eBay Case Study
University of Mary Hardin- Baylor
Abstract
1. Analyze the marketing environment and the forces shaping eBay’s business over the years. What conclusions can you draw?
The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. “Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its
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This created an environment where consumers were receiving what they desired and also at higher volume creating profits. “ Donahoe- “We have to create a marketplace where we’re helping our sellers give our buyers what they want”” (Armstrong, 2013). Giving the customers what they desire created profit and growth for eBay.
3. Do you agree or disagree with CEO Donahoe that eBay’s turnaround strategy is the best way to go?
Yes I agree with Donahoe’s decision on his turnaround strategy. Change can be difficult but adapting and innovation is the key to success. “ The “power of mass procurement” can be utilized to ensure that only those systems that meet the defined criteria for sustainability are considered for purchase” (Fichter, 2003). Change is something all companies have to go through and the ones that make the transitions the most smooth are the ones that excel.” Given that expert projections suggest that mobile commerce will top $119 billion by 2015, being on top of this trend s a great place to be” (Armstrong, 2013). This is exactly what eBay did, they found a new leader and he lead them through new changes and it is paying off. Yes at first there was “growing pains” but their profits are increasing in areas do to their innovation and changes they had to make.” We have gone from turnaround to offensive” (Armstrong, 2013)
4. Based on eBay’s current developments with PayPal and mobile apps, what
After emerging from bankruptcy in 2005, Eddie Bauer had to take several strategic steps to establish an effective direction of the company and operate more successfully. Management’s plan of reorganization identified six key strategic initiatives that can be classified into two main groups. The first component of their strategy is to improve profitability by both increasing demand through effective marketing campaigns (brand revitalization, resizing of stores, and improving customer experience) and cutting costs (store rationalization, increasing direct sales, and optimizing productivity). The second component of their strategy is
Macy’s department store, like many brick and mortar stores, is experience a decline in sales and is forced to look at ways to turn the tables. In Macy’s anticipation of the online shopping trend as wells as the trend for customer loyalty programs, Macy’s is planning (expecting trends and deciding the best plan to achieve goals) a course of action that they hope will turn the decline around. Part of Macy’s plan is to make a change in management. By hiring E-Bay’s vice president, Hale Lawton, into the role of CEO of Bloomindales, Macy’s hope is bringing Lawton’s expertise in e-commerce to the company. With Lawton’s knowledge and experience in managing (planning, organizing, and leading) e-commerce, Macy’s goal is to the move business to
Our things are a representation of who we are, and our willingness to give up certain things easier than others has a lot to do with who we are. Our personal effects help tell a story from the past just as easily as any old photo taken from a long forgotten family fishing trip, or vacation. The online website eBay is a place where people can sell items from their past that they no longer want or need. Some users sell treasured belonging on eBay in order to make a few extra bucks because they are rare or unique, and others sell to make room for new things with new stories. Whatever the reason for selling off a precious belonging is; an thought out colorful description can make all the difference to a potential buyer. Many descriptions only focus on the characteristics of
Assess the need for a change in Best Buy 's strategy when Brand Anderson became CEO.
3. How does the current market condition affect eBay’s decision? Should eBay go ahead with the offering?
eBay is an American multinational corporation and e-commerce company, that provides consumer-to-consumer sale-services through the Internet. eBay was initially founded as an auction web by a computer programmer called Pierre Omidyar, and during the dot-com bubble it manage to prevail and it ended up being a notable success story. In September 1997, the company officially changed its name to eBay and in 1998 it went public. Today it is a multibillion-dollar business with operations localized in over 30 countries (Global Trade, 1995-2016). There are millions of items available on eBay, from used cars to collectible items such as coin memorabilia. The firm empowers exchange on local, national and global business sectors around the globe. Unlike Amazon, which threatened the existence of local retailers, eBay facilitates local individual retailers/mom-and-pop stores/retail chains and offered them a platform to sell their merchandise with the advantage of same-hour delivery.
eBay still has a dominant market share of online auction. His reputation is a sweeping force in maintaining his good performance. However, eBay has to be cautious in every marketing decision. His mistakes will be taken advantage by these new comers. For example, www.bidville.com , an online auction site, recently experienced a dramatic increase in new member registration after eBay announced they would raise their listing fees for sellers. eBay took a prompt response by resuming the listing fee back to the original level. eBay didn’t win anything in this price adjustment and readjustment, but eroded his reputation. Essentially in this online auction market, whoever has the most name recognition, wins the game. Right now, Bidville’s disadvantage in name recognition puts Bidville out as a possible alternative to eBay’s market space temporarily. eBay should think about more to maintain his name recognition on the long run.
During Whitman’s tenure, her decision making skills and her responsiveness to the task environment is a topic for discussion, ten years after her departure. On her first day at eBay, the website crashed for eight hours, halting all trading. Her quick decision making prompted the addition of backup software and an increase of computer servers to support the network traffic eBay was experiencing due to the high volumes of trading. The actions are standard reactions to the situation; it was her ability to manage the crisis on her first day that led her to successfully lead the senior managers to buy in that eBay’s number one job was to keep the site up. The website continued to experience power outages that lasted from 10-15 minutes during her first year which prompted her to develop a contingency plan. The plan consisted of her hiring Microsystems Inc. to manage eBay’s infrastructure while she worked on improving her internal technical environment (Holson, 1999).
EBay’s business strategy originally used a two-sided platform, founder, Pierre Omidyar (1995), developed the firm out of, what he saw as a, ‘need’ or ‘niche’ in the market that needed accommodating. This niche was to develop lower search costs and find a way to determine a fair price in the industry. (I.e. a working price mechanism) Due to high search costs the ‘used goods and collectables’ market had suffered a stifled growth. Whereas the lack of a price mechanism in the market meant products were sold primarily through bilateral negotiation, through buyer and seller. This was an issue as it didn’t reveal the true prices in the market as little or no competition prevented competitive pricing strategies from emerging. However, the emergence of eBay’s auctions feature transformed Bi-Lateral trades into Multi-Lateral trades, facilitating efficient price discoveries. (R.Salehnejad, 2012, Note 3) In 2003 eBay introduced fixed prices using the ‘buy it now’ function in which eBay still benefited from a listing and commission fee. This effectively ensured that the merchant always got the price they wanted for a good, not necessarily the market price it deserved. Furthermore, in 2001 eBay introduced ‘eBay Stores’ allowing firms to offer its products at fixed prices through the eBay site, such as the Home Depot in the USA. Here it is clear that eBay was moving into Amazon’s territory as an online retailer and merchant platform. Although eBay
Many people in this new media generation is relying on constant innovation in technology and the power of the internet. eBay is an internet marketplace platform where users can easily manage their online shopping or online selling. eBay’s online shopping replaces old media where the items used to be auctioned or bought on the television screen by a phone call. With the internet being a powerful source in today’s world, people can easily become a part time e-commence entrepreneur in the eBay community by selling their old vintage items, collectibles, and rare products to generate side revenue. It is important for us to understand how eBay as an internet retailer can positively or negatively affect our community. eBay also contributes economical, sociological, technological, and moral perspectives in modern society.
Use this valuable guide as a MONEY MAKING TOOL. Read it from start to finish over and over. The amount of information and wholesale sources you will find seems overwhelming at first, but don’t be intimidated. Take your time and be patient. It is going to take you several days to check out the sites because there are just so many items to choose from.
Going to the beach requires a special kind of attire. Although wearing a bathing suit makes sense, some people prefer to cover up at least part of the time. This is where cute and stylish beach dresses come into play. They feature lightweight materials, short lengths, and attractive designs, and they keep the body covered just enough to make women feel comfortable without needlessly weighing them down in yards of material.
eBay’s challenges are multi-faceted, and it remains to be seen whether by simply returning to its roots as an auction site it can win back buyers and sellers who have long since given up on using the site. Online retailing has evolved significantly since eBay was founded over a decade ago. Savvy consumers have learned how and where to find deals online, but value intangibles beyond price when making their purchase decisions. Consumers expect a level of service that in some respects is beyond eBay’s ability to control in its role as middleman. Given that, eBay would be better served looking beyond product strategy and focusing instead on improving the shopping experience for buyers and sellers as its constant tinkering seems to be doing more harm than good.
A major challenge that eBay has been facing in the last few years is the structural challenges related to credit card interchange and the ability to link such systems with other mobile operating platforms. Another key issue that has emerged as a major weakness for eBay has been the reality that there is no further growth strategy for the entity. Perhaps this is due to the fact that eBay currently uses an online platform that may not provide further growth to the systems currently being utilized. eBay has also had a challenge with the current business model, which despite its brilliance has been argued to present certain logistical challenges for the company’s operation.
To attain this objective, eBay 's vision is to construct a framework that has four parts: