Ebay: “the World’s Largest Online Marketplace”- a Case Study

Topics: Electronic commerce, EBay, Auction Pages: 12 (3985 words) Published: December 31, 2009
eBay: “The world’s largest online marketplace”- A Case Study J.Gopalkrishnan* V.K Gupta** Abstract 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. The objective at eBay was to “to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of even Amazon.com, making it the “world’s most valuable Internet retailer”. Pierre Omidyar, founder, is focused to achieve excellence in strategic management for improving the company’s strategy, sustaining the company’s growth and business performance, and potentially expanding from online auctions into general “etailing”, and to become “the world’s largest online mall”. This research paper intends to study the click and click business model of eBay, whose competitive advantage lies in its pure play strategy, a breakthrough from the traditional brick and mortar model, which leads to sustainable growth and a competitive edge over the other retailers. Keywords: Online marketplace, etailing, work ethics, online auctions/platform/mall Introduction: eBay establishes itself as the “The world’s Online Marketplace” .Coincidently, it is also the positioning statement of eBay,which itself 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, Bay offers an online platform where millions of items are traded each day. According to company lore, the idea for eBay came from founder Pierre Omidyar’s wife, who wanted to trade Pez dispensers with other collectors over the Internet. In truth Omidyar had been pondering an Internet auction venture before he was ever aware of Pez mania. He says that he had been thinking about how to create an efficient marketplace-a level playing field, where everyone had access to the same information and could compete on the same terms as anyone else.” After writing the code for the site, Omidyar launched eBay from his home in mid-1995.the concept of an Internet marketplace caught on so quickly that by the end of the year, eBay was getting a few thousand hits daily. Even more impressive the website was profitable from its inception. The objective at ebay was to develop the work ethics and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. Ebay went public in September 1998 at $18 a share. By early march 1999, the stock was trading approximately b$282 per share. The company market capitalization had surpassed that of even Amazon.com, making it the world’s most valuable Internet retailer. *Institute of Management, Nirma University of Science & Technology, Ahmedabad. E-mail: jaya_gopalkrishnan2000@yahoo.com **Indian Institute of Management, Indore

IIMK

IIML

eBay’s strategy eBay community values are incredibly amazing since it focuses on trading millions of dollars on mere faith and trust among the community members. Its values can be sited as below, “We believe people are basically good We believe everyone has something to...

References: Armstrong, Arthur and John Hagel III. 1996. “The Real Value of Online Communities.” Harvard Business Review. (May-June): 134-141. Bajari, Patrick and Ali Hortacsu. 2000. “Winner’s Curse, Reserve Prices and Endogenous Entry: Empirical Insights from eBay Auctions.” Working paper, Stanford University. Clay, Karen. 1997. “Trade without Law: Private-Order Institutions in Mexican California.” Journal of Law, Economics and Organization, 13: 202-231. Duh, Rong-Ruey, Karim Jamal, and Shyam Sunder. 2001. “Control and Assurance in ECommerce: Privacy, Integrity and Security at eBay.” Working paper, Yale University. Greif, Avner. 1989. “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders.” Journal of Economic History, 49: 857-82. The Maghribi Traders’ Coalition.” American Economic Review, 83: 525-548. Houser, Daniel and John Wooders. 2000. “Reputation in Auctions: Theory, and Evidence from eBay.” Working paper, University of Arizona. Katkar, Rama and David Lucking-Reiley. 2001. “Public versus Secret Reserve Prices in eBay Auctions: Results from a Pokeman Field Experiment.” Working paper, University of Arizona. Kollock, Peter. 1999. “The Production of Trust in Online Markets,” in Advances in Group Processes, Vol. 16, JAI Press, 99-123. from eBay: the Determinants of Price in Online Auctions.” Working paper, University of Arizona. McDonald, Cynthia G. and V. Carlos Slawson, Jr. 2000. “Reputation in an Internet Auction Model.” Working paper, University of Missouri-Columbia. McMillan, John and Christopher Woodruff. 2001. “Private Order Under Dysfunctional Public Order.” Michigan Law Review, 98: 2421-2458. Melnik, Mikhail I. and James Alm. 2001. “Does a Seller’s eCommerce Reputation Matter?” Working paper, Georgia State University. Milgrom, Paul R., Douglass C. North and Barry R. Weingast. 1990. “The Role of Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the Champagne Fairs.” Economics and Politics, 2:1-23. Resnick, Paul, Richard Zeckhauser, Eric Friedman, and Ko Kuwabara. 2000. “Reputation Systems.” Communications of the ACM, 43: 45-8. Resnick, Paul and Richard Zeckhauser. 2001. “Trust among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System.” Working paper, University of Michigan. Saloner, Garth, Andrea Shepard, and Joel Podolny. 2001. Strategic Management. New York: Wiley. Snyder, James M. 2000. “Online Auction Fraud: Are the Auction Houses Doing All They Should or Could to Stop Online Fraud.” Federal Communications Law Journal, 52: 453-72. Woodruff, Christopher. 1998. “Contract Enforcement and Trade Liberalization in Mexico’s Footwear Industry.” World Development. 26:979-991. Michael Porter’s: Case Studies and books
**************************
Conference on Global Competition & Competitiveness of Indian Corporate
549
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • eBay and Amazon case study Essay
  • Ebay---the Largest Online Supermarket Essay
  • Essay about EBay In China Study Case
  • Essay on Case Study “Ebay in China”
  • Ebay Case Study Essay
  • Online Marketplace Essay
  • Essay about Ebay Case Study
  • Change Management (Ebay Case Study) Essay

Become a StudyMode Member

Sign Up - It's Free