ITEC-610 Ebay Case Study
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  • 1. Case Study: ebay
    ITEC 610
    Scott Cnockeart
    Benjamin Muthoka
    Chris Lange
    Murdock McCormick
  • 2. What is eBay?
    eBay is the largest online marketplace where local, national, and international participants can make sales and purchases. Buyers and sellers are able to use auction-style listings, or make immediate sales using the “Buy it now,” Fixed Price,” and eBay store listings.
  • 3. eBay Background
    1995 - Pierre Omidyar, In his home, created eBay and it was originally called EchoBay.com. Because the domain name was already registered, Echo was shortened to “e”, and eBay was born.
    March 1998 - Meg Whitman, the name we all know, joined eBay.
    September 1998 – eBay goes public
    October 2002 – eBay acquires PayPal
    (Mullen, 2008)
  • 4. First item sold on eBay was…. a laser pointer….
    BROKEN
    $14
    X
  • 5. eBay Revenue History
    (MSN, 2009)
  • 6. Web Auction Competitors
    eBay is still a market leader in the online auction market commanding a respectable 17% online market share.
    (BusinessWeek, Issue 4136 )
    (O’Brien and Marakas, 372)
  • 7. Competitive Advantage
    Superior customer service through the use of different technologies to provide online support. E.g. chat rooms, discussion boards and automatic email response technology.
    Leveraging PayPal by increasing services such as the recently added iPhone application that has attracted thousands of Net shopping sites.
    Improved communication between buyers and sellers through Skype, which at its acquisition had a 54 million customer base.
    A commanding international market share especially in Europe with Germany generating a staggering $7 billion in annual sales second only to the U.S.
    ( O’Brien and Marakas, 2009)
  • 8. eBay vs. Amazon
  • 9. eBay Shortfalls
    A decreasing international presence especially in majors markets like China.
    Fierce competition from Google and Microsoft for online classifieds.
    Declining sales which has seen Amazon gain 5 million more visitors while eBay lost 8 million in the same time period.
    Claims of a non user-friendly website by online buyers. E.g. better search results from Google.
    A time consuming and exhaustive vetting process that delays introduction of innovative technology into the market.
    Disgruntled sellers due to a new feedback system that stands to put them at a disadvantage.
    (BusinessWeek, Issue 4136 )
    (O’Brien and Marakas, 372)
  • 10. Current Business Practices
    (eBay Inc., n.d.)
    eBay has positioned itself to be the worlds largest online marketplace.
    The company has a presence in 39 markets, the US included
    Almost 1 billion users worldwide
    eBay has forever changed the idea of internet commerce
  • 11. Current Practices
    • Consumer benefits of eBay
    Provides an open trading forum for buyers and sellers to conduct business
    Some sellers provide links to online stores
    Provides an excellent opportunity for entrepreneurs to start a small business
    The market controls the value of products being sold
    Contains an extensive search database
    Virtually anything can be located via search engine
    Advanced features allows more search detail
    (eBay Inc., n.d.)
  • 12. Current Practices, cont.
    • Consumer benefits of eBay, cont.
    User friendly interface
    Items of interest can be browsed using different views
    Sellers provide details of selected items
    Items can be selected to watch
    Personal online account creation
    Contains recently purchased/won products
    View items previously checked to watch
    Access personal eBay mail from sellers
    Experience the excitement of the process
    Painless payment process via eBay owned PayPal
    (eBay Inc., n.d.)
  • 13. Accompanying Services
    Paypal online payment service
    Built on our current financial system of banks and credit cards
    Secure method to send and receive online payments effectively
    Payment solutions global leader
    Accepted by millions of merchants worldwide
    Currently utilized on and off eBay
    (eBay Inc., n.d.)
  • 14. Accompanying Services cont.
    Rent.com, apartment listing guide
    Online Classifieds
    Information on apt. availability and rates, roommates, virtual tours, moving services
    Online Classifieds
    People meet, share ideas, and trade locally
    Available in hundreds of cites and regions globally
    Gumtree.com, Kijiji, LoQUo.com, Intoko,
    Netherlands; Marktplaats.nl, German auto ads; mobile.de
    (eBay Inc., n.d.)
  • 15. Business Challenges
    Users find eBay online auctions cumbersome
    Competitors are breaking into online classifieds markets, providing free services searchable by location:
    Google Base
    Microsoft’s Windows Live Expo
    eBay lost China’s market due to TaoBao; a company that allowed for more of a consumer to consumer approach to eCommerce
    (O’Brien & Marakas, 372)
    (Xiaojuan & Davison, 145-148)
  • 16. Potential Solutions
    1) eBay could continue to make acquisitions1
    eBay currently has a 25% stake in Craigslist
    eBay has acquired online classifieds sites:
    Kijiji
    Gumtree
    LoQUo
    eBay completed acquisition of Skype in 2005 in an attempt to link buyers and sellers quickly and easily
    2) eBay could continue to go global2
    eBay has already expanded globally to over 22 countries
    1: (O’Brien & Marakas, 372-373)
    2: (Komiak, Komiak, Imhof, 187-204)
  • 17. Potential Solutions (continued)
    3) Incorporate PayPal into Craigslist
    4) Incorporate more on-site advertising and make eBay item postings free
    (O’Brien & Marakas, 372-373)
  • 18. Analysis of Solutions
    Based on a scale from 1-10; 10 being best
  • 19. Recommendation
    For eBay to truly compete with the new products developed by Microsoft and Google, they need to take a proactive approach and allow users to post products for little or no money
    These costs can be recouped through the use of site advertising
  • 20. References
    eBay inc. (n.d.). The eBay Company. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/aboutebay/thecompany/companyoverview.html
    eBay inc. (n.d.). How eBay works. Retrieved August 1, 2009, from http://pages.ebay.com: http://pages.ebay.com/help/account/questions/about-ebay.html
    Komiak, P., Komiak, S. Y. X., & Imhof, M. (2008). Conducting International Business at eBay: The Determinants of Success of e-Stores. Electronic Markets, 18, 187-204. Retrieved July 31, 2009 from Business Source Complete database.
    Maltby, E. (October 17, 2008). R etrieved August 01, 2009 from http://money.cnn.com/2008/10/17/smallbusiness/ebay_twilight.smb/index.htm
    McMillan, D. (2009, J une 0 6 ). Can eBay Get Its Tech Savvy Back? BusinessWeek, 413 6, 48-49.
    MSN. (2009, n.d.). eBay Inc. Retrieved August 2, 2009, from http://moneycentral.msn.com: http://moneycentral.msn.com/detail/stock_quote?Symbol=ebay&getquote=Get+Quote
    Mullen, A. (2008, n.d.). Learn how eBay began as a small business in someone's living room and grew into one of the top earning Websites on the Internet. Retrieved August 1, 2009, from www.happynews.com: http://www.happynews.com/living/online/history-ebay.htm
    O’Brien, J. A. & Marakas, G. M. (2009). Management Information Systems. New York, NY: McGraw-Hill Irwin.
    Xiaojuan Ou, C. & Davison, R. M. (2009). Why eBay Lost to TaoBao in China: The Global Advantage. Communications of the ACM: 52, 145-148. Retrieved on June 15, 2009 from Computers and Applied Sciences Complete database.