The Challenges Facing Ebay in 2008 - Time for a Change a Strategy?

The Challenges Facing eBay in 2008:Time For A Change A Strategy?

Part 1: OVERVIEW OF THE SITUATION

eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide.(Wikipedia,2010). In early 2008, the company had expanded worldwide, there are millions of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous items are listed, bought, or sold daily. The eBay company not only allowing everyday consumers to purchase and sell items, but it also allowed big companies to clear up their stock to bargain shoppers. EBay has become a serious competitor in the traditional e-tail environment and make their own culture of ‘e buying' which is synonym with the company name.

The acquisition of PayPal the secure online payment system on July 8, 2002 increased the confidence of customer to the ebay products and services. The acquisition with skype also provided direct communication between buyers and sellers and created two way communications to negotiated about the price. eBay has also created alliances with companies that help to maintain customer satisfaction. Tradera and iBazar have both partnered with eBay to make sure that all customers get what the pay for.

Maintaining their place has become a recent challenge because eBay is currently facing stiff competition in the online auction market. Some of the competition that eBay is up against are sites such as Yahoo Auctions, Overstock.com, Craigslist, Google, Amazon.com and uBid.com. eBay is now facing competition with other electronic site such as e retailing and million of business on line . Moreover, eBay is not a free site. Sellers are charged monthly fees, which in turn can drive up the cost of the items being sold. Sites such as Craigslist are completely free, increasing its popularity everyday based upon the fact that there are no fees to utilize the site, the site is more local selling merchandise to consumers who are near the item, so shipping costs are minimal. This also allows the consumer the option to pick up items much faster. In addition, the international delivery service for Amazon.com was only 2 to 3 business days (amazon.com) compared with ebay which take 5 to 6 business day(ebay.com). The problem that eBay faces currently is creating a business plan to maintain their position as the leader in the online auction industry while establishing a place as a retailer of choice in the fixed price e-tail market and continuing to exceed profit levels.

Part 2: ANALYSIS AND EVALUATION

a) EBAY STRATEGY MAKING AND STRATEGY EXECUTING PROCESS

This model becomes guide by how companies create strong capabilities by prefers 5 phase. These phase enable firm to ensure performance, quality, capability and resources become strong competencies.

Figure 1.0: The strategy model

Phase 1: Developing a strategic vision.

eBay have their own vision which providing a global trading platform where practically anyone can trade almost everything (Ismail, 2010). In mission, eBay make it very simple for people to buy and sell goods.

Phase 2: Setting objectives.

The objectives of eBay is continue to stay focused on connecting consumers on various e-commerce platforms, maintaining financial discipline and capitalizing on new opportunities for growth that had been told by new president John Donahoe.

Phase 3: Crafting a strategy to achieve the objectives and mission.

eBay provided many strategies to increase their competencies by using their capabilities. Generally, eBay has implemented many types of technique which can increase their strong capabilities among other competitors such as payment system (Paypal and Bill me later), partnership and investment (Channel adviser, UMP, Skype, achnet.com and more), E-commerce ( StubHub.com, Shopping.com, Half.com, Prostore.com and more).

Phase 4: Implementing and executing strategy.

This company has implementing those strategies in many ways. President of ebay, Donahoe have major of initiatives that were helping eBay transaction from a simple auction business to a portfolio of retail site. These initiatives included the acquisition of StubHub (eBay Express) a site featuring new merchandise and the introduction of online advertisement through partnerships with Yahoo and Google. The company offered an automated checkout service to help expedite communication, payment and delivery between buyers and sellers.

Phase 5: