This article discusses an online retailer (eBay.com) and a traditional physical retailer (The Home Depot). In comparing the two, the organizational structure of the retailers will be discussed, the management challenges facing the two reviewed and lastly suggestions are drawn to assist those wishing to embrace the online method of retailing as an alternative retailing method.
eBay: The eBay organizational structure places the CEO (John Donahoe) at the top followed by the chairman of the board (Pierre Omidyar) and the directors below them. There are six directors: William Ford, David Moffett, Richard Schlosberg, Thomas Tierney, Marc Andreessen, and Dawn Lepore. There are other officials who assist in the management of the business (eBay, 2011).
The Home Depot: The Home Depot is headed by a Chief Executive Officer who also doubles as the Chairman (Frank Blake). Below the CEO are the Senior Leadership Team and the Board of Directors. The senior leadership team consists of twenty two officials. The Board of Directors is made up of 10 officials (Home Deport, 2011). The organizational structures adopted by the eBay and Home Deport are almost similar.
There are many of management challenges that both eBay and Home Depot face. Some of these challenges are similar while others are not.
eBay: Regulations of Items sold and Competition
The greatest management challenge that eBay faces is regulating what to be sold through its system. There have been many attempts by clients to sell what is not allowed through the system. Human parts and lottery tickets are not allowed. Selling of wildlife animals is also not allowed in the site.
There are other many items which are illegal and are not allowed either in the site and include firearms, ammunitions among other illegal items. Others items such as trying to sell plots on the moon are also not allowed. The management needs to ensure that there is a thorough scrutiny of the items posted on the site as the items may draw the site into legal tussles with the law makers.
There is a need to ensure that the biddings taking place are only for those items allowed as this will help to reduce the chances of the site crashing. The second management challenge that eBay faces is competition from similar business ventures such as Taobao in China among many others.
Tough competition calls for more funds to be used to promote that site so that it can gain a favorable chance of gaining a wide market. There is a possibility that stringent competition may push some online retailers to engage in unethical strategies such hacking other sites or even accelerating traffic to a site with an aim of crashing it (eBay History, 2011).
Home Deport: Capital Requirement and Competition
Home deport equally faces many challenges. The main challenge which is typical of many traditional retail outlets is the capital required in its expansion. The retail being physical is capital intensive as it requires physical outlets. Acquiring physical outlets needs money and thus the expansion of the retail is tied to availability of capital.
Another challenge that Home Deport faces is tough competition from similar retailers both physical and online. The online retailers are particularly competitive as globalization and the World Wide Web are slowly connecting the globe such that one can get anything that he/she requires from anywhere in the globe. Home Deport also faces competition challenge when physically expanding to regions which are already occupied by other retailers.
Similarities and Differences of the Challenges
In as much as Home Deport and eBay are different, it can be argued that they are similar in some aspects. The two retailers face the same challenge of competition from partners in the same line of operation as well as from physical retailers for eBay and from online retailers for Home Deport.
The capital required to expand Home Deport can also be argued to apply for the case of eBay in the sense that if eBay has to expand it will have to upgrade its systems and site so as to avoid hacking, crashing of the site as well promote the site so as to expand its market. One challenge that is distinct to eBay and may not apply to Home Deport is that of the site being hacked.
Transitioning to Online Retail
Transitioning from a traditional physical retailer to be an online retailer is a current trend. A retailer transitioning from physical to being online should engage in this process in a stepwise manner.
There is a need to assess the resource available. There is a need to develop the best site possible and make it as efficient as possible taking into consideration this is entering into a market place with already established retailers.
There need to consult suppliers and carry out more research into the product specifications. One needs to give the perfect description of a product when selling it online. There is a need to consult ones bank about the arrangement so that one is aware of the expenses involved.
With the advent of the World Wide Web many businesses have adopted the online system of selling goods. Online retailers seem to be on an upward growth while the physical retail stores are absorbing the shock of losing the market to these stores. Both retailers, online and physical, face many similar and different challenges.
Competition is among the biggest challenge that physical retailers face from the online retailers though equally to some extent the online stores face some competition from the physical stores. Physical stores should adopt the online system of selling their goods as it seems to carry the day.
eBay. (2011). About eBay. eBay. Retrieved on 26 August, 2011 from: http://www.ebayinc.com/
eBay History. (2001). The History of eBay. Bradeis. Retrieved on 26 August, 2011 from: http://pages.cs.brandeis.edu/~magnus/ief248a/eBay/history.html
Home Deport. (2011). Shop All Departments. The Home Deport. Retrieved on 26 August, 2011 from: http://www.homedepot.com/