2. Table of Contents
1. Introduction
2. Business Model
3. Value chain
4. Competitive forces
5. Financial Situation
6. Challenges
7. Long-term Growth
8. Recommendations
3. eBay Overview
Founded in 1995 by Pierre Omidyar
#1 in e-commerce, online payment and
voice over Internet
Store no inventory & Produce no products
16,200 people (including temporary employees)
5. eBay:
“ technology has always been a key
enabler of our growth and a tool to
connect and empower millions of
people globally”
6. eBay Businesses
Marketplaces
Provide platforms for online commerce
Payments
Provide online payment solutions
Communications
Provide low-cost connectivity
7. eBay Business Model
Acquisition &
Network
Partnerships
Pays
Feedback
Fees
Product
categories
Seller Communication Buyer
Sells
8. eBay Value chain
Strategic Alliance and Acquisition
Legal
Human Resource
Technology
Value Added
Marketing Product Purchasing Communicati Payment Peer Customer
• Word of Categories process on • Variable review services
mouth • Old and • Traditional • Ask a • Reliable • A Rules,
•Partnerships new auction question Trust and
• Classifieds • Variable • Buy it now • Skype Safety
websites • Fixed price • Click to call committee
• Voices
• Community
Wiki
• My
Collectible
9. eBay Competitive Forces
New Market Entrants
- Froogle
- The industry is very attractive
with no significant barriers to
enter
Substitutions
- Traditional Buyers
Rivalries
retail
- Strong competitors (Amazon,
- Strong buyer
- Switching cost bargaining power
Yahoo, MSN, FNAC)
from online with many
- Others (ubid.com, overstock.com,
auction to options in the
CQout.com, bidville.com)
traditional retail industry
is high
Suppliers
-Strong bargaining power for
software suppliers
- Weak bargaining power for
product suppliers
10. $ Millions
Net Income
600 50%
40% Net income
500
30% Link relative
Year to year
400 20%
10%
300
0%
200 -10%
-20%
100
-30%
0 -40%
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
11. MARKETPLACES
$ Millions
1600 25%
1400 20%
15% Internet
1200
Auction
10%
1000
Link relative
5%
800
0% Year to year
600
-5%
400
-10%
200 -15%
0 -20%
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
12. PAYMENTS
$ Millions
700 35%
680 30%
660
25%
Paypal
640
20%
620 Link relative
15%
600 Year to Year
10%
580
5%
560
540 0%
520 -5%
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
13. INCOME FROM OPERATION
$ Millions
2300 30%
25%
2200
20%
2100
15% Total operation
income
2000 10%
Link Relative
5%
1900
0% Year to Year
1800
-5%
1700 -10%
07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
17. Challenges
• Exposure to large contingent liabilities
due to litigations
Weaknesses • Insufficient screening process to control
counterfeit products
• Exposure to internet fraud and
security concerns.
• Increased business risks because of
Threats technological obsolesces and
reliance on third parties for licenses
• Unavailability of services leads to
loss of income
• Increasing competition
18. Can eBay still Grow?
Valuable
Assets
- Strong market
position
- Effective Integration Rareness
of segments
- Efficient business - Strong Imitability
model
market - Efficient
- Rapid growth of Organization
internet display and position business
Support
classifieds ads
- Efficient model
- Increasing popularity
of used goods business
- Increasing reliance on model
alternative payment
systems due to safety
issues
- Rapid international
expansion
19. Recommendations
• Make eBay interface easier to use
• Improve value and selection by combining
fixed price with auction-style
listing
• Expand Payment segment, i.e. Paypal
20. Recommendations
• Expand product and service base
• Acquisition or mergers must fit strategic
business of the company.
• Diversify, but unprofitable/unfit businesses
should be closed
Notes de l'éditeur
- eBay marketplace continues to be the largest in the world with nearly $60 billion of gross merchandise volume
- eBay marketplace continues to be the largest in the world with nearly $60 billion of gross merchandise volume
National Medal of Technology and Innovation is America’s highest honor for technological and scientific achievement
Marketplaces:including the traditional eBay.com platform, our other online platforms, such as our online classifieds businesses, our secondary tickets marketplace (StubHub), our online shopping comparison website (Shopping.com), our apartment listing service platform (Rent.com), as well as our fixed price media marketplace (Half.com)Payments : PayPal and Bill Me LaterCommunication: Skype, enables VoIP calls between Skype users and provides low-cost connectivity to traditional fixed-line and mobile telephones.
1/ Acquisitions many online shopping sites (notes next page) Draw more sellers, buyers, expand product basePartnerships with Google, and Yahoo
2/ Product categories expansion : create directory reference Only used, refurbished product>> new also Stubhub.com: sell all kind of event tickets Rent.com:apartment house for rent Half.com:cheap used products, no auction process ProvideKijiji.com:free local ads (US), Den Bla° Avis, Gumtree.com, LoQUo.com, OpusForum, Marktplaats.nl and mobile.deEbay Motors… Note: acquired Gmarket in 20093/ 4/ variety of Communication method . Note 70% of Skype was sold in late 2009 for 2.75 billion (initial bought 2.6 billion)5/ variety of payment systems Paypal, Paymate, ProPay, Moneybookers, BillMeLater : offer an ease of transaction6/7/ Customer service: Rules, Trust and safety committee: monitors transaction, prevent fraud, solve timely troubleshooting Voices :meet 10 times per year with buyer and sellers, keep in touch with community Community wiki: information source for buyers and sellers to update and edit best practices, tips and tricks My Collectible: writing reviews, promote and share information between users
- Software suppliers: technology patent, legal support for intellectual property, and fraud prevention system- Product suppliers: with many suppliers in the industry (Books, DVDs, CDs)
- The question of value asks how valuable the resource is to the firm in terms of enabling the firm to respond to threats and to create value. First, before the firm can determine resource value, it must first recognize the threats and opportunities in the external environment. Second, firms must realize that the value of a particular resource is dynamic in the long run. The question of rareness builds on the question of value, asking how many competing firms already possess that valuable resource The question of imitability addresses the sustainability of strategies by looking at the ease and cost with which a competitor may be able to duplicate or find a substitute for the valuable resource The question of organization considers whether the firm has the internal capabilities and systems that will allow the firm to extract the maximum value from the resource
