Ebay: Bidding for the Future

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Competitive Strategic Management (QGM6163)|
eBay Inc.: Bidding for the Future|


Founded on 1995 by Pierre Omidyar, eBay was considered a pioneer in the online auction industry whereby people are brought together on a local, national and international basis to serve the purpose of creating a person-to-person community where ever individual could have an equal access through the same medium which is the Internet. eBay offers wide varieties of products and services for bargain hunters, hobbyists and collectors and sellers, changing the way people engage in trading hence eBay had changed the face of e-commerce from its inception. Today, eBay is continuously the brand preference with over 39 market presence and with $60 billion of the total value of sold items on the site’s trading platform. Basically, eBay introduced several crucial innovations tailor-made for the internet at the business level, a strategy which was conceived to be an improvisation. The online auction business model is where eBay served as the value-added facilitator of trade between a buyer and a seller in a highly individualistic manner. The online auction model developed by eBay marked an important extension of e-commerce, offering millions of individuals a low-cost opportunity to engage in a new type of economic activity. 

When Whitman arrived in 1998 as eBay’s second president and CEO, eBay became a public listed company in September of that year, brand building recognition at eBay was prioritized. eBay’s registered users had grown six-fold, to over 2 million. Under Whitman’s leadership the company grew to over 200 million users globally and over $7 billion in revenue. During her tenure, Whitman helped eBay enter China, integrated globally recognized brands like PayPal and Skype into eBay portfolio and successfully steered the company through the dot-com bust by staying focused on its core users and core competency-online auctions. eBay made acquisitions in order to support its growth as a supplement to word-of-mouth and public relations advertising into tapping opportunities through national magazines and online alliances. These acquisitions aid in the expansion and improvement of the company’s services.

eBay is currently the third top-ranked online auction company within its industry, with nearly one-third of U.S. internet users registered on its site. The company is a substantial threat internationally as well, competing in the Asian, European, and Latin American markets. The online auction industry commands significant revenues that continue to increase to the projected amount of $229.9 billion by 2008. The outlook for both eBay and the online auction industry holds great promise, as is evidenced through the study of SWOT analysis, the driving forces of the industry, key success factors, eBay’s financial status, and eBay’s positioning in the market. eBay must also keep in mind the key strategic issues facing the company.

SWOT Analysis for eBay
eBay’s Strengths

eBay is the leading provider of online auction and customer-to-customer trading in the world. They have many competencies, core competencies, and distinctive competencies that set them apart from their competitors. Their alliances, international dominance, and recognizable brand, name just to name a few, are some of the main reasons why eBay is a company that is hard to top.

Largest Online Auction (core competence)
From its beginning in the mid-1990s, eBay has been growing in leaps and bounds. They now have over 94.9 million registered users in more than 150 different countries. eBay’s founder Pierre Omidyar did not even see the tremendous possibilities that eBay had when it was first developed over ten years ago. eBay now holds the top spot in the online auction industry. In the United States alone one-third of the population is already registered with the site and with increasing use of the internet that number...
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