Ebay Strategy

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  • Topic: EBay, Auction, John Donahoe
  • Pages : 85 (2941 words )
  • Download(s) : 228
  • Published : April 17, 2013
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Short history of eBay
Pierre
 Omidyar
 launched
 the
 
 first
 online
 auction
 in
 1995
 under
 the
 name
 ‘Auctionwatch’
  under
 the
 domain
 name
 of
 www.eBay.com
 with
 the
 intention
 of
 creating
 a
 person-­‐to-­‐person
 trading
  community
 based
 on
 a
 democratized,
 efficient
 market
 where
 
 everyone
 could
 have
 equal
 access
  through
 the
 same
 medium,
 the
 Internet.
 The
 initial
 concept
 was
 to
 attract
 neighbours
 and
 other
  interested
 in
 the
 San
 Francisco
 Bay
 area
 residents
 to
 the
 site
 to
 buy
 and
 sell
 items
 of
 mutual
 interest.
  From
 there,
 the
 business
 grew
 to
 succession
 year
 after
 year.
  1996:
 Jeffrey
 Skoll
 became
 co-­‐president
 and
 director
 of
 eBay.
  1997:
 Margaret
 Whitman
 became
 CEO
 of
 eBay.
  2004:
 eBay
 acquired
 a
 share
 in
 Craigslist.
  2005:
 eBay
 acquired
 Rent.com
 and
 Shopping.com.
  2006:
 Acquisition
 of
 Skype.
  2007:
 eBay
 acquired
 Stubhub.com.
 
  2008:
 Margaret
 Whitman
 resigned
 as
 CEO.
 John
 Donahoe
 was
 her
 successor.
  During
 the
 years
 2006-­‐2008,
 eBay
 experienced
 a
 drop
 in
 gross
 merchandise
 sales
 to
 -­‐12%
  and
 a
 reduction
 in
 number
 of
 auctions
 listed
 to
 -­‐15%.
 This
 signalled
 a
 downturn
 in
 business
 for
 eBay,
  and
 a
 need
 to
 overcome
 the
 challenges
 which
 it
 now
 faced.
 
  Between
 2006
 and
 2008
 :
 eBay’s
 share
 of
 the
 US
 e-­‐commerce
 market
 had
 fallen
 from
 19%
 to
  17%
 (Amazon
 market
 shares,
 same
 period:
 from
 3,7%
 to
 5,3%).
  In
 2008,
 John
 Donahoe
 took
 over
 the
 firm.
 Donahoe
 was
 a
 man
 who
 liked
 change.
 He
  believed
 that
 the
 firms
 marketplace
 sector
 had
 reached
 its
 maturity
 and
 a
 change
 in
 strategy
 was
  needed
 for
 the
 firm
 to
 move
 forward.
 In
 other
 words,
 he
 believed
 that
 the
 emphasis
 should
 no
  longer
 be
 put
 on
 the
 market
 place
 sector
 of
 eBay
 but
 on
 expanding
 the
 business
 by
 providing
 an
  array
 of
 other
 services.
 
 
 

Question 1:
Porters’
 five
 forces:
 
  When
 eBay
 was
 first
 set
 up
 in
 1995,
 it
 was
 the
 first
 business
 in
 the
 online
 auction
 industry.
 Since
  then,
 the
 industry
 has
 grown
 significantly.
 
 eBays
 competitors
 include
 Amazon,
 uBid,
 Yahoo,
 and
  Google.
 Due
 to
 the
 increasing
 interest
 in
 the
 online
 auction
 industry,
 eBay
 is
 now
 facing
 competition
  from
 a
 number
 of
 different
 rivals,
 most
 importantly
 Amazon.
  1. Bargaining
 Power
 of
 buyers:
 Medium
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