Case Study: Ebay

Introduction/Summary

eBay is synonymous with internet commerce. The website offers no product, only an e-commerce platform that aligns buyers and sellers. eBay gains it revenue by charging a fee to the seller to post a product, sell the product and merchant fees for the product (if the buyer chooses to use the PayPal option). eBay is based out of San Jose, California and half of their users are outside of the United States. Per the website, eBay operates sites for 28 countries. The estimates are quoted to have international revenues surpass US revenues in 2005 (Schoenfeld).

Case Analysis

In order to grow the business to 27 sites outside of the US in just 5 years, eBay created a playbook. This playbook allowed eBay managers to reference the right conditions for their scope. The scopes included product management, web development, and internet marketing to name a few. Sharing information of various scopes and countries in the playbook gave eBay a competitive edge in the marketplace. The first stop was Germany, were after acquiring an existing site and converting it to eBay there were a flew glitches. These glitches were fixed and the different needs of Germans to Americans were documented and could be used for future country releases as eBay focused on international growth. In 2006 German growth was slowing and some $4 billion Euro ($5.6 billion US Dollars) in private goods were sold on eBay (Belson).

This playbook would prove not to be fail safe. After launching in Japan, eBay stopped operations two years later since they were in fourth place as an intent auction provider. Years later eBay would also close China and Taiwan, though they are accessible from the eBay home page, the sites are operated by other companies. One page missing out of the playbook is do some comparison shopping on your competition abroad. "EBay's first mistake in the Japan market was coming in late. And when eBay Japan did launch--five months after Yahoo Japan--it charged a commission for each transaction. Yahoo Japan doesn't" (Li).

Recommendations

Without having direct access to eBay’s playbook one can only guess what information it contained. It is essential to have an online collaboration site where employees from all countries can share knowledge. eBay learned there is more to success than having regional differences in each countries layout and search engines. It had to be the best. When entering the marketplace with the same service that your competitor already offers and then charging high fees on top of it, will become troublesome to transition new users to your site. It is recommended that in addition to the regional and cultural differences that vary from country to country a complete analysis’s of what currently exists is completed.