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E bay

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e.bay competitive strategy and matrix analysis

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E bay

  1. 1. eBAY S/LT ADEEL PN MR. SHAFEEUDDIN 1
  2. 2. SCHEME OF PRESENTATION  History  Introduction  Company profile  Business model  Acquisition of PAY PAL  Competitors  Financial analysis  SWOT analysis  5 force analysis  Recommendations 2
  3. 3. HISTORY • 1995 – founder Pierre Omidyar, graduate from Tufts University, encouraged by his wife’s hobby. • Skoll, Omidyar’s partner joined him as first president. • 1996 – incorporated in San Jose, CA • Sept. 1998 – eBay first IPO. $18 per stock. • 97, Meg Whitman, joins as CEO. HBS 3
  4. 4. INTRODUCTION An online auction platform that facilitates transaction between buyers and sellers of goods and services 4
  5. 5. COMPANY PROFILE – Mission & market MISSION MARKET 5 eBay's mission is to help practically anyone eBay's mission is to help practically anyone trade practically anything on earth. trade practically anything on earth. eBay enables trade on a local, national and eBay enables trade on a local, national and international basis. It features a variety of international basis. It features a variety of international sites, specialty sites, categories international sites, specialty sites, categories and services and services
  6. 6. BUSINESS MODEL Seller uploads the picture and description of the item to be sold. Sale ends at predetermined time. High bidder and seller contact each other and make arrangements of shipment. Buyer sends funds to seller {money order, check, PayPal}, seller sends goods. Buyer and seller then grade each other through feedback forums. 6
  7. 7. Business Model – reason for eBay’s success Largest Online Trading Forum Largest Online Trading Forum Compelling Trading Environment Compelling Trading Environment Trust and Safety Programs Trust and Safety Programs Cost-Effective, Convenient Trading Cost-Effective, Convenient Trading Strong Community Affinity Strong Community Affinity Intuitive User Experience Intuitive User Experience 7
  8. 8. Business Model Seller Seller • Non refundable Insertion Fee • Additional listing options to promote • Final Value Fee 8 Buyer Buyer • Browsing and bidding Is free of charge
  9. 9. ACQUISITION OF PAYPAL PayPal uses existing electronic infrastructure of bank accounts and credit cards to allow “small” monetary exchanges online. Its convenient for small businesses and individuals, because they can collect online payments without difficult set-up. eBay acquired PayPal in 2002 and has integrated it throughout its website as a payment option for auctions. 9
  10. 10. MAJOR SERVICES AND FEATURES Authentication Services Get a second opinion on your item by using outside expertise. Verified Rights Owner (VeRO) Program Make sure that items do not violate intellectual property rights as there may be liability involved. Dispute Resolution An independent service that provides a neutral place to work out disputes online efficiently and effectively. 10
  11. 11. MAJOR SERVICES AND FEATURES • 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 • 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 11
  12. 12. MAJOR SERVICES AND FEATURES 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 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 12
  13. 13. COMPETITORS eBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers Amazon Yahoo ! Buy.com Autobytel.com MSN WalMart Home Depot Macy’s Sam’s Club 13 AOL Dell
  14. 14. eBAY VERSUS YAHOO FOR SELLERS(1/2) eBay Maximum Duration 10 Days Yahoo 14 Days eBay auctions end at the time the auction was created Yahoo allows you to set the ending time within a one-hour based on the starting or reserve range. any fees for listing auction not charge Fee price of an item each time an item items to the buyer or seller is listed up to five percent of the final to the buyer or seller when an Commiss closing price item ions fee for reserve auctions is sold Endin g Time Chances of More likely Buy & Sell Less likely a When aa page for the item gets created page for the item is created immediately,but it can take several immediately. The item is also added to new Item Is posted hours before the item gets added tolist of items and is searchable the the list of items and is searchable immediately. 14
  15. 15. eBAY VERSUS YAHOO FOR BUYERS eBay Items Charging for posting Unusual Thing Search Brows items Insuran ce Over 6 times more items Yes More likely to find Titles or titles & description Can limit within a category By title or by picture (if designated as part of the gallery ) Yahoo A lot fewer items No Not have as wide or deep of a selection Titles or titles & description Can limit within a category By title or by picture Automatic insurance for Not offer insurance sales Space Not provide space for pictures: Provides free space for auction item for You must place your picture files Pictures, so more items have pictures picture On some other site For you to see s 15
  16. 16. eBAY VS. COMPETITION- FACTS  eBay had great first mover advantage and brand name establishment in the U.S.  Google could also be a potential competitor but management does not see it as threat.  In the International markets though, Yahoo moved in first and EBay is suffering from that still.( Japan and other south Asian markets.  Amazon and yahoo stole most of the market share during three ebay crashes during 99.  EBay does have its supremacy in the U.S. with yahoo, Amazon and Google following leaders. 16
  17. 17. THREATS OR ISSUES • Bargaining power of suppliers. • Substitutes product or services such as b2b, b2c service providers. • Increasing competition from Amazon and yahoo. • No barrier to entry in the industry. • Buyer-seller frauds • Technology failure or/and change 17
  18. 18. eBAY’S REVENUE 2500 Revenue ($mil.) 2000 1500 1000 500 0 1997 18 2010
  19. 19. FINANCIAL ANALYSIS - REVENUE & NET INCOME Revenue(1000$) Revenue(1000$) 500000 Net Income(1000$) Net Income(1000$) 431424 400000 300000 224724 200000 100000 86129 0 1998 19 1999 2000 60000 50000 40000 30000 20000 10000 0 48294 7273 9567 1998 1999 2000
  20. 20. PROFIT OPPORTUNITY IN PROCESS New profit opportunity Delivery profit E-money Profit Trading Profit Delivery Payment Trading Listing 89% of TR Profit Selling Searching Profit 9% of TR Advertising 2% of Total Requirement Profit Revenues(2000 ) 20 Listing
  21. 21. REASON FOR SUCCESS Mature and diverse board of directors 7 outsiders, 1 insider, 1 related insider Strong management team lead by Meg Whitman. Senior staff consists of experienced managers from companies such as PepsiCo and Disney with an average of 20 yrs. of business experience and a strong vision for the company. Brand name development eBay has carefully developed a brand name based on ease and trust. They have created the defector online trading platform. 21
  22. 22. SWOT MATRIX 22
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  25. 25. COMPETITIVE PROFILE MATRIX (CPM) OF eBAY 25
  26. 26. COMPETITIVE PROFILE MATRIX (CPM) :OF eBAY 26
  27. 27. EXTERNAL FACTOR EVALUATION MATRIX )EFE) OF Ebay : 27
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  29. 29. SPACE MATRIX 29
  30. 30. :SPACE MATRIX 30
  31. 31. BCG MATRIX 31
  32. 32. FORCE ANALYSIS 5 (B2B, B2C, C2B,off-line…) Threat of substitute Threat of substitute Products or services Products or services Bargaining power Bargaining power Rivalry among Rivalry among of Suppliers of Suppliers Existing Competition Existing Competition (GM, HP…) (Yahoo, Amazon …) Barriers to entry 32 Buyers (GE..)
  33. 33. RECOMMENDATION To Be the World Leader in e-Market Place To Be the World Leader in e-Market Place S E R V I C E G L O B A L … B U S I N E S S M O D E L S Y S T E M eBay : 22.0M users, 265M items 33
  34. 34. RECOMMENDATION Services Services Depending on the category of product Depending on the category of product Back Ground Increasing of Community power Back Ground Increasing of Community power Trust issues between buyers & sellers Trust issues between buyers & sellers Strategy Strategy Broaden the eBay Trading Platform Broaden the eBay Trading Platform Foster eBay Community Affinity Foster eBay Community Affinity Enhance Features and Functionality Enhance Features and Functionality Target key product categories for special users Target key product categories for special users Develop new community tools Things Develop new community tools Things Enhance the community for women and old peoples  Enhance the community for women and old peoples To To  Add new features and services to help trade with greater ease  Add new features and services to help trade with greater ease Do Do  Expand Value-Adds Services ( community purchase)  Expand Value-Adds Services ( community purchase) Increase the Trust and Safety Programs Increase the Trust and Safety Programs 34
  35. 35. RECOMMENDATION Globalization Globalization Growth rate Decreases Growth rate Decreases Back Ground Back Ground To utilize the advantages of internet in globalization  To utilize the advantages of internet in globalization Homogeneity global market Homogeneity global market Strategy Strategy  Different strategies to enter new international markets  Different strategies to enter new international markets Things Things To To Do Do 35 Enforce Marketing in foreign countries Enforce Marketing in foreign countries Provide unified site and URL in each country Provide unified site and URL in each country Introduce country-specific services Introduce country-specific services Choose from building solely, acquiring a company or Choose from building solely, acquiring a company or partnering with strong local companies partnering with strong local companies
  36. 36. RECOMMENDATION Business Model & Strategic alliance Business Model & Strategic alliance Limit of P2P market size Limit of P2P market size Back GroundGreat potential market of B2C and B2B Back Ground Great potential market of B2C and B2B A new, rapidly evolving and intensely competitive area A new, rapidly evolving and intensely competitive area Strategy Strategy Things Things To To Do Do 36 Expand Business Model from P2P to B2C and B2B Expand Business Model from P2P to B2C and B2B Good relationship with partner Good relationship with partner  Have a partnership with bank, c-card,e-money, mobile Have a partnership with bank, c-card,e-money, mobile communication company, Google etc communication company, Google etc  Expand gradually Business model from P2P to B2C Expand gradually Business model from P2P to B2C  Develop the eBay's private brand product. Develop the eBay's private brand product.
  37. 37. RECOMMENDATION System Infrastructure System Infrastructure 15 System downs between Aug 2008 and Nov 2009 15 System downs between Aug 2008 and Nov 2009 Back Ground The threat of Hacking ( Deny of services ) Back Ground The threat of Hacking ( Deny of services ) The cost of system failure is so big The cost of system failure is so big Strategy Strategy Adapt to changing technologies and industry standard Adapt to changing technologies and industry standard Achieve to stability, availability and efficiency Achieve to stability, availability and efficiency  Build backup system for important system such as CPU Build backup system for important system such as CPU Disk,D/B, Network System, Power, Communication Line Things Disk,D/B, Network System, Power, Communication Line Things Downsize the computer system from Mainframe-level Sun  Downsize the computer system from Mainframe-level Sun To To to Linux (( ex: Google has 4,000 Linux server) to Linux ex: Google has 4,000 Linux server) Do Do  Acquire specialist for System, DB, Network,Program and etc  Acquire specialist for System, DB, Network,Program and etc Invest more money on System Infrastructure Invest more money on System Infrastructure 37
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