Ebay online company

Task 1


eBay is an online company that provides online marketplaces for the sales of goods and services. In addition, it provides commerce, websites, online repayments services and online communications offerings to individuals and businesses. The company primarily operates in the US. It really is headquartered in San Jose, California and utilizes 15, 500 people.

The company registered earnings of $7, 672. 3 million during the financial year concluded December 2007 (FY07), an increase of 28. 5% over FY06. The operating earnings of the business was $613. 2 million during FY2007, a loss of 56. 9% compared to FY06. The web earnings was $348. 3 million in FY07, a decrease of 69. 1% over FY06.


eBay currently has establish itself into a posture of strong financial success and expansion in the key regions of its business. Sales have increased because of the strengths of previous acquisitions and low costs have went back high profits back into free cashflow. Cash has been performed and used to progress success in fast-growing businesses in order to get quick dividends for stockholders. Cash happens to be detailed at $3. 8 billion and with borrowing ability increase by $1B to about $2B, they are really in a solid position to keep their growth in key acquisitions. Another strong financial factor to consider for eBay is the fact that it has allowed leverage of 3x EBITDA, up using their past permitted leverage of 2x, allowing for the use of more debts in their cost of capital framework. The stock market discovering eBay as a strong company has been important when they are adding capital and their current market capitalization is $15. 70B. By using this capital being brought up through the sales of its stock eBay has built two strong makes to funding their growth, personal debt and equity.


The executive team has been built-in order to provide management among a number of business areas which are specially specific to eBay. These include senior professionals of recruiting, platform technology, standard counsel, corporate marketing communications, marketplaces, money, and PayPal. These professionals report to the CEO and then to the panel of directors, who are positively involved with the organization and include ex - CEO Meg Whitman.

Within the organization eBay has made many improvements to aid in their growth. Three operating sections have been designed within the business to handle the popular marketplaces, along with the additions of payments and communications. Marketplaces are made through the use of eBay auction listings, fixed price listings, as well as the enhancements of these other online programs, Half. com, Rent. com, Shopping. com and StubHub. The payments segment is made up of PayPal, and marketing communications involves the attained Skype VoIP.


eBay currently holds a veteran management team under the control of the newly appointed CEO John Donahue. Donahue's predecessor was the popular Meg Whitman who got many successes after her entrance at eBay in its newborn stages. Whitman required the company public and through many successful years she could create a highly effective executive employees which was made to last.

The employees at eBay are really well looked after, and this can be an area of satisfaction for the business. Fortune has posted eBay as the 83rd best company to be employed by in its 2009 100 Best Companies to Work For model, and in 2008 it was rated 68th.


The huge amount of resources kept within the eBay company throughout each different area allows those to create capabilities for the business. That is done by packaging the required resources along and with them in ways to provide value to those adjoining them.

Through the systems which have been created and obtained, along with the technological advances, eBay has created a wide array of websites to bring an incredible number of buyers and retailers into lots of marketplaces on a worldwide level. This makes them the world's major online market with 84 million lively users worldwide. The marketplaces are able to support more than a hundred million items on any given day through the addition of physical assets to technology and organizational systems. By growing an immense blend of facilities, eBay has the resources to take care of large amounts of data and IT support. As well as the strong marketplace division at eBay, payments and communications make up its success. PayPal and Skype as organizational resources offers eBay the ability to develop communication between users as well as making payments secure, easy and quick to receive and send obligations online. These tools raise the amount of business eBay can do and the number of customers it allures.

Innovation and technology has been used in order to create current market platforms which seek to bring clients and sellers jointly through fully automated and easy-to-use online sites that are available 24 hours a day, seven days a week, from anywhere in the world anytime.

Working as an online company has allowed eBay to save lots of costs which are normally presented by brick-and-mortar businesses. It has given them the capability of offering clients and sellers lower fees than traditional intermediaries.

A large component of the success eBay has received is through its reputational resources. By keeping a good name using its customers, they continue steadily to return and recommend others. eBay has used the road of combing technology, invention and reputation to make a system to match users needs and needs. The SafeHarbor program was executed in order to provide rules for trading and user dispute quality. The personnel investigates users' grievances of possible misuse of current market platforms and takes appropriate action, up to suspending users from bidding on or listing items on the market. Another innovation which was created with reputation is the Verified Privileges OwnerProgram. THE PROGRAM let us intellectual property privileges owners request removing listings that offer items or contain materials that infringe on the rights. This helps to protect community people from purchasing items that may be counterfeit or elsewhere unauthorized. More generally, technology, advancement and reputation have built personalized, accurate and well-timed support services to the city of users. Potential buyers and retailers can contact eBay through a variety of means, including email, online text message talk and also by cell phone. Resources are focused on improving convenience, increasing capacity, expanding category-specific support, increasing online self-help features and improving systems and techniques in order to provide effective and effective support.

Company Value String

Primary Activities

Raw Materials

Being a technical e-commerce founded company eBay hails from computer coding and software to build up its company's requirements. Furthermore to these solutions, electricity is essential to aid all functions within the development stages of the merchandise.

Inbound Logistics

eBay includes technical system development to aid their services. These technical systems began by using simple coding and have since required the development and development of personal computers. The requirements have included the utilization of data management systems to take care of the large amount of data which can be used in the creation and support of eBay marketplaces. Servers are had a need to store this data and also back-up machines to be utilized in the case of system accidents. Also needed is obtaining repository software through a third party vendor, Sun Microsystems. The assortment of these logistics provides a backbone for the operations that will be completed in the ultimate product.

Outbound Logistics

The end of procedures brings in the outbound logistics of the business. In eBay's case this presents finalization of bringing together suppliers and purchasers and the control of payments.

During the outbound logistics period, suppliers and purchasers enter an order contract which commits the other person in to the purchase. eBay facilitates this step through administering the communication between each party.

Handling obligations from buyers involves the use of eBay owned PayPal, to transfer money directly from buyer to seller, while making payment for usage back to eBay. PayPal permits individuals and businesses to securely, easily and quickly send and receive repayments online in about 190 market segments worldwide. The other aspect of repayments which eBay owns is the utilization of Bill Me personally Later, allowing online U. S. vendors to offer, and U. S. consumers to obtain, credit for the purchase at point of sales. These financial tools have given eBay a financial network to support global, real-time payments.

Marketing and Sales

Market and sales straight completed by eBay is on a broad level in order to acquire both new potential buyers and suppliers. They also offer their customers a way to market and sell their own products by using their marketplace.

They immediately market and sell their product through the use of product differentiation, such as sale, and the utilization of special offers. These appear through marketing campaigns in the U. S. and rates promotions within the website to operate a vehicle traffic and continue the development in the amount of products detailed and purchased.

Providing products and services for the utilization of customers also promotes the eBay name, within an indirect manner. Marketing in this way adds into advertising which is eventually received by the company, and aids in the sales of products within the marketplace.

Customer Service and Retention

In order to stay successful and keep market show in the catalog and mail order business, customer support and retention is a key function of eBay's business. That is facilitated through the use of feedback message boards and the use of several features included into the platform to get trust and commitment of the customers.

The feedback community forum motivates users to provide opinions ratings and remarks on other users with whom they trade. It requires responses to be related to specific transactions and provides a simple tool for users to complement specific deals with the user names of their trading partners. These details is documented in a profile which includes a feedback score for the user, with feedback sorted regarding to if the responses has been provided over the past month, half a year or twelve months. Users who develop positive reputations have color-coded legend symbols viewed next with their user names to indicate the number of positive feedback rankings they have received. As a customer-focused company, eBay no more allow sellers to leave negative feedback for buyers, but do give them the tools made to avoid negative reviews.

The other areas of value for customers will be the creation of trust and safe practices features integrated to the system. These include the Safe Harbor Program and Verified Protection under the law Owner Program, CUSTOMER CARE and Value-Added Tools and Services, as well as Devotion Programs, such as PowerSeller, top buyer and coupons and buyer rewards. These features are designed to make users more comfortable dealing with unidentified trading companions and concluding commercial transactions on the internet which is often a demanding idea.

Helping Activities


eBay's activities within procurement require creating systems for suppliers to reach your goals in their use of the marketplace platform. They complete activities in order to take the inputs needed for the company's products. In this case computer servers, data source systems and IT software is blended to create a strong online marketplace.


Engineering is a solid focus at eBay to be able to reinforce its development and technical development. Within the e-commerce industry this emphasis in necessary to keep the benefit on new entrants wanting to enter the marketplace and also those that already are present. Research and development totaled $736M for the 2008 yr and this applies to new product design, product updates and services improvements to the web site.

Human Learning resource Management

eBay currently holds a experienced management team under the control of the newly appointed CEO John Donahue. Donahue's forerunner was the popular Meg Whitman who got many successes after her introduction at eBay in its baby stages. Whitman had taken the company consumer and through many successful years she was able to create a highly effective executive work force which was designed to last.

The employees at eBay are extremely well taken care of, and this is an area of satisfaction for the business. Fortune has outlined eBay as the 83rd best company to improve in its 2009 100 Best Companies to BENEFIT edition, and in 2008 it was placed 68th. With out a large make of real human capital eBay would not have the ability to function. The give attention to employee satisfaction and attitudes is important to attain the success of the company. This occurs throughout the company and even in the hardest times. Recently eBay was pressured to layoff employees due to the economic circumstances and paid out handsome severance deals to those who were compelled to leave.

Company Infrastructure

eBay, being an online company in addition has advanced their infrastructure online as well. Financially, all reports are often accessible through the business website along with mass media on quarterly statements and company revisions, available for all to gain access to. These display the structure which has been applied both financially and executively to be able to aid their company goals and vision. This business is also susceptible to government relations dealing with issues of regulations and eBay has a technique to deal with these government associations. Finally, an important detail in today's marketplaces includes the development and advertising of environmentally ecological actions. eBay considers this as a need to provide back to their neighborhoods through various community wide and broad activities to aid environmental friendliness.

SWOT Evaluation

A SWOT research of eBay was ready to examine what the company does well and what aspects may need some attention. Also, eBay has many opportunities that are available to them in the foreseeable future. Just like any business though they actually have threats which could pose an issue for these people. Some of the main talents with their company are the variety of products offered, their customer support, and a tremendous global reach. Although they do not have lots of weaknesses eBay should still focus on keeping against the law activity to a minimum on their site. Also, they ought to look at Amazon. com. com to help provide better product descriptions for their customers.

eBay must continue to look for opportunities to extend their company in the foreseeable future. The changing lifestyles of people can be an chance for eBay to permeate the market even more and broaden their customer bottom part. Also, eBay should look at other online auction sites for possible acquisitions or partnerships. eBay must continue to increase internationally to keep the number one place in this market. Threats to eBay's reign are the continual progress of Amazon. com. com and also thievery within their own site. eBay should keep a detailed eye on dangers to their company and do what they can to make them opportunities for change.


If the web has torn down so lots of the traditional obstacles that prevented businesses from becoming successful, why is making money online so much harder than doing business in "real life"?

Well, strangely enough, the lack of barriers is truly a disadvantagesince it pushes more competition into your market. This actually helps it be HARDER to conduct business online, alternatively than EASIER.

Also, you must retain in mind that if you undertake become successful, other people will get started to duplicate you. . . or even automate your strategies! If you haven't properly defended your position, they can quickly move in to drown out your lead generation channel. We see this every day with successful online start-ups.

This is particularly true of business models that count heavily on PPC, SEO and Social Media marketing.

You can protect your situation by firmly creating a sustainable competitive advantages for your business. Since almost all of your rivals will be mainly concentrating on easy sales and low-hanging berry, you can intentionally go after markets that provide very difficult barriers to admittance.

For example:

  • You might try exclusively targeting large companies. (Requires usage of hard-to-reach high-level decision designers)
  • You could get a celebrity to endorse your enterprise in trade for equity. (This would give you access to a market/supporter base that your rivals can't reach)
  • You might make an effort to get highlighted on national television set or in major newspapers & journals. (GoldenPalace. com has done a congrats with this)

All of these strategies have 2 things in common. They are extremely difficult to implement, and nearly impossible to copy once you've got first-mover advantage. These are all long-term sustainable competitive edge.

But once you attain this position, it is rather easy to keep it.

These lasting competitive advantages tend to be all-or-nothing propositions. You have to commit to your plan and follow it through all the way. You either make it big or fail in breathtaking fashion.

Unlike with SEO, your competitors will never be able to retain a team of off-shore workers to knock you out of your lasting competitive advantage. You'll be securely protected, with unique usage of a lucrative customer platform.

Let's look into ebay internet company with true ecological competitive advantages:

Ebay is not only an online auction site. They've invested heavily in building a strong existence as a community innovator in several niches. They don't really just build customers, they cultivate long-term associations.

Sure, ebay is the traditional online marketing programs are great for generating leads. If a company is serious about long-term success, you need to pick a strong, focused position and simply do it now. Throw all your energy into being the best at something that your visitors care about, and this your competitors will not be able to duplicate.

Process 2

eBay's strategy is a global one, given the actual fact that they contend in both home and international markets. The business's corporate strategy includes the ideas of extending services and the trade program, building the markets, boosting its current services, and fostering community affinity within eBay. These components of the organization strategy were made to figure into the companywide idea that packages the criteria for the business enterprise.

eBay's business strategy uses broad differentiation to catch the attention of customers. The business's goal is to stand out as a innovator in the industry, providing unique services and opportunities because of its customers. Two of these services that are keys in eBay's differentiation procedure are My eBay and About Me. eBay also endeavors to differentiate itself from its competition by setting up a user-friendly and even more reliable site.

The business design employed by eBay is dependant on the belief that the business should act as a support system responsible for keeping a trading environment that is effective and attractive to sellers and purchasers. eBay's business design has trust and basic safety programs, cost-effective and convenient services, and the beliefs of strong community affinity to help it act as a facilitator of trade. The business model developed by eBay allows the business to create forth the ways that it will continue on its goals for customers and the business alike.

A weighted competitive durability assessment of eBay and its own competitors uses the main element success factors of the industry and weights those to determine a company's status within the industry. Five of the eight key success factors were given a weight of 0. 15, the highest rank, while a network of clients and sellers was given the cheapest weight of 0. 5. eBay received the best score accompanied by Amazon and Yahoo.

Financially eBay has been almost actually an right away success. Its current percentage percentages, which have been above 300%, peaked in 1999 credited largely due to an extremely successful second offering of stock that produced and additional $600 million in capitol Although eBay experienced a lesser then average return on total belongings in 1999, most likely because of the second release of stock, the company has enjoyed a good come back on total resources from 1996 through 2003. This implying that eBay has the capitol to purchase itself, and/or further integrate vertically.

A tactical group map shows the placement of the companies within an industry when it comes to two main categories that competitive companies are likely to own. The two proficiencies that are important within the online public sale industry are a strong amount of security for consumers and a feeling of community within the trading environment. eBay has both a high amount of security and sense of community, putting it in the best position on the map in accordance with its opponents. Amazon is eBay's most crucial competitor, with setting just just a bit below eBay, while BidVille and ePier end up being minimal significant competitively.

The key strategic issues that face eBay result in recommendations for the business. Our first advice for eBay is to use benefit of the growing internet usage happening in international market segments. Expanding countries are discovering a significant growth in internet utilization; therefore, eBay needs to explore the opportunities these markets provide. By advertising and creating partnerships with local portals, eBay can build itself as the industry standard in the online auction industry.

A second recommendation that we have for eBay is devoted to its romantic relationship with large commercial sellers. Firms have expressed dissatisfaction with eBay's fairness insurance plan that does not supply them with extra incentives. We suggest another community within the eBay site which allows professional organizations to conduct business-to-business trades. By creating a particular site for these users, eBay is not alienating its great buy hunters, hobbyists, enthusiasts, small professional buyers, casual vendors, and hobbyist and collector retailers, and it is not compensating its fairness insurance plan.

Our final recommendation for eBay is good for the company to explore its options with vertical integration. eBay's founded brand and reputation make it a significant to be looked at. We recommend for eBay to assimilate into the transport aspect of the buying and selling experience. A perfect collaboration would require all eBay customers and sellers to use UPS as the primary shipper in every geographic locations where UPS can be obtained. This partnership would provide bonuses for eBay as well as advertising opportunities on the eBay website for UPS. eBay would share in a percentage of the gains resulting from UPS shipments of eBay products in return for guaranteeing a degree of product to be shipped. UPS would be ensured of a certain level of shipment and would then acquire complementary advertising on the eBay website to encourage users to work with the service even though not transacting on eBay.

eBay happens to be the first choice in the web auction industry; however, it is important for the company not to lose vision of its goals and opportunities. The business must continue to update and reinforce its strategy, improve upon its weaknesses, and take advantage of its opportunities. eBay must compare its position on the market by utilizing a proper group map and competitive power assessment to observe that its still at the top. Finally, by taking into consideration the previously stated suggestions, eBay will are capable to keep its position as the industry innovator as well as the financial support to consider new horizons.

There is no doubt that eBay supports the power in the web auction industry. An examination of the main element factors of their company was put together to learn what the eBay strategy is, and how they are really doing fiscally. Also an internal analysis of their advantages and weaknesses and an exterior analysis of these opportunities and dangers have been provided. Finally, a strength assessment of the main competitors in the web public sale industry has been identified to see how strong each competition is. From its beginning in a SAN FRANCISCO BAY AREA living room, eBay has grown to maintain a league alone.

Analysis of eBay's Strategy and BUSINESS DESIGN

Before eBay could start to compete in the online auction industry a technique and business design would have to be developed. eBay needed to define the businesses they would be competing in and exactly how they would be competitive in those specific businesses. In addition they needed to determine how they might be a successful service to their customers.

Corporate level strategy

eBay's corporate and business level strategy was to become varied business. They wanted to diversify not only the merchandise they offered but also their customer base and global reach. By using the eBay service you will get virtually whatever you want for.

eBay is an extremely diverse company. The service they provide is attractive to both individual customers as well as large corporate and business customers. Hobbyist and enthusiasts, casual vendors, professional customers, and corporate vendors all participate in the eBay customer base. The merchandise that exist on the eBay website range from shoes to cars. This makes their product line very diverse as well. The creation of eBay motors, eBay Real Estate, and the LiveAuctions niche site, as well as the acquisition of Fifty percent. com have all contributed to the development and diversification of this company. Furthermore to diversifying their customers and their products, eBay has extended their business by branching out into home markets as well.

Business Level Strategy

eBay competes in the web auction industry by using a extensive differentiation strategy. Although they might not exactly be the most inexpensive online auction site, they have got the major variety of products offered. In addition they appeal to a more substantial group of people that include individual retailers, small business owners, and corporations all around the globe. eBay achieves broad differentiation through their strong eBay community, a global reach not matched by any competitor, and a category period of 27, 000. These areas of the eBay service amongst others established their company in addition to the leftovers. Customers see the value in using the eBay service. This is why eBay is becoming so successful.

eBay competes in the web auction industry utilizing a broad differentiation strategy. By choosing this strategy eBay identified that the best way to achieve a lasting competitive benefit over its competitors was to distinguish their service. The way in which eBay has place their online public sale site apart from its competition has lead customers to choose their site over other online auctioneers and retailers

eBay's Large Differentiation Strategy

eBay has created a one-stop-shopping experience that is appealing to large corporations, impartial entrepreneurs, and specific buyers and sellers. They have created value through many facets of their business that charm to their customers and differentiate them from your competition. The primary ways that eBay differentiates themselves is through:

1. Variety of products offered

When customers visit eBay they can search for nearly any product. eBay has a category variety not matched by any competition with over 27, 000.

2. The eBay Community

eBay wants their customers to feel just like they are an integral part of a community. This community feel provides customers the sense that they are branch of something and cared about. By showing the clients that their feedback, opinions, and thoughts are important eBay has gained remarkable ground with the customers.

3. The eBay Website

eBay has created an public sale and retail website that is unique and interesting. This creative site places them apart from their rivals. The site is established numerous facets that reach a wide span of browsing buyers and vendors. The website is also engaging and easy to use so that it is very attractive for online shopping and trading.

4. The eBay Brand Name

eBay was the inventor of the web public sale industry. When customers think of online buying the immediately think of eBay. This has given them a competitive gain that sets them apart from other online auctions.

5. eBay's Global Reach

The global reach of eBay is not attained by some other online public sale site. For large businesses international selling and buying is done everyday. Even for an individual buyer or seller, getting the option of looking throughout 150 countries with a course of 94. 9 million users is very appealing.

Why the Differentiation Strategy IS MOST EFFECTIVE for eBay

The users of eBay have many different personal preferences and needs depending on why and exactly how they use the service. eBay has decided ways to fulfill their customers whether they are large businesses or individuals. By offering a wide variety of products, globally growing, and building a community for those customers to become listed on eBay has generated a unique value unmatched by its rivals.

eBay's Business Model

eBay's business design was based on creating and maintaining a person-to-person trading community. After implementing their model, eBay has been able to build proper partnerships, continue steadily to make impressive changes and improvements, and keep an eye on its interior and external surroundings for possible future opportunities. It has given them the prestige of being the world's largest online auction company.

Research of eBay's Business Model

eBay's business design was based on creating and maintaining a person-to-person trading community. This enables purchasers to easily seek out what they would like to purchase. In addition, it allows sellers to post their items minutes after they have listed. There are many specific components of eBay's business model that they named key to its success they are really (as given in the event study):

  • Being the most significant online trading website with a crucial mass of customers, vendors, and items shown for sale
  • Its compelling and interesting environment, which experienced strong values, founded rules and types of procedures that facilitated communication between purchasers and sellers
  • Creating programs such as Safeharbor to assist in disputes also to punish users who violate eBay
  • Affordable and convenient trading
  • Strong community affinity
  • An intuitive interface that was easy to understand, arranged by issues, and totally automated

By putting into action their business design, eBay employed three main tactics. First, they appeared to build tactical partnerships. Second, they viewed for customer feedback to constantly make changes and advancements. Finally, they supervised its internal and external conditions for possible opportunities. By doing many of these things, eBay could adjust to the changing ways and keep their customers satisfied. To be successful eBay must continue steadily to mold and change their business model to fulfill its customers and keep carefully the level of quality they employ to the best degree possible. If eBay is able to do this they will continue being successful.

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