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  • Ebay

    1. 1. Team: EC STAR Member: Kim, Jong Woo (Techno) Jin, Yong Sun(MIS) Myung, Sung Sin(MIS)
    2. 2. Why ?
    3. 3. Most profitable company Fastest growing company Good Business Model World wide community Fun to Buy and Sell
    4. 4. JUNE 4, 2001 INTERNATIONAL -- ASIAN BUSINESS How Yahoo! Japan Beat eBay at Its Own Game Yahoo Japan 95%($1.6B) eBay Japan 3% etc 2% Market Share in Japan 2000.12 Market Share in Japan 2000.12 Buying COST On Auction korea ,iBazar Buying Cost($200M) Revenue ($20M) Source :BusinessWeek Issue in eBay
    5. 5. Agenda <ul><li>1. Overview of Auctions </li></ul><ul><li>2. Overview of eBay </li></ul><ul><ul><li>Company Profile </li></ul></ul><ul><ul><li>Financial Analysis </li></ul></ul><ul><ul><li>Business Models </li></ul></ul><ul><li>3. Introduction of eBay site </li></ul><ul><ul><li>Auction process </li></ul></ul><ul><ul><li>Major Services and Features </li></ul></ul><ul><li>4. Analysis of competition </li></ul><ul><li>5. Strategy </li></ul><ul><ul><li>SWOT / 5 Force </li></ul></ul><ul><ul><li>Recommendations </li></ul></ul>2 3 1 4 5
    6. 6. Overview of Auctions <ul><li>Definition of Auction </li></ul><ul><li>“ An auction is a market mechanism by which buyer make bids and sellers place offers “ </li></ul><ul><li>“ Auctions are characterized by the competitive nature by which the final price is reached “ - JAE LEE … Electronic Commerce the 2 nd edition – </li></ul><ul><li>Types of Dynamic Pricing </li></ul>One Many One Direct Negotiation Auctions Seller Many Reverse Auctions Exchange Buyer 2 3 1 4 5
    7. 7. Overview of Auctions <ul><li>Types of e-Auction </li></ul>B2B www. ariba .com C2B www. priceline .com B2C www. amazon .com C2C www. ebay .com Consumer G2C www.hc-sc.gc.ca strategis.ic.gc.ca Business G2B Consumer Government Business 2 3 1 4 5
    8. 8. <ul><li>E- commerce Industry Background </li></ul><ul><li>: The growth of Internet and Online Commerce </li></ul>Overview of Auctions <ul><ul><ul><li>Number of server : 109,574,429 ( 2001.1 www,isc.org ) </li></ul></ul></ul><ul><ul><ul><li>The number of user : 513.41M ( 2001.8 www.nua.com ) </li></ul></ul></ul><ul><ul><ul><li>The Total value of global e-commerce transactions : </li></ul></ul></ul><ul><ul><ul><li>$657 billion (2000) -> $1.2 trillion (2001E) </li></ul></ul></ul><ul><ul><ul><li>B2B auctions are forecasted to grow ( Forester Research ) </li></ul></ul></ul><ul><ul><ul><li>$8.7 billion in 1998 -> $52.6billion ( 2002) </li></ul></ul></ul>2 3 1 4 5
    9. 9. Comparative Estimates Worldwide Total eCommerce 2000 2001 2002 2003 2004 Overview of Auctions <ul><li>Comparative Estimates Worldwide Total eCommerce ( $ Billion) </li></ul>2 3 1 4 5
    10. 10. Company profile <ul><li>Foundation : September 1995 </li></ul><ul><li>Location : San Hose , Ca USA </li></ul><ul><li>Registered Users : 29.7 M ( Nov 2001) </li></ul><ul><li>Employee : 1,927 (June 2001 ) </li></ul><ul><li>History </li></ul><ul><ul><li>Sep 1995 : eBay was founded in Pierre Omidyar’s San Jose </li></ul></ul><ul><ul><li>living Room </li></ul></ul><ul><ul><li>Feb 1998 : Meg Whitman became CEO </li></ul></ul><ul><ul><li>Sep 1998 : Nasdaq ( $ 18 per Stock ) </li></ul></ul><ul><ul><li>Dec 1998 : 2.2M users , 33.7M Total items </li></ul></ul><ul><ul><li>Dec 1999 : 10.0M users, 129.6 M total items </li></ul></ul><ul><ul><li>Dec 2000 : 22.0M users, 265M items </li></ul></ul><ul><ul><li>Nov 2001 : 29.7M users </li></ul></ul><ul><ul><li>17 Global Sites (Including Korea, Japan, France ,German) </li></ul></ul>2 3 4 5 1
    11. 11. Company profile - Management of Company <ul><li>Name: Pierre Omidyar </li></ul><ul><li>Title: Founder and Chairman </li></ul><ul><li>eBay responsibilities: Oversees strategic direction and growth, model and site development, and community advocacy. </li></ul><ul><li>Education: B.S., Computer Science, Tufts University. </li></ul><ul><li>Name: Meg Whitman </li></ul><ul><li>Title: President and CEO </li></ul><ul><li>eBay responsibilities: Build a successful business while delivering on customer needs and expectations </li></ul><ul><li>Education: M.B.A., Harvard Business School. </li></ul><ul><li>B.A., Economics, Princeton University. </li></ul>2 3 4 5 1
    12. 12. Company profile – Mission & market MISSION eBay's mission is to help practically anyone trade practically anything on earth. MARKET eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services 2 3 4 5 1
    13. 13. Financial Analysis - Revenue & Net Income Revenue(1000$) Net Income(1000$) 2 3 4 5 1
    14. 14. Net Income/Revenue(%) Net Income/Share($) Financial Analysis – ROA & PER 2 3 4 5 1
    15. 15. Financial Analysis – Stock Price 2 3 4 5 1
    16. 16. Business Model – reason for eBay’s success Largest Online Trading Forum Compelling Trading Environment Trust and Safety Programs Cost-Effective, Convenient Trading Strong Community Affinity Intuitive User Experience 2 3 4 5 1
    17. 17. Business Model Seller <ul><li>Browing and bidding </li></ul><ul><li>Is free of charge </li></ul><ul><li>Nonrefundable Insertion Fee </li></ul><ul><li>Additional listing options to promote </li></ul><ul><li>Final Value Fee </li></ul>Byuer 2 3 4 5 1
    18. 18. Profit Opportunity in process Requirement Delivery profit E-money Profit Trading Profit Listing Profit Selling Profit Advertising Profit Delivery Payment Trading Listing Searching 2% of Total Revenues(2000) 89% of TR 9% of TR New profit opportunity 2 3 4 5 1
    19. 19. Introduction of eBay 2 3 4 5 1
    20. 20. Auction Process Banking Seller Buyer 2 3 4 5 1 1. Register 2.Bidding 3.Successful Bid 4.Pay (eBay Direct Pay /Credit Card …) 5.Notify 6. Notify payment 7. Delivery 8.Delivery Notification 10.Get Paid 9.Pass account 4. Pay ( Check / Money order)
    21. 21. Major Categories Major Categories 2 3 4 5 1
    22. 22. Specialty Sites <ul><li>Half.com : The eBay community benefits from a marketplace combining traditional auction-style trading and Half.com's fixed-price trading. Half.com offers an organized online marketplace to buy and sell high quality, previously owned mass-market goods </li></ul><ul><li>eBay Stores : eBay Stores expands the marketplace for sellers by allowing them to create customized shopping destinations to merchandise their items on eBay </li></ul><ul><li>eBay Motors : eBay Motors is the Internet's largest auction-style marketplace for buying and selling all things automotive </li></ul>Specialty Sites 2 3 4 5 1
    23. 23. Major services and features SafeHarbor SafeHarbor is eBay's comprehensive safety resource and protective arm. <ul><li>Feedback Forum : Check the &quot;reputation&quot; or business practices of any buyer or seller at eBay. </li></ul><ul><li>Escrow : Inspect what you buy before sending payment by asking your seller to consider escrow services. </li></ul><ul><li>Fraud Protection Program : You are covered for up to $200 on most items - free! (applies to most users, subject to guidelines) </li></ul><ul><li>ID Verify : Get successfully verified and sell on eBay. </li></ul>2 3 4 5 1
    24. 24. Major services and features <ul><li>Authentication Services Get a second opinion on your item by using outside expertise. </li></ul><ul><li>Verified Rights Owner ( VeRO ) Program Make sure that items do not violate intellectual property rights as there may be liability involved. </li></ul><ul><li>Dispute Resolution An independent service that provides a neutral place to work out disputes online efficiently and effectively. </li></ul>SafeHarbor 2 3 4 5 1
    25. 25. <ul><li>Billpoint : eBay's preferred online bill payment service that facilitates credit card payment between buyers and sellers </li></ul><ul><li>eBay International : Users on eBay represent countries all over the world. With eBay's vision and global business strategy, the company continues to expand its service and brand abroad </li></ul><ul><li>Buy It Now : Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction </li></ul>Major services and features 2 3 4 5 1
    26. 26. <ul><li>eBay Professional Services Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals </li></ul><ul><li>eBay Local Trading eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest </li></ul><ul><li>eBay Premier eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world </li></ul><ul><li>eBay Live Auctions Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses </li></ul>Major services and features 2 3 4 5 1
    27. 27. <ul><li>Amazon </li></ul>Competitors Buy.com Yahoo! MSN Wal-Mart Macy’s Sam’s Club Autobytel.com Dell Home Depot eBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers AOL 2 3 4 5 1
    28. 28. Competitors - Yahoo 2 3 4 5 1
    29. 29. Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001 eBay versus Yahoo for Sellers(1/2) eBay Yahoo Maximum Duration 10 Days 14 Days Ending Time eBay auctions end at the time the auction was created Yahoo allows you to set the ending time within a one-hour range. Fee based on the starting or reserve price of an item each time an item is listed not charge any fees for listing auction items to the buyer or seller Commis-sion <ul><li>up to five percent of the final </li></ul><ul><li>closing price </li></ul><ul><li>fee for reserve auctions </li></ul>to the buyer or seller when an item is sold Chances of Buy & Sell More likely Less likely When a new Item Is posted a page for the item gets created immediately,but it can take several hours before the item gets added to the list of items and is searchable a page for the item is created immediately. The item is also added to the list of items and is searchable immediately. 2 3 4 5 1
    30. 30. Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001 eBay versus Yahoo for Sellers (2/2) eBay Yahoo Sniping Restart Dutch auction Response Restrictions Counter A bid is made within the last 5 mins of an auction, it is automatically extended by five minutes. nothing to stop bidders from waiting until the last seconds of an auction to make a bid. cannot be automatically restarted can automatically be restarted Possible, but you must have a rating of at least ten before you can do this Possible, not need to have a certain rating before you can create Not respond as quickly as Yahoo. (browsing, searching, etc) Better performance than eBay More restrictions Fewer restrictions to use another site to place a Counter on your auction item page able to count without placing a Counter on your auction page 2 3 4 5 1
    31. 31. Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001 eBay versus Yahoo for Buyers eBay Yahoo Items Over 6 times more items A lot fewer items Charging for posting Yes No Unusual Thing More likely to find Not have as wide or deep of a selection Search <ul><li>Titles or titles & description </li></ul><ul><li>Can limit within a category </li></ul>Brows items By title or by picture (if designated as part of the gallery ) Space for pictures Not provide space for pictures: You must place your picture files On some other site Provides free space for auction item Pictures, so more items have pictures For you to see <ul><li>Titles or titles & description </li></ul><ul><li>Can limit within a category </li></ul>By title or by picture Insurance Automatic insurance for sales Not offer insurance 2 3 4 5 1
    32. 32. SWOT Analysis <ul><li>First mover advantage </li></ul><ul><li>Large and impenetrable </li></ul><ul><li>market share </li></ul><ul><li>the scale of bidders &sellers </li></ul><ul><li>No traditional retailing cost </li></ul><ul><li>structure </li></ul><ul><li>e-Commerce is increasing </li></ul><ul><li>Chances for M-commerce </li></ul><ul><li>Possibility to expand high cost </li></ul><ul><li>product </li></ul><ul><li>Small competitor’s dismiss </li></ul><ul><li>Simple and easy to imitate </li></ul><ul><li>Fraud trading (Trust Issues) </li></ul><ul><li>System Security & reliability </li></ul><ul><li>Decrease in growth rate </li></ul><ul><li>Trust issues between buyers </li></ul><ul><li>& sellers </li></ul><ul><li>Oriented in P2P market </li></ul><ul><li>Community power </li></ul>S T O W 2 3 4 5 1
    33. 33. 5 Force Analysis Bargaining power of Suppliers Threat of substitute Products or services Rivalry among Existing Competition Barriers to entry Buyers (GM, HP…) (B2B, B2C, C2B,off-line…) (Yahoo, Amazon …) (GE..) 2 3 4 5 1
    34. 34. Recommendation S Y S T EM To Be the World Leader in e-Market Place B U S I N E S S M O D E L 2 3 4 5 1 <ul><ul><li>eBay : 22.0M users, 265M items </li></ul></ul>S E R V I C E G L O B A L …
    35. 35. Recommendation Back Ground <ul><li>Depending on the category of product </li></ul><ul><li>Incresing of Community power </li></ul><ul><li>Trust issues between buyers & sellers </li></ul>Stratecy Things To Do <ul><li>Broaden the eBay Trading Platform </li></ul><ul><li>Foster eBay Community Affinity </li></ul><ul><li>Enhance Features and Functionality </li></ul><ul><li>Tarket key product categories for special users </li></ul><ul><li>Develop new community tools </li></ul><ul><li>Enhance the cummunity for women and old peoples </li></ul><ul><li>Add new features and services to help trade with greater ease </li></ul><ul><li>Expand Value-Addes Sevices ( community purchase) </li></ul><ul><li>Increase the Trust and Safety Programs </li></ul>Servies 2 3 4 5 1
    36. 36. Recommendation Back Ground <ul><li>Growth rate Decreases </li></ul><ul><li>To utilize the advantages of internet in globalization </li></ul>Stratecy Things To Do <ul><li>Homogeneity global market </li></ul><ul><li>Different strategies to enter new international markets </li></ul><ul><li>Enforce Marketing in foreign countries </li></ul><ul><li>Provide unified site and URL in each country </li></ul><ul><li>Introduce country-specific services </li></ul><ul><li>Choose from building solely, acquiring a company or </li></ul><ul><li>partnering with strong local companis </li></ul>Globalization 2 3 4 5 1
    37. 37. Recommendation Back Ground <ul><li>Limit of P2P market size </li></ul><ul><li>Great potential maket of B2C and B2B </li></ul><ul><li>A new, rapidly evolving and intensely competitive area </li></ul>Stratecy Things To Do <ul><li>Expand Business Model from P2P to B2C and B2B </li></ul><ul><li>Good relationship with partner </li></ul><ul><li>Have a partnership with bank, c-card,e-mopney, mobile </li></ul><ul><li>communication company, google etc </li></ul><ul><li>Expand gradually Business model from P2P to B2C </li></ul><ul><li>Develop the ebay’s private brand product. </li></ul>Business Model & Strategic alliance 2 3 4 5 1
    38. 38. Recommendation Back Ground <ul><li>15 System downs between Aug 1998 and Nov 1999 </li></ul><ul><li>The threat of Hacking ( Deny of services ) </li></ul><ul><li>The cost of system failure is so big </li></ul>Stratecy Things To Do <ul><li>Adapt to changing technologies and industry standard </li></ul><ul><li>Achieve to stability, availability and efficiency </li></ul><ul><li>Build backup system for important system such as CPU </li></ul><ul><li>Disk,D/B, Network System, Power, Communication Line </li></ul><ul><li>Downsize the computer system from Mainframe-level Sun </li></ul><ul><li>to Win2000 or Linux ( ex: Google has 4,000 Linux server) </li></ul><ul><li>Acquire specialist for System, DB, Network,Program and etc </li></ul><ul><li>Invest more money on System Infrastructure </li></ul>System Infrastructure 2 3 4 5 1
    39. 39. What are the uncertainties in e-biz <ul><ul><li>Rapid technology innovation in web and mobile </li></ul></ul><ul><ul><ul><li>: Searching technology/mobile trading </li></ul></ul></ul><ul><ul><li>No homogeneity global market </li></ul></ul><ul><ul><ul><li>: Portal site May be more powerful than eBay.co.xx </li></ul></ul></ul><ul><ul><li>Multimedia innovation force much investment </li></ul></ul><ul><ul><ul><li>: Leverage effect more advantageous to portal </li></ul></ul></ul><ul><ul><li>The speed up of the Off-line shop’s innovation </li></ul></ul><ul><ul><ul><li>: All off-line shop operation on-line shop </li></ul></ul></ul><ul><ul><li>e-money payment system will be show to us </li></ul></ul><ul><ul><ul><li>: They will be most powerful alliance group </li></ul></ul></ul>2 3 4 5 1 <ul><ul><li>But </li></ul></ul><ul><ul><li>Our Recommendation will prevent uncertainties change </li></ul></ul>
    40. 40. Summary eBay Will be the Best e-biz Leading Company
    41. 41. Thank You