Ebay Case Study

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Strategic Management Case Study
eBay Inc.
2009

Executive Summary
EBay Inc. has revolutionized the virtual online business community. This global e-commerce company that now has over 86.3 million active users started in San Jose, California in September 1995. Pierre Omidyar, eBay’s fonder, came up with the idea of an online marketplace when he realized he wanted a platform to trade his Pez dispensers. This platform has grown to provide its customers with any service needed in the buying process from registrations to transaction close. EBay proprietary services include PayPal, Skype, and many other popular websites and service.

As of 2008, eBay has a 14 percent global share in e-commerce with over 86.3 million users. EBay’s success is achieved through its main business segments and diversified revenue streams. Even in an economic downturn, eBay is performing well relative to many other companies. Their strengths lie in their branded image of security and their support services. Some weaknesses deal with technology and customer relations. The company has many opportunities in the future such as expanding even more geographically and becoming the number one online payment systems.

Currently, eBay is having some trouble with their competition such as Amazon, especially in the customer relation and technological innovation. Still, with a few tweaks in their strategy, eBay could easily achieve even greater success then they already have. The economies of the world are looking for a payment and marketplace powerhouse and eBay could very easily answer this call.

Existing Mission Statement
An interesting fact, eBay has never had a formal mission or vision statement. However, the following statements have been found in their annual reports.
“We intend to achieve our mission of creating the world’s online marketplace by improving and expanding across three main areas: categories, formats, and Geographies.” – 2005 Annual Report
“We intend to achieve our mission of creating the world’s leading e-commerce franchise by building upon our core Marketplaces business and building our adjacent businesses.”– 2006 Annual Report

“We intend to continue to work toward our mission of creating the world’s leading e-commerce franchise by investing in our core Marketplace segments and continuing to build our adjacent Marketplaces businesses.”– 2007 Annual Report

Objectives and Strategies
EBay incorporated is much more than just an online auction website. The corporation employs over 16,200 employees as of December 2008. Its e-commerce is supported by eBay’s proprietary services such as PayPal and Skype. A reason for eBay’s success and growth has a lot to do with the company’s diversified corporate revenues and main business segments.

EBay’s strategy surround three main business segments: marketplace, payments, and communications. The marketplace segment generates revenues from listings and fees paid by the sellers and buyers on the site. The payment segment generates revenues from the PayPal and Bill Me Later services. The communication segment generates revenues from Skype service fees. Currently, the main objectives of the company are to provide the best, most trusted services in these main segments. EBay wants to provide a “faster, easier, safer online commerce experience.” New Mission Statement

“Ebay Inc. intends to provide solutions in marketplace, payment, and communication for its valued customers by means of a secure, trusted, and efficient environment. Our company will continue to offer the latest and most innovated technology known to the market while also delivering outstanding customer service though our skilled employees. It is and always has been our philosophy to grow and expand while still putting our clients and customers first.”

SWOT (TOWS) Analysis
EBay’s SWOT analysis (Exhibit 1) is a comprehensive look at the company’s internal strengths and weakness as well as the...
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