Case Study Analysis
eBay: In a League of Its Own
EBay is the leader of the online auction industry, and was unchallenged for quite some time. The eBay company became the leader in the online auction industry by not only allowing everyday consumers to purchase and sell items, but it also allowed big companies to clear up their stock to bargain shoppers. EBay has become a serious competitor in the traditional e-tail environment with the less competitive “buy it now” option and the acquisition of PayPal, their secure online payment system.
The problem that eBay faces currently is creating a business plan to maintain their position as the leader in the online auction industry while establishing a place as a retailer of choice in the fixed price e-tail market and continuing to exceed profit levels.
Maintaining their place has become a recent challenge because eBay is currently facing stiff competition in the online auction market. Some of the competition that eBay is up against are sites such as Yahoo Auctions, Overstock.com, Craigslist, Google and the recent re-surge of Amazon.com. EBay is now facing competition because other sites are now building their sites around some of the cons of the eBay giant. For example, eBay is not a free site. Sellers are charged monthly fees, which in turn can drive up the cost of the items being sold. Sites such as Craigslist are completely free, increasing its popularity everyday based upon the fact that there are no fees to utilize the site, the site is more local selling merchandise to consumers who are near the item, so shipping costs are minimal. This also allows the consumer the option to pick up items much faster. Amazon.com has seen a recent surge in users due to its non auction format that is appealing to many consumers. Amazon.com also has increased their popularity by allowing used items to be sold and independent sellers to have business on their site.
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