2. SCHEME OF PRESENTATION
History
Introduction
Company profile
Business model
Acquisition of PAY PAL
Competitors
Financial analysis
SWOT analysis
5 force analysis
Recommendations
2
3. HISTORY
• 1995 – founder Pierre Omidyar, graduate from
Tufts University, encouraged by his wife’s
hobby.
• Skoll, Omidyar’s partner joined him as first
president.
• 1996 – incorporated in San Jose, CA
• Sept. 1998 – eBay first IPO. $18 per stock.
• 97, Meg Whitman, joins as CEO. HBS
3
5. COMPANY PROFILE – Mission & market
MISSION
MARKET
5
eBay's mission is to help practically anyone
eBay's mission is to help practically anyone
trade practically anything on earth.
trade practically anything on earth.
eBay enables trade on a local, national and
eBay enables trade on a local, national and
international basis. It features a variety of
international basis. It features a variety of
international sites, specialty sites, categories
international sites, specialty sites, categories
and services
and services
6. BUSINESS MODEL
Seller uploads the picture and description of the
item to be sold.
Sale ends at predetermined time.
High bidder and seller contact each other and
make arrangements of shipment.
Buyer sends funds to seller {money order, check,
PayPal}, seller sends goods.
Buyer and seller then grade each other through
feedback forums.
6
7. Business Model – reason for eBay’s success
Largest Online Trading Forum
Largest Online Trading Forum
Compelling Trading Environment
Compelling Trading Environment
Trust and Safety Programs
Trust and Safety Programs
Cost-Effective, Convenient Trading
Cost-Effective, Convenient Trading
Strong Community Affinity
Strong Community Affinity
Intuitive User Experience
Intuitive User Experience
7
8. Business Model
Seller
Seller
• Non refundable Insertion Fee
• Additional listing options to
promote
• Final Value Fee
8
Buyer
Buyer
• Browsing and
bidding
Is free of charge
9. ACQUISITION OF PAYPAL
PayPal uses existing electronic infrastructure of
bank accounts and credit cards to allow “small”
monetary exchanges online.
Its convenient for small businesses and
individuals, because they can collect online
payments without difficult set-up.
eBay acquired PayPal in 2002 and has integrated
it throughout its website as a payment option for
auctions.
9
10. MAJOR SERVICES AND FEATURES
Authentication Services
Get a second opinion on your item by using outside
expertise.
Verified Rights Owner (VeRO) Program
Make sure that items do not violate intellectual property
rights as there may be liability involved.
Dispute Resolution
An independent service that provides a neutral place to
work out disputes online efficiently and effectively.
10
11. MAJOR SERVICES AND FEATURES
• eBay Professional Services
Professional Services on eBay serves the fast growing
and fragmented small business marketplace by
providing a destination on eBay to find professionals
• eBay Local Trading
eBay has local sites in 60 markets in the U.S. These
localized eBay sites allow users to easily find items
located near them and browse through items of local
interest
11
12. MAJOR SERVICES AND FEATURES
eBay Premier
eBay Premier is a specialty site on eBay, which
showcases fine art, antiques, fine wines and rare
collectibles from leading auction houses and
dealers from around the world
eBay Live Auctions
Live Auctions provides live, real-time online
bidding on items being sold on the sales floor of
the world's leading auction houses
12
13. COMPETITORS
eBay’s broad-based competitors include the vast majority of
traditional dept and general merchandise as well as emerging
online retailers
Amazon
Yahoo
!
Buy.com
Autobytel.com
MSN
WalMart
Home Depot
Macy’s
Sam’s Club
13
AOL
Dell
14. eBAY VERSUS YAHOO FOR SELLERS(1/2)
eBay
Maximum
Duration
10 Days
Yahoo
14 Days
eBay auctions end at the time
the auction was created
Yahoo allows you to set the
ending time within a one-hour
based on the starting or reserve range. any fees for listing auction
not charge
Fee price of an item each time an item
items to the buyer or seller
is listed
up to five percent of the final
to the buyer or seller when an
Commiss
closing price
item
ions
fee for reserve auctions
is sold
Endin
g
Time
Chances of
More likely
Buy & Sell
Less likely
a
When aa page for the item gets created page for the item is created
immediately,but it can take several
immediately. The item is also added to
new Item
Is posted
hours before the item gets added tolist of items and is searchable
the
the list of items and is searchable
immediately.
14
15. eBAY VERSUS YAHOO FOR
BUYERS
eBay
Items
Charging
for
posting
Unusual
Thing
Search
Brows
items
Insuran
ce
Over 6 times more items
Yes
More likely to find
Titles or titles &
description
Can limit within a category
By title or by picture
(if designated as part of the
gallery )
Yahoo
A lot fewer items
No
Not have as wide or deep of a selection
Titles or titles &
description
Can limit within a category
By title or by picture
Automatic insurance for
Not offer insurance
sales
Space Not provide space for pictures:
Provides free space for auction item
for You must place your picture files
Pictures, so more items have pictures
picture On some other site
For you to see
s
15
16. eBAY VS. COMPETITION- FACTS
eBay had great first mover advantage and brand
name establishment in the U.S.
Google could also be a potential competitor but
management does not see it as threat.
In the International markets though, Yahoo moved in
first and EBay is suffering from that still.( Japan and
other south Asian markets.
Amazon and yahoo stole most of the market share
during three ebay crashes during 99.
EBay does have its supremacy in the U.S. with yahoo,
Amazon and Google following leaders.
16
17. THREATS OR ISSUES
• Bargaining power of suppliers.
• Substitutes product or services such as b2b,
b2c service providers.
• Increasing competition from Amazon and
yahoo.
• No barrier to entry in the industry.
• Buyer-seller frauds
• Technology failure or/and change
17
19. FINANCIAL ANALYSIS - REVENUE & NET
INCOME
Revenue(1000$)
Revenue(1000$)
500000
Net Income(1000$)
Net Income(1000$)
431424
400000
300000
224724
200000
100000
86129
0
1998
19
1999
2000
60000
50000
40000
30000
20000
10000
0
48294
7273
9567
1998
1999
2000
20. PROFIT OPPORTUNITY IN PROCESS
New profit
opportunity
Delivery
profit
E-money
Profit
Trading
Profit
Delivery
Payment
Trading
Listing
89% of TR
Profit
Selling
Searching
Profit
9% of TR
Advertising
2% of Total
Requirement
Profit
Revenues(2000
)
20
Listing
21. REASON FOR SUCCESS
Mature and diverse board of directors
7 outsiders, 1 insider, 1 related insider
Strong management team lead by
Meg Whitman. Senior staff consists of experienced
managers from companies such as PepsiCo and Disney
with an average of 20 yrs. of business experience and a
strong vision for the company.
Brand name development
eBay has carefully developed a brand name based on
ease and trust. They have created the defector online
trading platform.
21
32. FORCE ANALYSIS 5
(B2B, B2C, C2B,off-line…)
Threat of substitute
Threat of substitute
Products or services
Products or services
Bargaining power
Bargaining power
Rivalry among
Rivalry among
of Suppliers
of Suppliers
Existing Competition
Existing Competition
(GM, HP…)
(Yahoo, Amazon
…)
Barriers to entry
32
Buyers
(GE..)
33. RECOMMENDATION
To Be the World Leader in e-Market Place
To Be the World Leader in e-Market Place
S
E
R
V
I
C
E
G
L
O
B
A
L
…
B
U
S
I
N
E
S
S
M
O
D
E
L
S
Y
S
T
E
M
eBay : 22.0M users, 265M
items
33
34. RECOMMENDATION
Services
Services
Depending on the category of product
Depending on the category of product
Back Ground Increasing of Community power
Back Ground
Increasing of Community power
Trust issues between buyers & sellers
Trust issues between buyers & sellers
Strategy
Strategy
Broaden the eBay Trading Platform
Broaden the eBay Trading Platform
Foster eBay Community Affinity
Foster eBay Community Affinity
Enhance Features and Functionality
Enhance Features and Functionality
Target key product categories for special users
Target key product categories for special users
Develop new community tools
Things Develop new community tools
Things Enhance the community for women and old peoples
Enhance the community for women and old peoples
To
To Add new features and services to help trade with greater ease
Add new features and services to help trade with greater ease
Do
Do Expand Value-Adds Services ( community purchase)
Expand Value-Adds Services ( community purchase)
Increase the Trust and Safety Programs
Increase the Trust and Safety Programs
34
35. RECOMMENDATION
Globalization
Globalization
Growth rate Decreases
Growth rate Decreases
Back Ground
Back Ground To utilize the advantages of internet in globalization
To utilize the advantages of internet in globalization
Homogeneity global market
Homogeneity global market
Strategy
Strategy Different strategies to enter new international markets
Different strategies to enter new international markets
Things
Things
To
To
Do
Do
35
Enforce Marketing in foreign countries
Enforce Marketing in foreign countries
Provide unified site and URL in each country
Provide unified site and URL in each country
Introduce country-specific services
Introduce country-specific services
Choose from building solely, acquiring a company or
Choose from building solely, acquiring a company or
partnering with strong local companies
partnering with strong local companies
36. RECOMMENDATION
Business Model & Strategic alliance
Business Model & Strategic alliance
Limit of P2P market size
Limit of P2P market size
Back GroundGreat potential market of B2C and B2B
Back Ground Great potential market of B2C and B2B
A new, rapidly evolving and intensely competitive area
A new, rapidly evolving and intensely competitive area
Strategy
Strategy
Things
Things
To
To
Do
Do
36
Expand Business Model from P2P to B2C and B2B
Expand Business Model from P2P to B2C and B2B
Good relationship with partner
Good relationship with partner
Have a partnership with bank, c-card,e-money, mobile
Have a partnership with bank, c-card,e-money, mobile
communication company, Google etc
communication company, Google etc
Expand gradually Business model from P2P to B2C
Expand gradually Business model from P2P to B2C
Develop the eBay's private brand product.
Develop the eBay's private brand product.
37. RECOMMENDATION
System Infrastructure
System Infrastructure
15 System downs between Aug 2008 and Nov 2009
15 System downs between Aug 2008 and Nov 2009
Back Ground The threat of Hacking ( Deny of services )
Back Ground
The threat of Hacking ( Deny of services )
The cost of system failure is so big
The cost of system failure is so big
Strategy
Strategy
Adapt to changing technologies and industry standard
Adapt to changing technologies and industry standard
Achieve to stability, availability and efficiency
Achieve to stability, availability and efficiency
Build backup system for important system such as CPU
Build backup system for important system such as CPU
Disk,D/B, Network System, Power, Communication Line
Things Disk,D/B, Network System, Power, Communication Line
Things Downsize the computer system from Mainframe-level Sun
Downsize the computer system from Mainframe-level Sun
To
To
to Linux (( ex: Google has 4,000 Linux server)
to Linux ex: Google has 4,000 Linux server)
Do
Do Acquire specialist for System, DB, Network,Program and etc
Acquire specialist for System, DB, Network,Program and etc
Invest more money on System Infrastructure
Invest more money on System Infrastructure
37
eBay (NASDAQ: EBAY; http://www.ebay.com) is the world's largest online marketplace.
Founded in September 1995, eBay is the leading online marketplace for the sale of goods and services by a diverse community of individuals and businesses. Today, the eBay community includes 29.7 million registered users, and is the most popular shopping site on the Internet when measured by total user minutes according to Media Metrix.
OUR MISSION eBay's mission is to help practically anyone trade practically anything on earth.
OUR MARKET eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services that aim to provide users with the necessary tools for efficient online trading in the auction-style and fixed price formats.
In 2000, the eBay community transacted more than $5 billion in annualized gross merchandise sales (value of goods traded on the eBay site).
On any given day, there are millions of items listed on eBay across thousands of categories. People come to eBay to buy and sell all kinds of practical, unique, and interesting items, such as automobiles, jewelry, musical instruments, cameras, computers, furniture, sporting goods, tickets, and boats.
Buy It Now Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction. It gives sellers an easy and convenient method to sell items fast at a specific price. Listings with Buy It Now also run as an auction, however, once an auction bid is placed, the opportunity to buy it now ends.
eBay Professional Services Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals and freelancers for all kinds of business needs such as web design, accounting, writing, technical support, among others.
eBay Local Trading eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest. eBay's local sites deliver a distinctive regional flavor, while giving users the convenience to shop for more difficult-to-ship items such as automobiles, furniture or appliances.
eBay Premier eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world. Through its "Premier Guarantee" program, all sellers on eBay Premier stand behind and guarantee the authenticity of their items.
eBay Live Auctions Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses. A proprietary technology developed by eBay, Live Auctions empowers traditional auctioneers to extend their sales beyond the auction house floor and reach millions of potential buyers online. Buyers gain easy access to exclusive, high-end property with the convenience and comfort of bidding from their home or office.
Buy It Now Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction. It gives sellers an easy and convenient method to sell items fast at a specific price. Listings with Buy It Now also run as an auction, however, once an auction bid is placed, the opportunity to buy it now ends.
eBay Professional Services Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals and freelancers for all kinds of business needs such as web design, accounting, writing, technical support, among others.
eBay Local Trading eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest. eBay's local sites deliver a distinctive regional flavor, while giving users the convenience to shop for more difficult-to-ship items such as automobiles, furniture or appliances.
eBay Premier eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world. Through its "Premier Guarantee" program, all sellers on eBay Premier stand behind and guarantee the authenticity of their items.
eBay Live Auctions Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses. A proprietary technology developed by eBay, Live Auctions empowers traditional auctioneers to extend their sales beyond the auction house floor and reach millions of potential buyers online. Buyers gain easy access to exclusive, high-end property with the convenience and comfort of bidding from their home or office.
eBay (NASDAQ: EBAY; http://www.ebay.com) is the world's largest online marketplace.
Founded in September 1995, eBay is the leading online marketplace for the sale of goods and services by a diverse community of individuals and businesses. Today, the eBay community includes 29.7 million registered users, and is the most popular shopping site on the Internet when measured by total user minutes according to Media Metrix.
OUR MISSION eBay's mission is to help practically anyone trade practically anything on earth.
OUR MARKET eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services that aim to provide users with the necessary tools for efficient online trading in the auction-style and fixed price formats.
In 2000, the eBay community transacted more than $5 billion in annualized gross merchandise sales (value of goods traded on the eBay site).
On any given day, there are millions of items listed on eBay across thousands of categories. People come to eBay to buy and sell all kinds of practical, unique, and interesting items, such as automobiles, jewelry, musical instruments, cameras, computers, furniture, sporting goods, tickets, and boats.
As soon as others realized the market potential in online P2P auctions , competition entered the market in the form of Yahoo! Auctions, and Amazon.com Auctions
the largest barrier to entry that eBay possesses is their large and impenetrable market share.
The competition in the market struggles to find sellers because they don't have enough registered bidders to attract sellers to their sites. On the opposite note, competitors have trouble attracting bidders because there aren't a large enough variety of items offered on their sites.
eBay have no marginal inputs into each revenue-generating auction. This eliminates any pressures from suppliers that many online companies face.
The customers of eBay have little bargaining power. Since eBay is a marketplace and not a vendor, they do not directly communicate with their customers.
Easy to set up : a free market. with little hassle and only the software development costs.
Any new entrant into the online auction industry is faced with the dilemma of attracting members.
Since eBay sellers offer both new and used products, eBay vendors compete with both online, and bricks and mortar retailers.
Many price sensitive and computer savvy consumers are well aware that eBay vendors offer many of the same products sold in stores or on other websites at a great discount.
the risk of buying from an individual will always have greater risk and a higher beta than purchasing in a regular store, and the consumer will always demand higher consumer surplus (lower price) to compensate for the risk.