eBay is the dominant online auction and shopping platform. It has a global reach with over 100 million registered users worldwide. While it faces competition from Amazon, Yahoo Auctions, and others, eBay remains the leader in the online auction space due to its large customer base, brand recognition, and variety of goods available on its platform. However, eBay also faces challenges such as fraudulent activities, system breakdowns, and attracting more buyers relative to sellers. Overall, eBay has a strong market position but will need to address problems and adapt to changing market conditions to maintain its leadership role.

1. EBAY: IN A LEAGUE BY ITSELF
1

2. GROUP MEMBERS
• Farah Naz
• Sidra Kousar
• Javeria Mehmood
• Faiza Tariq
2

3. SLIDE LAYOUT
• Introduction
• Ebay business model
• Competitors
• Present and future problems
• Internal audit
• External audit
• Swot matrix
• CPM
• Space matrix
• Grand matrix
• Conclusion
• Recommendations
• Current position
3
• References

4. INTRODUCTION
• eBay Inc. is an American internet consumer to
consumer corporation
• An online auction and shopping website
• Founded in 1995
• Pierre Omidyar, the founder of eBay
• Headquarter San Jose, California, U.S
• Today, the eBay community includes more than
a hundred million registered members from
around the world.
4

5. E EBay’s Mission Statement
“eBay's mission is to provide a global trading
platform where practically anyone can trade
practically anything”
5

6. WHAT THEY SELL!
• Millions of items listed on eBay
• eBay used to buy and sell items in thousands of
categories
• Collectibles like trading cards, antiques, dolls,
and house wares to practical items like used
cars, clothing, books and CDs, and electronics.
• Auction-style format or a fixed price through a
feature called Buy It Now.
6

7. WHERE ARE THEY…
• Currently, eBay has local sites that serve
Australia, Austria, Belgium, Canada, France,
Germany, Hong Kong, Ireland, Italy, Malaysia,
the Netherlands, New Zealand, the Philippines,
Singapore, South Korea, Spain, Sweden,
Switzerland, Taiwan, the United Kingdom, and
the United States.
7

8. IN STARTING….
• Initially conceived as online marketing place
• Person to person trading community
• 94.9 million registered users from more than 150
countries
• Registered users ranged from school, college
students to Fortune 500 companies such as
IBM, government agencies e.g. U.S Postal
Service
8

9. KEY SUCCESS FACTORS
IN ONLINE RETAILING
• Challenge is to generate traffic on website
• Tactics used to generate traffic were:
• Partnering with search engines
• Direct e-mails
• Online advertising at portals
• Print and television media
9

10. CONT…..
• Providing extensive product information
• Easily navigable site
• New things happening on sites, to keep
customers coming back
10

11. ONLINE AUCTIONS
• Endured through out the history
• Convenient way to find a buyer
• Collect difficult-to-find items
• Purest markets, buyers and sellers arrive at a
mutually agreeable price
• Works in the same way as traditional auctions
11

12. CATEGORIES..
• Business to business auctions
• Business to consumer auctions
• Person to person auctions
• eBay is pioneer of person to person online
auction
• 6.5 million customers used online auction in
2002, Forrester Research
12

13. WAYS TO GENERATE
REVENUE
• Charging sellers for listing their goods/services
• Charging a commission on all sales
• Selling advertising on their websites
• Selling their own new or used merchandise
• Selling their own goods or allowing other sellers
to offer goods in fixed price format
13

14. AUCTION TYPES
• Auction-style listings:
Allow the seller to offer one or more items for
sale for a specified number of days. The seller
can establish a reserve price
• Fixed price format
Allows the seller to offer one or more items for
sale at a Buy It Now price. Buyers who agree to
pay that price win the auction immediately
without submitting a bid.
14

15. ONLINE AUCTION USERS
Six categories
• Bargain hunters
• Hobbyist/collector buyers
• Professional buyers
• Casual sellers
• Hobbyist/collector sellers
• Corporate and power sellers
15

16. EBAY AUCTION WORKING
• Users registration
• Users provide both credit card number and bank
account information
• Single bid or automatic bidding (proxy bidding)
• Insertion and final value fee for sellers
• Auctions fees different for different goods
16

17. EBAY ACQUISITIONS
• The Gifts Project, Group purchasing of gifts
• Milo.com, Shopping Engine
• Magneto, Electronic Commerce
• Skype limited, voice over internet protocol
• PayPal, Ecommerce payment systems
• Butterfield & Butterfield, Auction house
• Half.com, fixed price format
17

18. PAYPAL
• Safe, easier way to pay online
• Pay without exposing credit card numbers to
merchants
• 100% protection from unauthorized payments
• 24/7 monitoring to help prevent fraud
• One account and one password
• No need to retype credit card information
18

19. FEED BACK FORUM
• 1996, eBay pioneered a feature called feedback
forum
• Build reputation with in its community
• Comments about trading partners
• Helps in overcoming hesitance about trading
over internet
• February 9,2004, additional feature of
withdrawal of feedback comment
19

20. EBAY BUSINESS MODEL
• Model was built around three profit centers
• Domestic business( auction operations with in
U.S)
• International business( auction operations
outside U.S)
• Payments (e.g. PayPal)
• 2003, 31.7% revenue growth from U.S
operations
• 34.6% international share
• 33.8% from payments
20

21. ELEMENTS OF BUSINESS
MODEL
• Largest online trading forum
• Compelling and entertaining environment
• Trust and safety programs e.g. Safe harbor
• Cost effective, convenient trading
• Strong community affinity
• Intuitive user interface, fully automated
21

22. EBAY STRATEGY
EBay's strategy to sustain growth rested on five
Elements:
• Broaden existing trading platform
• Foster eBay community affinity
• Enhance features and functionality
• Expand value added services
• Continue to develop U.S and international
markets
22

23. STRATEGIC ALLIANCES
Impressive portfolio of over 250 strategic
Alliances:
• America Online (AOL)
• Yahoo
• IBM
• Compaq
• Walt Disney
23

24. CONT…
For value added services:
• Leading shipping services (USPS and UPS)
• Tradesafe and I-Escrow
• Mailboxes
• iShip.com
24

25. COMPETITORS
Main competitors of eBay are:
• Amazon.com Auctions
• uBid.com
• Yahoo Auctions
25

26. AMAZON.COM
Strategy is to
“ be the world’s most customer centric company
where customers can find and discover anything
they may want to buy online”
• Customer base of 35 million users in over 150
countries
• Created in July 1995
• Internet’s number one music, video and book
retailer
26

27. CONT..
International sites:
• www.amazon.de ( Germany),
• www.amazon.co.uk (United Kingdom)
• www.amazon.ca (Canada)
• www.amazon.fr (France)
27

28. CONT…
Strategic alliances:
• Border Books
• Ashford.com
• Drugstore.com
• CarsDirect.com
• Sotheby’s
• Co-branded toy and video game online store
with Toysrus.com
28

29. UBID.COM
Mission is to:
“be the most recognized and trusted business to
consumer market place, consistently delivering
exceptional value and services to its customers
and supplier partners”
29

30. CONT…
• They started consumer to consumer auctions
but discontinued in 2002, due to the costs
associated with fraud and concerns over product
quality
• Founded in April 1997
• 14.7 percent share of revenues in online auction
market
30

31. YAHOO AUCTIONS
• Launched in 1998
• User base grew from 120 million to 180 million
during 2000
• 2004, offered auctions in China through joint
venture with dominant Chinese web portal, Sina
31

32. PRESENT AND FUTURE
PROBLEMS
• Too many Sellers as compare to Buyers
• Security( of the auction process and payment)
• Fraud( through users in the auction process)
• Necessity to accommodate power
sellers( businesses)
• Changes in number of categories
• Expansion in terms of different types of sellers
• Apart from system related issues, integration of
professional sellers is most urgent issue
32

33. INTERNAL AUDIT
33

34. SWOT ANALYSIS
34

35. STRENGTHS
• Most well known online auction company in the
world.
• Recognizable Brand Name
• Over 250 Alliances
• Publicly Traded
• Partnerships with international companies
• Global reach
• eBay University
• Entertaining site
• Over 27,000 different categories
• Zero inventory held by company
35

36. CONT…
• No need for the traditional sales force
• Strong auction community of loyal customers.
• Excellent financial situation.
• Strong customer service.
• Percent of revenue in international markets
increasing significantly.
• Have a fair payment system that encourages
merchants to list products.
• Experienced management team.
36

37. WEAKNESSES
• Weak promotional and marketing activities
• eBay does not pay dividends on their stock
• Some customers feel the website is cluttered
• eBay’s position in the business to business
(B2B) market is weak.
• eBay has very little debt, therefore the company
is not taking advantage of low interest rates to
expand.
• eBay has a higher tax rate since they do not
take advantage of depreciation as well as other
companies.
37

38. CONT…
• The company relies too much on word of mouth
advertising, assuming everyone already knows
about eBay.
• Longer transaction times, since many merchants
will not receive payment until a buyers check
clears.
• Open to fraudulent activities
• System breakdowns could affects trading
activities
38

39. IFE MATRIX
39

40. INTERNAL STRENGTHS WEIGHTS RATING WEIGHTED SCORE
Well known auction company 0.1 4 0.4
Loyal customers 0.04 3 0.12
Financial situation 0.1 3 0.3
Fair payment system 0.03 3 0.09
Global market 0.05 3 0.15
Management system 0.1 4 0.4
Zero inventory 0.05 3 0.15
Customer service 0.03 4 0.12
International markets 0.02 3 0.06
Over 250 alliances 0.2 3 0.6
eBay university 0.2 3 0.6
Over 27,000 different 0.08 4 0.32
categories
TOTAL 1.0 40 3.31 40

41. INTERNAL WEAKNESSES WEIGHTS RATING WEIGHTED SCORE
Weak promotional and marketing 0.1 1 0.1
activities
Website is cluttered 0.08 2 0.16
Weak in B2B 0.2 1 0.2
eBay has very little debt, therefore 0.1 1 0.1
the company is not taking advantage
of low interest rates to expand
eBay has a higher tax rate since they 0.05 1 0.05
do not take advantage of
depreciation as well as other
companies
The company relies too much on 0.07 2 0.14
word of mouth advertising, assuming
everyone already knows about
eBay.
Longer transaction times, since 0.1 1 0.1
many merchants will not receive
payment until a buyers check clears.
Open to fraudulent activities 0.2 1 0.2
System breakdowns could affects 0.1 1 0.1
trading activities
41
TOTAL 1.0 11 1.15

42. EXTERNAL AUDIT
42

43. OPPORTUNITIES
• Changing lifestyles of people
• Acquisition of Yahoo.com
• Continued international expansion
• Increasing use of the internet
• Expand community services
• Foreign markets especially in Asia are improving
• Market development in new and emerging
markets like China and India
• Market penetration/ Improve market services in
current markets
43

44. THREATS
• Success attracts greater competition
• Attacks by illegal practices might happened
• Some cost like credit card charges cannot be
easily controlled by eBay
• Transportation systems could be poor
• Future taxation
• Fluctuations in currency and exchange rates
• Rapid growth of Amazon.com
• Increasing number of online stores
44

45. EFE MATRIX
45

46. OPPERTUNITIES WEIGHTS RATING WEIGHTED SCORE
Changing lifestyles of people 0.2 3 0.6
Acquisition of Yahoo.com 0.04 3 0.12
Continued international expansion 0.1 3 0.3
Increasing use of the internet 0.2 3 0.6
Expand community services 0.08 3 0.24
Foreign markets especially in Asia 0.1 2 0.2
are improving
Market development in new and 0.2 3 0.6
emerging markets like China and
India
Market penetration/ Improve market 0.08 3 0.24
services in current markets
TOTAL 1.0 23 2.90 46

47. THREATS WEIGHTS RATING WEIGHTED SCORE
Success attracts greater competition 0.2 3 0.6
Attacks by illegal practices might 0.04 3 0.12
happened
Some cost like credit card charges 0.1 3 0.3
cannot be easily controlled by eBay
Transportation systems could be 0.2 3 0.6
poor
Future taxation 0.08 3 0.24
Fluctuations in currency and 0.1 2 0.2
exchange rates
Rapid growth of Amazon.com 0.2 3 0.6
Increasing number of online stores 0.08 3 0.24
TOTAL 1.0 23 2.90
47

48. SWOT MATRIX
48

49. Strengths Weaknesses
Leading Global Brand for auctions Fraudulent Activities
SWOT Matrix Customer Relations Management System Breakdown on trading
activities
Known Generic Brand for e-commerce
Opportunities SO WO
Acquisitions provide new business Global Expansions Online Banking
strategic opportunities
Maintain simplicity of interaction with Diversify products
Market Development the online community’s capability
Systems for Online verification of
Market Penetration/ Diversification products
Strategic alliance with courier
companies
Penetration of all types of market
Threats ST WT
Attracts competition Acquisition strategy – global Alliance to postal services
expansion
Illegal Practices Authentication of consumers identity
Use online security options for
Credit Card charges not controllable
verification and authentication
by eBay
Reinforce marketing management and
systems
49

50. PROPOSED STRATEGIES:
• Market penetration
• Market development
• Product development
• Diversification
• Acquisitions
• Alliances
50

51. COMPETITVE PROFILE MATRIX
51

52. KEY SUCCESS WEIGHT EBAY WEIGHTED AMAZON WEIGHTED YAHOO WEIGHTED UBID WEIGHTED
FACTORS SCORE SCORE AUCTIONS SCORE SCORE
BRAND NAME 0.15 4 0.6 4 0.6 3 0.6 3 0.6
QUANTITY OF 0.3 4 1.2 3 0.9 3 0.9 3 0.9
BUYERS AND
SELLERS
CONVENIENCE 0.1 4 0.4 3 0.3 3 0.3 3 0.3
CUSTOMER 0.1 4 0.4 3 0.3 2 0.2 2 0.2
SERVICE
SPEED OF 0.05 3 0.15 3 0.15 2 0.10 2 0.10
TRANSACTION
ERROR RATE 0.05 2 0.10 3 0.15 2 0.10 2 0.10
LOW 0.1 2 0.2 2 0.2 2 0.2 2 0.2
INVENTORY/C
OST
GLOBAL 0.15 4 0.6 3 0.45 3 0.45 1 0.15
DISTRIBUTION
WEIGHTED 1 27 3.65 24 3.05 20 2.85 18 2.55
TOTAL 52

53. ANALYSIS
• eBay ranked ahead of all the others.
• ranked each category based on the information
provided to us in the case study.
• Three categories they were on top of; Quantity
of Buyers and Sellers, Brand Name, and Global
Distribution
• This analysis shows that a company does not
have to be better than its rivals in every
category, just as long as they are ahead in the
most important ones.
53

54. SPACE MATRIX
INTERNAL DIMENSIONS
54

55. FINANCIAL RATINGS COMPETITIVE RATINGS
STRENGTH (FS) ADVANTAGE (CA)
Return on 6
Investment
Market share -1
Leverage 2
Product quality -2
Liquidity 6
Customer loyalty -2
Working Capital 5
Technological -3
know-how
Cash flow 6
Control over -5
suppliers and
Exit from market 4 distributors
Competitors -2
Risks 4 capacity
Financial Strength 4.7 Competitive -2.5
average Advantage Average 55

56. EXTERNAL DIMENSIONS
56

57. INDUSTRY RATINGS STABILITY RATINGS
STRENGTH (IS) POSITION
Growth potential 5 Rate of inflation -1
Financial stability 4 Technological -4
changes
Rivalry among 4 Price elasticity of -3
competitors demand
Resource utilization 4 Competitive -4
pressure
Profit potential 6 Barriers to enter into -6
market
Industry strength 4.6 Stability position -3.6
average average
57

58. CALCULATIONS:
• X axis:
Industry strength + Competitive advantage
4.6 + (-2.5) = 2.10
• Y axis:
Financial strength + Stability position
4.7 + (-3.6) = 1.10
58

59. Quadrant 2 Quadrant 1
( Conservative) (Aggressive)
Quadrant 3 Quadrant 4
(Defensive) (Competitive)
59

60. PROPOSED STRATEGIES
• Market development
Company can develop its market, by moving into
China and India
• Product development
• Market penetration
• Diversification strategies ( Related & Unrelated)
• Integration strategies( vertical & horizontal)
60

61. GRAND STRATEGY MATRIX
61

62. • Four Quadrants
• Two dimensions
• X-axis:
Strong Competitive Position
Weak Competitive Position
• Y-axis:
Rapid Market Growth
Slow Market Growth
62

63. Rapid market growth
Weak strong
competitive competitive
Position position
Slow market growth 63

64. PROPOSED STRATEGIES
• Concentration on current markets and products
• Firms with excess resources can integrate
horizontal or vertical
• Intensive strategies
• Integration strategies
• Related diversification
64

65. CONCLUSION
• Company is in strong financial position
• Achieving its targets successfully
• Have acquisitions and alliances with different
companies to run effectively
• Expanding its value added services with the help
of PayPal, and other companies e.g. iShip.com
• Developing international and U.S markets
• Company is trying to stay in touch with
customers and hold group meetings known as
VOICE OF CUSTOMER.
65

66. RECOMMENDATIONS
• eBay must develop their strategies to ensure
great demand, high profit return and to meet
their target market
• Put up securities to ensure that no fraudulent
activities can happen through authentication and
verifications
66

67. Maintain global growth initiative
• Acquisitions (develop new markets)
• New markets
• New products
• Adopt into different cultures
Technological development
• Rapid application development
• Selling new applications/programs
• Creating standards for the industry
• Program interface and developers programs
67

68. Security
• Back up systems
• Online verifications
• Enhance trustee services
• Online banking improvements
• Enhance after sales services
Reinforcing the Marketing department
• Improve image through advertising
• Global branding to make eBay a generic brand
68

69. CURRENT POSITION OF EBAY
• In 2010, the total value of goods sold on eBay was $62
billion -- more than $2,000 every second
Q3 2011 Overview
• Revenue for the third quarter ended September 30,
2011, increased 32% to $3.0 billion, compared to the
same period of 2010.
• The company reported third quarter net income of
$490.5 million
• Since Q1 2007, the company's revenue from all sources
other than Marketplaces transactions has increased from
37% of eBay Inc.'s total revenue to 54% as of Q3 2011.
69

70. Strong Company … Getting Stronger
• $5.8 billion in cash and cash equivalents and
non-equity investments on balance sheet at the
close of Q3 2011
• $809 million in operating cash flow in Q3 2011
• $526 million in free cash flow in Q3 2011
70

71. REFERENCES
• www.ebay.com
• www.wikipedia.org/wiki/EBay
• www.ebayinc.com/history
• www.ebayinc.com
• www.google.com
• FeeUpdate2010.html
• http://www.ebayinc.com/content/fact_sheet/ebay
_inc_corporate_fact_sheet_q3_2011
71

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