eBay is an American multinational e-commerce corporation founded in 1995 that operates online auction and shopping websites. It grew rapidly and became a phenomenal success, now having a net worth of billions. The first item sold on eBay was a broken laser pointer for $14. The most expensive was a luxury yacht sold for $140 million. The document analyzes eBay's strategic position using PESTEL, Porter's Five Forces, and SWOT analyses to understand the various external and internal factors influencing the company. It also compares eBay to competitor Amazon and discusses questions about eBay's current strategy.
Python Notes for mca i year students osmania university.docx
eBay
1. CASE STUDY
Group Members
Grace Chu
Eyo Chay Ni
Rachel Gomez
Monday, 10th Feb 2014
2. BACKGROUND
eBay is an American Multinational Internet Corporation
Founded in 1995 by Pierre Omidyar
Online Auction Website
Phenomenal Growth
Net Worth
3. First Item Sold on eBay
Sold for USD 14 – A laser pointer that was broken
8. Political
Globalization
able to break into a new market which previously closed
challenges from foreign competitors
High government investment on ICT infrastructure
faster, better and more reliable internet access user
Marketplace Fairness Act
US state sales tax
Increase the price of a product or service
people would probably stop buying
internet retail sales could decrease by up to 24% (Austan Goolsbee, 2000)
Government Intervention
China’s internet regulators have made it difficult for foreigners to participate
fully, giving local Chinese e-retailers an advantage from the offset (Dean, The
Wall Street Journal, 2006)
9. Economic
Exchange rate
conduct significant business outside United States but profitability is
reported in US dollar
Global economic condition
weak economic condition would limit the growth of revenue
change in consumer purchase pattern
10. Social
Lifestyle and attitude vary from country to country
they have to set different target, product or consumer categories
* eBay failed to break into China market, the hottest market as they did not
localize their services
Increase in online social networking
people are rely on internet
can get everything easily from online shopping
an opportunity to increase market share
11. Technological
Growth of internet
lower the barriers of entry
more competitors
growth of internet user will increase public online consumption
Rapid development of high-speed network service
eg: broadband broadband internet connection were used by
42% of household, up from 32% in 2012
Third party online payment system
PayPal
provide a safe, easy and secure way to make and receive payment
online
reduce the risks of transaction
12. Legal
Strategy developed which have to comply with different legal
obligations domestically and internationally
The European Sales of Goods Act
Data protection act in UK
Federal Trade Commission in USA
EU Electronic Commerce Directive
The Electronic Signatures Law
Increase the use of e-commerce of both consumers and business
ensure a certain level of security in online shopping
costs for online business
13. Environment
Global warming and pollution awareness increase
globally
more online shopping
have to be more ‘green’ to attract consumer
eg: eco-packaging, work environment
14. Porter’s Five Forces
Bargaining Power of
Customers
Threat of
Substitutes
Threat of New
Entrants
Bargaining Power of
Suppliers
Rivalry among
Competitors
15. Bargaining Power of Customers
High Bargaining Power
Other Options
Online or Retail Stores
Price Comparison
16. Threat of Substitutes
Low Threat
eBay is more convenient
Substitutes cannot have much variety
20. Differences between eBay & Amazon
Auction Site
More Towards Fix Price
More Interaction between
Buyers and Sellers
Less Interaction between
Buyers and Sellers
Pay-Pal
Facilitates all its payments
Middleman
Middleman and also a
retailer
22. Net Income of eBay and Amazon
Net Income in K
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
-500000
2009
2010
2011
Ebay
Amazon
2012
2013
23. SWOT ANALYSIS
1)
2)
3)
4)
5)
STRENGTHS
Global Reach
Recognizable Brand Name
Wide Variety of Products
No Inventory Holding
No sales personnel
OPPORTUNITIES
1) Critical Foreign Market Not
Penetrated
2) (CLOP internet based purchase)
3) Growth Through Acquisition
WEAKNESSES
1) Technology malfunction
2) Product Description Lacking
THREATS
1)
2)
3)
4)
Fraud
Increased Competition
Old and New Technology
Small entry barrier to industry
24. QUESTIONS
Analyze the marketing environment and the forces shaping
eBay’s business over the years.
How has the change in the nature of eBay sellers affected
the creation of value for buyers?
Do you agree or disagree with Donahoe that eBay’s current
strategy doesn’t mean that certain sellers will lose?
Is eBay doing the right thing by sticking its current
strategy? What changes, if any, would you recommend to
Donahoe?