EBay Essay Example Essay Example

EBay Essay Example Paper EBay Essay Introduction The company has now about a billion registered users and is the most popular shopping site on the Internet. EBay’s mission is to provide a global and economic segment platform where practically anyone can trade practically anything. It features a variety of international sites, specialty sites, and 50,000 categories of merchandise, and services that aim to provide users with the necessary tools for efficient online trading in both auction style as well as fixed price formats. Recently eBay added a Want It Now and Best Offer format providing new ways for shoppers to find and buy what they want on the website. Europe, Asia and cross-border trade are major areas of growth for eBay and an immense source of revenue. The firm offers localized sites in 24 countries. On any given day, millions of items are listed on eBay in thousands of categories. People from all over the world buy and sell on eBay (Hillier, D. , ; Slouch). EBay corporation has two core businesses, a payments busines s of which Papal is the flagship brand and platform and a marketplaces business of which the eBay website along with its various international versions are the flagship brand. While eBay formerly also had a third core business in the communications space with Keep, which it acquired in 2005 and built into a 500-million-user juggernaut, eBay’s majority stake in Keep was sold to a consortium of investors in late 2009, though eBay retains a minority interest in the platform. However, year over year growth has slowed, with an increasing proportion of overall growth coming from its payments business and an ongoing process of reorganization and strategic change coming to characterize the marketplace business. EBay Essay Body Paragraphs Some of the declines and difficulty in this latter sector are due to increasing competition from competitors, most notably Amazon. Com and Google. Recent economic conditions have also taken a toll, with revenue, refit, listing volume, and share price all falling through 2008 and into 2009 before something of a turnaround took hold on the strength of new strategic orientations both in core businesses and marketplace platform structure, pricing, and policy. 2. Considering the five (5) forces of competition, choose the ;o (2) that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past. The degree of rivalry among established companies within eBay industry is very high. This high degree of rivalry is very common in discount retail industry due to the high concentration on being the price leader. EBay competition is very broad and varies with each of its different products. EBay competes clos ely with many well know broad-based companies such as traditional department and general merchandise stores, as well as a large variety of online retailers. Due to this complex competitive industry, eBay must concentrate on many competitive factors such as: ability to attract buyers, volume of transactions and selection of goods, customer service, system reliability, brand recognition, and many others to keep their edge. The bargaining power of buyers is low because the seller sets the prices of the products and because a majority of the sales are in an auction platform. This gives eBay and the buyer less control of the products prices, but in most cases the large amount of sellers per product keeps the prices low and competitive. The buyers benefit from the competition of the sellers, convenience Of a trade environment, and not on the power Of price bargaining. The bargaining power of suppliers is relatively high because eBay must keep its fees and commissions low in order to attra ct and keep loyal sellers. Sellers re the suppliers of the products and are able to pick from different auction companies and select one offering the lowest fees and commissions. 3. With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future. The risk of entry by potential competitors is relatively high due to low barriers to entry. New competitors can launch new sites at a nominal cost using commercially available software. This low barrier to entry will cause competition to intensify in the future. Also due to the broad range of products sold at eBay there is any more opportunities for new competitors to enter in more specific market segments. 4. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify your answer. EBay’s core bu siness of online auctions is struggling. Traffic has dropped as consumers favor websites with set prices, such as Amazon. Com and Walter. Com. The biggest issue eBay faces is that consumers have other e-commerce alternatives, including Amazon. Com and Busty. Mom-especially for mainstream retail goods, which now represent 50% to 60% of eBay’s product mix. With eBay extending its platform into fixed price sales, it was also petrified that Amazon might buy half. Com instead, which would have propelled the retailer’s growth from e-commerce into a virtual network. The acquisition has enabled eBay to develop its fixed price model, with many auctions advertising a â€Å"buy-it-now† option. As long as eBay management continually takes their pulse and monitors their temperature, the health of the marketplace will be maintained. Attack by illegal practices is threat. As with weaknesses above, the brand is attacked by unscrupulous individuals. For example e-mails are sent to unsuspecting prayers pretending to come from eBay. Logos and the design of the pages look authentic. However they are designed so that you input private information that the thieves can use to take passwords and identifications. This something to look for! 5. Your opinion on the corporation’s greatest strengths and most significant weaknesses. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the reparation should select to fix its most significant weakness. Justify your choices. EBay’s technology, it couldn’t cope with the volume Of traffic and desperately needed to be upgraded. The site kept on crashing, and some auctions were taking as long as 24 hours to upload. The owners tried to shut things down for a while. Bay is the leading global brand for online auctions. The company is a giant marketplace used by more than 1 00 million people to buy and sell all manner of things to e ach other. Pierre Midair, a French entrepreneur, was just 28 when he sat down over a long holiday weekend to rite the original computer code for what eventually became an Internet misbrand. The brand has grown tremendously. The organizations works tremendously hard to overcome fraud. However, the eBay model does leave itself open to a number of fraudulent activities. Often the company deals with such activities very quickly. Fraud includes counterfeit goods being marketed to unsuspecting (and suspecting! ) prayers. Other forms of theft could include the redistribution of stolen goods. It should be pointed out that fraud and theft are problems with individuals, not eBay. The weakness is that unscrupulous individuals can exploit the ICC business model. Y over the decade or so since its conception. 6. Determine the company’s resources, capabilities, and core competencies. In Order for the business to be successful, workers with certain skills, or capabilities, must be available. This is important for two reasons. First wages are usually the highest expense of a business, as much as 70% of the budget of an organization with low capital requirements (e. G. An accounting or legal firm). Second, capable workers may not always be available, which may lead to the issue of outsourcing, as discussed in a following section. Many would argue that, originally, eBay’s core competency was their innovative idea to offer auction services online as well as the technology to do so. However, auction services are now easily duplicated and are available on many different sites hoping to cash in on the eBay phenomenon. Today, eBay’s core competency seems to be their name recognition and high website traffic. The large amount of traffic to eBay brings a large number Of sellers and buyers together so that an extremely large array of common and rare products can be found for purchase. Although nearly anyone today can copy Bay’s functionality, few have the mar keting resources and well know name to really draw a crowd. 7. Analyze the company’s value chain to determine where they can create using the resources, capabilities, and core competencies discussed above. Porter’s basic model describes an industrial organization buying raw materials and transforming these into physical products. It can be extended to someone who buys a product and makes changes thus adding â€Å"value† to the item for resale. (Such as an airbrush artist who buys a tee-shirt, sprays on a design and then sells the result for higher than the cost of the T-Shirt. If you want to be part Of the â€Å"value chain† you need only find a product to create, and being buying the materials to produce it. Board members of EBay usually paint a pretty picture for their earnings forecasts. The reality is that competitors are multiplying and those that use free as a business model may legitimately capture market share. In order for EBay to remain on top o f the internet auction industry they need to reduce the price to exchange items on their system thereby increasing the value of their value chain. The direct result of this action will be much higher traffic and brand loyalty. Traffic can be motorized using highly targeted advertisements through Google ad sense or an internal advertising program. We will write a custom essay sample on EBay Essay Example specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on EBay Essay Example specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on EBay Essay Example specifically for you FOR ONLY $16.38 $13.9/page Hire Writer