Best Approach to Business
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Microsoft and e-bay are one of the e-commerce business ventures on the internet. Microsoft is the largest revenue maker in software products while eBay is equally leading market place website that generates profits from product sales; it's a system where bids are placed on the website. However, the seller pays a fee to eBay to list the items to be sold, and this is how eBay generates its revenue.
Microsoft's software products, run; the servers operating system, personal computers, internet search, video games, mobile phones development tools for software and certain hardware such as; Xbox 360 and zune. It majorly generate billions of revenue every year selling these products and no wonder the founders of Microsoft Bill Gates, is one of the worlds most richest. The products of Microsoft are categorized in five parts of business dealings; windows, Microsoft business, Entertainment, devices, servers and tools. In most cases, the business approach to Microsoft is selling licenses to the users of the software.
This is an appropriate business line I would advice any investor to venture into, but the costs involved are way too high, therefore, not really the best option. However, most businesses in the world need this software for the functionality of their organization hence, Microsoft chose a highly revenue generating business venture. According to the Microsoft data base, it reported revenue of $62.5 billion and a net income of $18.8 billion in the financial year 2010.
Microsoft's major competitors are the apple and the oracle, Google internet services, Sony and Nintendo. Even though they pose a great threat to the revenues of Microsoft, Microsoft deals in various lines while these competitors deal with only single line, for instance Google deals with internet search, Sony and Nintendo deals with game devices while apple and oracle deals with only operating systems, well Microsoft has all these services and products combined hence creating a larger revenue pool arising from economies of scale.
In trying to compete with Google Microsoft has partnered with yahoo in provision of search engine referred to as Bing and this brings in a slight profit which is better than Google having the whole share of the market to itself.
eBay business model is quite different from Microsoft; it generates revenue from sellers who would like to sale their products via their website. It has developed a very influential platform for selling goods and services by several businesses and individual. On just a single day, millions of items of thousand forms are exchanged on the site as well as Half.com site an affiliate of eBay that sales its products on fixed basis. EBay allows transactions locally nationally and even worldwide.
eBay has expanded and advanced the existing item divisions by introducing category specific boards and social rooms which would integrate category specific content. According to Yale university information on eBay, various ranges of products are introduced on eBay which facilitate site trade that comprise of payment services, authentication, vehicle inspection, appraisal and shipping services, this now gives it a greater number of customers because a customer could find so many services on a single website and use one mode of payment via PayPal. EBay also has made more efforts of conceptualizing its clients as a united community rather than mere customers. Major businesses have come into auction there products and services and a business could really grow if it could set up its shop on the site.
To make it more effective credit card is not needed when making transaction because there is a direct link between PayPal and the bank account of the client, therefore, there is quick and safe payments when transacting via the website. The specialized market on the eBay site gives it an advantage over their competitors.
Most online enterprises require that the client provide his or her credit card which to some extent can scare off customers because of the increasing cases of fraudsters, the security of the credit card is not fully guaranteed hence the idea of PayPal makes it safer and trusted payment method. Customers prefer using this method which gives eBay a great number of buyers worldwide. For instance, eBay motors are one of the leading traders of used cars in the whole world with great sales in Germany and the UK. This is an ideal business model that can be profit generating with little costs involved.
For any business to grow it should operate on a business model that works to generate more revenue the operating cost should be minimized effectively with the aim on maximizing on the profits. Though Microsoft has the huge income, the costs involved in the business are huge in terms of the required technology and the professionalism needed. Very few individuals would choose to invest huge amounts in a business such as Microsoft, eBay needs less professionalism and technology involved, while setting up the website, costs involved are average.
The higher the demand of a product means the rise in the number of sellers wanting to sell such a product and eBay would be the appropriate market place where one can buy or sell anything from any place in the world as long as they have a PayPal account and eBay will provide the shipping services and inspection services. The more the transactions, the more the fee charged by eBay and the more the profits.
Browsing for the listed items is absolutely free but there are two kinds of fee that is charged on the site; the fee is charged for promotion of the listed item in that it is highlighted in bold and final charge is made at the closing of the auction, the fee will range from1.25% to 5% of the final selling price. eBay will inform the seller through email whether the bid has exceeded the minimum cost price as quoted by the seller. The seller eventual settles their transaction independent of eBay allows one-on-one dealing between the seller and the winning bidder. The contract is binding between the seller and the actual buyer
Companies dealing with mortgages would highly be profitable if it would use such sites like eBay to sell off homes, they would boost their revenues by bringing sellers and buyers of houses together, this would be more appropriate for fast transactions, buyers would obtain homes exactly where they prefer, and sellers could be selling off their homes fast.
The concept of dynamic pricing will be applicable because the customer will pay the amount that he or she thinks the home is worth. The buyer who thinks the home could be more valued and is willing to pay would benefit the seller with higher profits and hence the seller would register higher income. The buyers would also be able to get best homes than they could have gotten on traditional means and, therefore, chances of getting high quality homes would be certain and he or she would pay what he thinks is worth the mortgage.
Some homes are built on strategic places such as around the beach and because of the environment the customer will highly value the home and, therefore, bid a higher price for the home or some houses could be built with an attractive stylish design that could deeply captivate the customer and in the same manner quote a higher value for the house. In addition to the applicability some houses would be bid just for conveniences of the customer, therefore, the customers would quote a lower price, if this price is still profitable to the company and the company wants to get rid of the mortgage, it will still sell the house, or the customers can also be willing to purchase the mortgages at fixed prices according to their ability. Auctions will give the company a means to leverage the real value of their homes by getting to the interested customers directly in a cost efficient way.
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