Ebay Case Analysis

Topics: EBay, Online auction business model, Electronic commerce Pages: 5 (1323 words) Published: January 23, 2009
eBay: Dominance in the On-line Industry
eBay is The World’s Online Marketplace®. Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay and its subsidiaries, half.com and shopping.com, to name a few (“eBay Inc Outlines Global Business Strategy”, 2000.) Retrieved October 31, 2008 from http://investor.ebay.com). eBay enables trade on a local, national, and international basis with customized sites in markets around the world. eBay is leading the way in Internet auctions over competitors, Amazon.com and Yahoo.com. The Internet brings together a larger number of both buyers and sellers and has opened the way for individuals to trade on a global scale. eBay has taken a number of steps to increase consumer confidence and reduce theft risks .There is no doubt that eBay holds the power in the on-line auction industry. An analysis of the key factors of the company was compiled to find out what the eBay strategy is, and how it is doing financially. Finally, an internal analysis of the company’s strengths and weaknesses and an external analysis of its opportunities and threats have been provided. The intent of this paper is to unveil the meaning and value of growth strategies or models at eBay as well as to provide an in-depth study of their significance and reputation in the on-line industry. From its inception in a San Francisco living room, eBay has grown to be in a league by itself. Analysis of eBay’s Strategy and Business Model Before eBay could begin to compete in the on-line auction industry, a strategy and business model had to be developed. eBay needed to define the businesses they would be competing in and how they would compete in those specific businesses. eBay also wanted to define how they would be a successful service to their customers. The strategy was to become a diversified company. They wanted to diversify not only the products being offered, but also their customers’ base and global reach. From real estate to automobiles to toys, by using eBay anyone can find virtually whatever item(s) they may be seeking. Business Level Strategy

eBay competes in the on-line auction industry using an expansive segregation strategy. Although they may not be the most inexpensive site like yahoo.com, they have the largest variety of products. eBay also appeals to a larger group of consumers that include individual sellers, small entrepreneurs, and corporations all over the world. eBay achieves broad differentiation through their strong eBay community and a global reach not matched by any competitor with daily item listings over 2,500,000 (eBay Sell-thru Stats, (2008), Retrieved November 9, 2008 from http://www.medved.net.) .These aspects of the eBay service among others set the company apart from the rest because customers see the value in using the eBay service. This is why eBay has become so successful and continues to experience growth throughout the on-line industry simply based on customer satisfaction. SWOT Analysis

A SWOT (Strengths, Opportunities, Weaknesses and Threats) analysis of eBay was prepared to examine what the company does well and what needs some attention (Appendix A). Some of the main strengths of the company include a recognizable brand name, the variety of products offered, and a tremendous global reach. First, eBay has made sure to use vibrant color and unique writing to show their brand name off. They also use advertising through television and Internet to get continued publicity. Secondly, the wide variety of products offered gives eBay a competitive advantage above other auction sites. They can be considered the “Wal-Mart” of the Internet. Finally, the global reach that eBay has obtained is not matched by any other auction site. Although Amazon.com runs a close...
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