Ebay Case Study

Topics: Globalization, Strategic management, International trade Pages: 5 (1428 words) Published: March 23, 2012
eBay, Inc. is the largest and most popular marketplace on the Internet, allowing members to buy and sell almost anything. Launched in 1995, about 147 million people now use eBay. An estimated 430,000 people in the United States make all or most of their living by selling on eBay. eBay’s online payment service, called PayPal, enables transactions nearly anywhere in the world. eBay proclaims “trust” between buyers and sellers as the key to the success of the marketplace. eBay is the “The world’s Online Marketplace”, which is its positioning statement, and it means many things about the company’s identity. It enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses. eBay offers an online platform where millions of items are traded each day.

eBay’s goal, as CEO Meg Whitman explains it, is “to build the world’s largest online trading platform where practically can trade practically anything”

eBay’s listing growth has slowed dramatically during the year 2000. eBay choose to concentrate on its current business and building strong relationships with its existing community that result in slower expansion. The effect of this is the ability to compete with fast-growing, well-funded competitors. High competition in the online auction industry was obvious and called for a quite aggressive business strategy and fast reaction to changing needs of diverse market, in order to keep up with the growth pace, and to keep the leader position in the industry. Expansion for greater share of international market and targeting large businesses could ensure greater amount and greater value of performed biddings, greater returns and competitiveness of the company. However, the cornerstone of eBay's business from the beginning till now, was building loyal and honest community through open dialogue, close relations, and trust. The current loyal community consisted mainly from old small sellers who reacted negatively to eBay's new business strategy. Due to that fact, the conflict between values, prestige and opportunities for business growth appeared to be a ‘bad headache' for the eBay's management and its founder.

Will eBay be able to maintain its social capital as it grows?


* To be able to maintain its competitiveness on social capital and generate the $3 billion revenues and $1 billion in operating profits. * To achieved the leading position in the online auction industry, the main strategic components of its business model were to keep its current position in an e-commerce market, keep up with growing competition, and to maintain successful global growth.

VI. Areas of Consideration


* Feedback system critic, Sellers can also attempt to boost their own feedback by buying their own items with alias accounts, and leaving positive feedback for their main selling account. •Small & big company carries the same weight of feedback summary. •Ebay requires sellers to use Paypal because ebay owns it. In addition to eBay fees, sellers must pay a percentage to PayPal, as well; this is charged on the shipping charges in addition to the sale price.

* `Feedback system critic, sellers can also attempt to boost their own feedback by buying their own items with alias accounts, and leaving positive feedback for their main selling account.

VIII. Alternative Courses of Action

ACA 1:
The implementation of V3 for the increase of flexibility for the new customers, categories and countries. Advantages| Disadvantages|
* expected to handle growth in transaction volumes and increased number ofregistered users over the next 5 years * Perceptible improvement in application performance. faster, more efficient page loads and responses.| * The conversion of V3 will take 18 months * The...
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