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eBAY Strategic mgt presentation
1.
2.
3.
4. What is EBay?
The World's Online Marketplace
for the sale of goods and services
by a diverse community of individuals and businesses
provide a global trading platform
where practically anyone can trade practically anything.
eBay
5. Cont…
• It is headquartered in San Jose, California.
• eBay was founded by Pierre Omidyar in 1995, and
became a notable success story of the dot-com .
• Operating in 37 countries with 233 million customers
till 2015.
eBay
10. Seller
eBay
Trading
Community
• 157million
registered users
Buyer
Lists item
Auctions
Fees($$)
Notification of
Winning buyer!
Feedback
On buyer
1
8
4
5
Feedback
on seller
Notification of
Winning bid!
2
4
Bids on item3
Buyers and sellers leave
Feedback on each other
7
Ships item (after exchanging e-mail)6
Sends payment (after exchanging e-mail)6
Registration0 Registration0
eBayHow its operating..
11. eBay the first virtual online business community that..
• Empowers entrepreneurial individuals to
become e commerce business owners.
• Offers a sense of community to buyers and
sellers through communication and
interaction.
• Provides a faster ,easier and safer online
commerce experience.
eBay
12. Mode of communication
• EBay uses Skype as mode of communication
for its e commerce purposes.
• E bay’s E commerce also provides..
1. Full support for buying process.
2. Chat services.
3. Protection programs.
eBay
13. Corporate revenues generation
• Ebay.com earns its corporate revenues from
three business segments…
1. Marketplaces
2. Payments
3. communications
eBay
14. The EBay market place
• EBay transformed the internet and way of
shopping and doing business.
• It is an online virtual trading platform for the
sales of goods and services by a community of
users.
• It also provides virtual marketplace auction
where the market determines the price of the
item.
• Offers millions of item for sale through auction
style and fixed price trading.
eBay
15. EBay is operating in….
World Market Regional Market
Asia Pacific Australia,China,Hong Kong,India,Malaysia,New Zealand,Singapore
Europe Austria,Belgium,France,Germany,Ireland,Italy,netherland,Poland,Sp
-ain,Sweden,Switzerland,UK.
North America Canada, United States
Latin America Argentina,Brazil,Chile,Colombia,Mexico,Peru,Costa Rica and
Panama.
eBay
16. Mission & Vision statement
2015
”At eBay, our mission is to provide a global online
marketplace where practically anyone can trade
practically anything, enabling economic opportunity
around the world.”
eBay
17. EBay's Market Place platform
• Traditional auction style or fixed price options
are offered in 39 markets..
Auction Style
Fixed Price
eBay
18. A Trusted Online Community
• To facilitate trading with unknown partners on
internet EBay provides a trusted and safe
trading environment by offering the following
services,
• Feedback Forum
• Safe harbor program
eBay
19. Feedback Forum
• Provides feedback, comments and ratings on
other users that can be viewed by other user
when considering the purchase.
• Information is recorded up to 12 months and
provides color coded stars rating.
eBay
20. Safe harbor program
• Provides guideline among parties to resolve
disputes.
• Complaints are investigated and offenders
may receive warnings that are posted to users.
• Violators may be suspended from either
bidding on or listing items for sale.
eBay
21. EBay Acquisitions
Name Acq..
Year
What its about..
StubHub.com 2008 Leading US ticket marketplace that allows users to buy and sell
tickets to sporting,events,theater and entertainment events.
Shoping.com 2005 An online comparison shopping site that offers comparisons on
million of products and services and provide reviews .
Rent.com 2005 Lists apartment availibility,rental costs ,virtual tours ,roommate
searches and more.
eBay
22. Business Segment ll
• Payments
EBay's payment segment is composed of two
solutions.
1. PayPal
2. Bill me later
eBay
23. PayPal
• PayPal was founded in dec1998 and acquired by eBay in 2002.
• Global leader in online payments solution with 170million active
accounts.(2015)
• PayPal has captured 85.64% of US e-commerce and 68.1% of global
e- commerce trade.(2015)
• Higher fees earned on international transactions have provided
eBay with higher revenue and gross margins as compared to
revenues from domestic transactions.
• PayPal is accepted both offline and online in 203 markets
worldwide and processes payments in 26 currencies.(2015)
eBay
24.
25. Bill me later
• Acquired by eBay inc in 2008.
• Offers consumers instant credit at the point of sale through over
1000 online US merchants, retailers that offer the bill me later
services.
• As bill me later is not a chartered financial institution so an
arrangement with CIT Bank allows bill me later to extend credit to
customers.
• Bill me later earn revenues from interest on outstanding balances,
late fees and transaction fees.
• PayPal acquired bill me later in 2008
eBay
26. Business Segment lll
Communications
Skype
• Founded in 2003 and acquired by eBay in 2005.
• Skype has approximately 1 billion registered users worldwide.(2015)
• Headquarters are located in Luxembourg.
• Skype allows buyer and seller communications24/7 in a secure and trusted
community that is supported by free internet voice and video calling.
• Used in 225 countries and in 38 languages.
• Revenue is earned through premium services such as making call from
landline to Skype etc.
eBay
31. Strengths
• Largest Online Auction (eBay has over 94.9 million registered users in
more then 150 different countries)
• Recognizable Brand Name (Unique Logo, Colors and Branding in terms of
publicity as compared to Amazon etc.)
• Over 250 Alliances. (eBay holds 250 alliances with top-notch international
companies including PayPal, Walt Disney, IBM, UPS, America Online, Trade
Safe and I-Escrow)
• Global Reach (People from all over the world can connect virtually and
find their products of interest on eBay)
• Over 27,000 Different Categories (Wide Array of products allows them to
be the leading online auction site - kind of like the Wal-Mart of the
Internet)
• Sense of Community (Making the customers a priority and coming up with
new ways to reach out to them for example: eBay University)
• No requirement of traditional sales force. (Keeps cost down in terms of
training, payroll and salary)
eBay
32. Weaknesses
• Inability to Measure Illegal Activity on Site (Customers claim
about 10 percent fraudulent transactions)
• Inability to Penetrate Some Foreign Markets (eBay has failed to
take over one of the most crucial foreign markets, i.e. Japan.)
• Lack of In-Depth Descriptions for Products ( eBay fails to give in-
depth description of all the products which could lead to wrongly
sold products to the customers)
• Technology Malfunctions (Technology malfunctions are always
going to be a factor when dealing with websites and online
shopping i.e. to keep hackers out of personal PayPal and eBay
accounts)
eBay
33. Opportunities
• Growing number of mobile shoppers (The growing number of mobile shoppers
represents a huge growth opportunity for PayPal as its one of the few payment
systems that meets the requirements for convenient shopping and payment
processing on the go.)
• Become a retailer. (eBay has an access to hugest online marketplace in the world
and is well placed to take an advantage of that by becoming a retailer.)
• Increase services portfolio through acquisition. (The company has successfully
acquired many companies to extend its services offering and should continue
adding new services through mergers and acquisitions.)
• Open more online stores in other countries. (To sustain current growth levels,
eBay could open its online marketplaces in other large and growing economies in
Asia and Europe.)
• Changing lifestyles. (People are using the internet more and more to pay bills, talk
to family, and shop. eBay can use this opportunity for continued market
penetration and expansion.)
eBay
34. Threats
• Thieves (Threat of fraud and illegal actions in online shopping) MEDIUM
• Increasing Number of Online Trading Sites ( eBay already has many competitors
surrounding them including Amazon.com, uBid, and ePier which makes it harder to
encompass a competitive edge in the market) HIGH
• Rapid Growth of Amazon.com (May have the potential to take over the largest
market share in the online auction industry) MEDIUM
• Increasing Number of Online Stores (Competition with online retailers such as JC
Penny, Target, etc) HIGH
• 1/3rd of Americans already registered on the website. (United States is eBay’s
main customer. Poses a threat to their continued rapid growth universally because
they will start to run out of customers to join their site) HIGH
eBay
36. ® 2006, Tony Gauvin, UMFK 36
SPACE Matrix
6 -1
2 -4
6 -3
5 -5
6 -6
5 -4
Financial Strength (FS)
Return on Investment (ROI)
Leverage
Liquidity
Environmental Stability (ES)
Rate of Inflation
Technological Changes
Price Elasticity of Demand
Working Capital
Cash Flow
Competitive Pressure
Barriers to Entry into Market
Environmental Stability (ES) AverageFinancial Strength (FS) Average
-1 5
-2 4
-2 4
-3 4
-5 6
-2.6 5
Competitive Advantage (CA) Industry Strength (IS)
Competitive Advantage (CA) Average Industry Strength (IS) Average
Customer Loyalty Rivalry Among Competitors
Technological know-how Resource Utilization
Control over Suppliers and Distributors Profit Potential
Market Share Growth Potential
Product Quality Financial Stability
eBay
37. Suggestion/Recommendations
Expand to all countries of the world
Advance in security of personal information
Increase in Industry
Increase revenues by capturing more customers
eBay
40. Question No 1
• EBAY failed badly in Japan and has to close its
operations there what do you think could be
the reason?
eBay
41. Answer
• Yahoo Japan started operating as an online auctioneer
in 1999 and captured 95% of the Japan e commerce
market.
• EBay entered in Japan five months the yahoo and was
only able to capture 3% market.
• 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.
eBay
42. Contt..
• Another possible misstep was Whitman's choice of Okawara, a
second-generation Japanese-American from Hawaii, as president
and CEO. Okawara was well-known in Japan for turning a faltering
frozen-pizza business into a $100 million company. But at 60, she
was twice the age of most of her eBay Japan employees and new to
the Internet
• At the same time, eBay Japan also took a low-key approach to
marketing, relying on its usual formula: rather than spend big bucks
on advertising, just let auction fans spread the word. That passivity
backfired in Japan because eBay had too few users. In contrast,
Yahoo Japan spends some 8% of revenue on promotions
eBay
43. Q:2
• Amazon with almost 250Billion$ market
capital is almost going to kick eBay out of
business. What strategies should eBay adopt
against it?
eBay
44. Answer
• Most people think of eBay as an online auction house.
• The company beyond auctions is developing technology
partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’
Us and Target and expanding eBay’s online marketplace to include
reliable, returnable goods at fixed prices. (Auctions currently
represent just 30 percent of the purchases made at eBay.com; the
site sells 13,000 cars a week through its mobile app alone, many at
fixed prices.)
• eBay has made 34 acquisitions over the last five years.
• eBay’s vision of the future is the digital wallet. On a basic level,
having a ‘‘digital wallet’’ means paying with your phone, but it’s
about a lot more than that; it’s as much a concept as a product.
eBay
45. Q:3
Traditional retailers are a big problem for eBay.
Q:What strategies should adopt ?Should eBay
also open a traditional store like Amazon and
wall mart?
eBay
46. Answer
• This will cost company a lot of money, instead
it should focus more on PayPal as it is
separated from eBay and is earning more
revenues for eBay then its other two
marketplaces.
eBay
