBay provide services or sells goods to another customer.
The study includes the description of the business layer, logical layer and application layer of the eBay business process. This layers are created following the standard procedure of the IDEF3 process model. The diagrams and the contents of the diagrams has been properly elaborated in the study. The processes of eBay has been properly discussed and analyzed to understand the underline architecture of the study. The application layer is created based on the logical and the logical layer is created using the business layer. Therefore, it is crucial to maintain the connection between the layers of eBay business process models.
The organization was founded in the 1995 by Pierre Omidyar. Today it is one of the biggest e-commerce organization in the whole world. The organization makes its revenues from marketplace, advertising business, branding solutions, and subsidiaries. The eBay market place is one of the most popular online trading platform. It has digitized the business to people and people to people trading as well as provide a good platform to sell products on an e-commerce platform. The introduction of the eBay Top Rated Seller Program, SafeHarbor Program, Feedback Forum by the eBay has been a great way of moving business to the next level of e-commerce and increase competition in the market. Three kinds of ‘by it now’ methods are used by the organization to sell products. The consumer can select Auction-style listings, Reserve price auctions or Buy It Now without bidding. In the first, Auction-style listings, that is associated with by it now option, the consumer can purchase the products directly or bid in the auction. The difference in the by it now and auction prices is thirty percent more charge. Only after the reserve price is met the Reserve price auctions with a Buy It Now option is visible to the consumer. In the last scenario, eBay fix a price of the product and the consumer buys the product for that price.
Customer Place Order
The eBay store is the electronic store where the consumers can sell their products to another consumers. Various eBay entrepreneurs have chosen the business model of the eBay store so that they can determine the profit from each product. The organization charge commission to the sellers who are trading through eBay platform. These charges are based on the products that are to be sold and the prices of the products. The charges are starting from 3.5% to maximum 10%. The organization is also exercising its business in wholesaling. In this model, the sales are made in bulk. This model is concentrated on selling the products to the other business owners of the organization in terms of whole sale. The sale of the product may be higher in this case but the profit is less than individual sales. This also allows the organization to fasten the process of selling products as having thousand different auction for selling thousand products is mode time consuming than a single auction for thousand products.
The extensive use of the internet in present days has provided the customer so many opportunities of buying products than ever before. Hybrid Retail Business Model is considered to be the model through which the organization sells the products of other organizations or customers to the customers of eBay. This suggest that Hybrid Retail Business Model is both the business to business and consumer to consumer models. Integrating the physical and e-commerce store is another part of the Hybrid Retail Business Model. In case of eBay the later can idea be rejected as this organization does not have any physical store.
Customer Searches through Product List: The customer of eBay searches the products that he/she intends to buy from the list of products in the website. It is marked as A1 as it is the first process of buying a product.
Customer Place Order: After the product search is complete, the customer place the order. The order can be consist of various products. The minimum number of process to order is one. Therefore, the customer has to choose at least a single product to create an order. It is marked as A2 as it is the second phase in the process.
System Evaluate Order: The system is required to analyze whether the customer is liable to make the purchase. Such as based on the provided address or other information saved in the database. If the order is not validated successfully then the customer order will be rejected. If the order is valid then the customer will be allowed to checkout.
System Evaluate Order
Checkout Information: The checkout information are like address to where the order will be delivered, the payment method selection. The customer can change the address every time he/she makes an order or same place can be used to deliver order every time. This solely depends on the customer. Without a valid address, the order cannot be confirmed. The customer will provide the contact number so that order can be delivered correctly.
Inform Seller: The seller/inventory of eBay will be informed of the purchase. This information will include the name, address and contact number of the seller.
Confirm Payment: The payment is confirmed based on the method of payment. If cash on delivery is selected then the customer will pay to the delivery man otherwise the payment has to be done at the time of placing the order. The product will be handed over to the customer only after successful delivery of payment.
Ship Product: The product will be shipped to the customer through courier service providers.
Purchase Finished: At last the consumer purchase will be completed. If all the process is followed properly then the order will be successful otherwise the order will be rejected.
Customer Access eBay website: In order to make the purchase, the customer needs to access the eBay website. The website will have different URL for different countries.
Customer Login to System: Customer can login to the system during the product search process. In order to login the registration is importance. In the logical layer, it is assumed that the customer who is logging in is already registered.
Customer access as guest: The customer can also search through the products as a guest without logging into the system. The guest data will not be later visible to the customer.
Customer Add products to cart: This is the final logical process of the search through product business process. The customer will add the products that are to be bought into the cart one by one. Based on the cart details the order will be generated.
Auction: The customer can purchase the products through auction. The customer will enter bid and the highest bid will purchase the product.
Reserve price auctions: It is another process of buying the product. Only after the reserve price is met the Reserve price auctions with a Buy It Now option is visible to the consumer
Buy it now: In this option, eBay fix the price of the product.
Inform Seller: If the product is sold by another customer then the details of order will be sent to the seller. The information will contain all name of product quantity, name of purchaser and other details.
Inform Inventory: If the product is sold by eBay, the system sends the information to the inventory. The information will contain all name of product quantity, name of purchaser and other details.
Seller Check Stock: The seller will check the stock to ensure the product is available.
Instant Payment: The customer will pay at the time of placing order.
Cash on Delivery: The cash on delivery is the method of paying the price at the time of receiving the product.
The diagram shows that the user can register and then login to the system or can just login. The user can also search the site as a guest. In case of auction, the bidding will be analyzed and the highest bidder will purchase the product. The customer will deposit the reserve price then only the purchase option will be shown. In case of buy it now, the customer will buy the product for a fixed price. The customer can purchase the auctioned product by paying additional 3.5 to 10% money. At the time of evaluating the order, the system will check the pin code and price of the product. The customer will checkout of the searching pages and then redirected to the check-out page. In this section the user can either login or buy as a guest. In case the user login, the customer can add new address and contact details or can use previous one. In case of guest, for each order, the address and other contact details will be provided. The seller or inventory will match the order placed with the one that they have received to ensure proper delivery. They will load the order and then deliver it to the customer. In case of cash on delivery, the payment will be received during delivery. This process has been shown in the Figure 3’s A8-3. In case of instant payment, the customer will enter the account number or card number and then the one time password. The delivery will be finally finished after all the processes are followed perfectly.
The above study concludes that the business process of eBay is similar to most of the worldwide e-commerce organizations and also include some additional features. The business process is consumer centric. The business model has a great impact on the business of the eBay. The consumers provide feedbacks on the products that the organization sell. These feedbacks are a great source of prioritizing the product quality and ensures sales. The business is required to put more light on the consumer feedbacks on services that are at the core of the business. The hybrid market place models is serving as a great way for the merchants and sellers to sell the products online to the consumers. At present, various retail organizations are making the hybrid market place models their core business model to pull more consumers. The advancement in the internet usage has increased the capability of the e-commerce organizations like eBay to catch the eye of the potential customers. However, this has allowed the small retailers to reach new customers and increase its customer base. The competition in the market is continuously increasing. The consumers are looking for more offers and quality products from the e-commerce organizations. The organization like Amazon is making significant advancement in the enhancement of the customer base by providing exiting offers to the customers.
eBay must be able to regenerate its business process so that it can make its present customers loyal and attract its potential consumer. The core business model of eBay is old and does not show any advancement made in the recent years. The profit form the C2C model is also low than other organizations. The main changes are needed in the application layer that describes the process in detail. E-commerce models have to changing from time to time so that proper strategies can be adopted.
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