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Table of Contents

1.Company Description

2.1What is competition like in the online auction industry? How strong are the competitive pressures confronting eBay and other online auction firms? 2.2 What forces are operating in the online auction macro-environment that has the power to alter the nature and structure in the online auction industry? 2.3 What does a strategic group map reveal about the positions of the major players in the online auction industry? Is eBay in a good position on the map? Why or why not? Who are the closest competitors? 2.4 What do you see as the key success factors for firms in the online auction industry? 2.5 What does a SWOT analysis reveal about eBay’s situation? Just how attractive is the company’s situation and position? 2.6 What is your assessment of eBay’s financial performance and financial condition? Is the company in good financial shape? Why or why not? Please use the summary of financial ratios in Table 4.1 in Chapter 4 to guide your calculations and support your assessment of the company’s financial performance. 2.7 Is competition in the online auctions industry best described as global or multi-country? Why? Which type of international strategy is eBay using in its international operations? 2.8 Based on your analysis of the industry and eBay’s situation, what problems and issues does eBay’s top management need to address? Which ones are top priorities? Which are low priorities? 2.9 What actions would you recommend to Ms. Whitman and Mr. Omidyar to improve the company’s competitive position, especially its international operations, and its long-term financial performance?


1.Company Description

eBay Inc. is an American Internet company that manages eBay.com, and provide an online auction and shopping Web site in which people and businesses buy and sell goods and services worldwide. The headquarter of eBay is located in San Jose, California, the United States. eBay was born over Labor Day weekend in 1995, when Pierre Omidyar, a computer programmer, wrote the code for an auction website that he ran from his home computer. The company had been the dominant player in the online auction industry since its inception in 1995. Now, with a presence in 39 markets, including the U.S., and approximately 84 million active users worldwide, eBay has changed the face of Internet commerce. In 2007, the total value of sold items on eBay's trading platforms was nearly $60 billion and the items include widely from Beanie Babies to fine antiques. This means that eBay users worldwide trade more than $1,900 worth of goods on the site every second. Since its initial public offering in 1998, the company has continued to innovate and connect people - and not just through its marketplaces. Two critical acquisitions have made eBay Inc. a global leader in online payments and communications as well. Also, eBay owns subsidiaries which are PayPal, Skype, and other businesses. Today, eBay acquired one of the fastest growing online ticket sellers, StubHub, for $307 million in 2007.

2.1What is competition like in the online auction industry? How strong are the competitive pressures confronting eBay and other online auction firms?

The online auction industry is very competitive and developing rapidly now. This industry is part of the Retail Trade Sector in the US. Operators in this industry retail a broad range of merchandise exclusively via electronic shopping, that is through the internet in the form of regular sales like, books purchased on Amazon.com or through auctions, like eBay. The range of products range from food hampers, to electronic goods such as DVDs, CDs, toys, jewelry, clothing, footwear, cars, vacation packages etc. It is important to note, that those retailers that operate a physical store and have also set up a website in conjunction with their store are excluded from this industry. This US industry comprises establishments engaged...
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