Topics: Electronic commerce, EBay, Online auction business model Pages: 9 (3388 words) Published: May 5, 2013
SWOT analysis of eBay
This is an eBay Inc. SWOT analysis for 2013. For more information on how to do SWOT analysis please refer to our article. Company background
Name| eBay Inc.|
Industries served| Internet, Online retailing|
Geographic areas served| Worldwide|
Headquarters| U.S.|
Current CEO| John Donahoe|
Revenue| US$ 14.07 billion (2012)|
Profit| $ 3.229 billion (2011)|
Employees| 27,770 (2012)|
Main Competitors| Amazon.com, Craigslist, Ubid, eBid Auctions, Google, Overstock.com| eBay is an international online marketplace with a global customer base of 233 million. It is a multibillion business operating in 37 countries. There are millions of items listed on eBay across thousands of categories, including antiques, toys, books, computers, sports and electronics, amongst many others. You can find more information about the company in its official website or Wikipedia’s article. SWOT analysis of eBay

eBay SWOT analysis 2013|
Strengths| Weaknesses|
1. World’s largest internet marketplace2. Business model (no strong direct competition)3. Economies of scale4. Localization5. Payment system6. Brand reputation| 1. High fees2. No further growth strategy| Opportunities| Threats|

1. Growing number of mobile shoppers2. Become a retailer3. Increase services and product portfolio through acquisition4. Open more online stores in other countries| 1. Online security2. Regional low cost online retailers3. Increasing competition from Amazon4. Exchange rates|

1. World’s largest internet marketplace. eBay has more than 150 million live listings and more than 105 million active users globally in 37 countries. That makes eBay the largest marketplace online, having a great power over other online retailers. 2. Business model. eBay only acts as a middleman between sellers and buyers, who bid and sell items in eBay’s marketplace. Being a pioneer in online auctions, eBay had no competition and currently has only few strong direct competitors. Thus, company’s business model is a competitive advantage over such giant retailers as Amazon. 3. Economies of scale. In the beginning, eBay had to invest heavily to gain IT and customer relationship management (CRM) knowledge and skills, but since then, used its skills to serve over 100 million users and to create the largest online marketplace with little additional costs. 4. Localization. The company operates its marketplaces in 37 countries. Each marketplace is using local language and is adapted to local product offerings. No other global online marketplace is localized to such degree. 5. Payment system. eBay uses PayPal, its own payment system, to proceed nearly all of the payments going from eBay’s marketplace. From eBay’s perspective, such tight integration has the benefits of more fees collected (PayPal takes transaction fees from the businesses) and tighter control over buyer’s shopping experience. From buyer’s perspective, PayPal provides easy to use online payment method. 6. Brand reputation. eBay is a trustworthy brand, known all over the world and is valued at $11 billion. Weaknesses

1. High fees. eBay’s fees for the sellers has risen significantly over the years. The firm receives fees on listed goods, sold goods, some adornment fees and PayPal transaction fees. The sellers often make zero profit on their low price products sold on eBay due to its high fees. 2. No further growth strategy. eBay hasn’t unveiled any plans on how the company is going to sustain its growth. Firm’s top management team is unsure whether eBay should become a retailer or to introduce new products and services and how to do that: developing its own products or acquiring new business. As a result, there is high uncertainty over eBay’s future and business direction.

1. Growing number of mobile shoppers. eBay has a strong payments system PayPal that is widely accepted and used by many online retailers and online shoppers as it is...
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