Ebay Case Study

Case Analysis

eBay in 2002: The Challenges of Sustained Growth

Tables of Content

IDENTIFICATION 3

OVERVIEW OF THE SITUATION 3

EBAY’S CURRENT STRATEGY 5

ANALYSIS AND EVALUATION 7

COMPETITION ANALYSIS 7

FINANCES 9

MARKETING 12

OPERATIONS 13

MANAGEMENT 13

COMPANY’S VALUE CHAIN 14

SWOT ANALYSIS 14

KEY ISSUES 15

ALTERNATIVE SOLUTIONS …………………………………………………………….. 16

RECOMENDATION AND ACTION PLAN……….………………………………….. 17

Identification

Overview of The Situation

eBay, an early pioneer of a particular kind of e-commerce that is online auctions. Established in mid-1990’s and transformed to public company in 1998, eBay provided trading platform in online marketplace and acted as facilitator providing pre- and post- value added services for three basic categories of online auctions:

• Business-to-business auctions: businesses, which trade with other businesses in order to sell merchandise surplus, used equipment or high-tech production.

• Business-to-consumer auctions: businesses selling goods and services directly to their consumers via Internet.

• Person-to-person auctions that gather small sellers and buyers in a virtual face-to-face trading place.

Since 1995 eBay experienced phenomenal popularity and substantial growth and met the new millennium being the largest Internet auction platform, which in 2001 served 42,4 million registered users and facilitated 423 million listed auctions globally:

• U.S. e-commerce

• Europe (U.K., Belgium, Brazil, Italy, France, Netherlands, Portugal, Spain, Sweden)

• Asia/Pacific region (China, South Korea)

• Latin America (Argentina, Chile, Colombia, Ecuador, Mexico, Uruguay, Venezuela)

Such growth (illustrated in Table 1. and Graph 1.), was caused by several factors:

• High-Tech availability to ordinary user resulted in growing Internet usage

• Advanced technologies enabled eBay to offer new attractive services as for loyal users as for new ones (industries)

• High-Tech decreased amount of server breakdowns

• Improved security built trust

• Expansion to the global market and purchasing locally popular e-commerce providers (Internet Auction Co., iBazar, Half.com, and other local trade platforms)

Table 1. Six Year Summary of eBay Usage Growth.

1996 1997 1998 1999 2000 2001