ITEC-610 Ebay Case Study


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Case study on eBay for UMUC class ITEC-610

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ITEC-610 Ebay Case Study

  1. 1. Case Study: ebay<br />ITEC 610<br />Scott Cnockeart<br />Benjamin Muthoka<br />Chris Lange<br />Murdock McCormick<br />
  2. 2. What is eBay?<br />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.<br />
  3. 3. eBay Background<br />1995 - Pierre Omidyar, In his home, created eBay and it was originally called Because the domain name was already registered, Echo was shortened to “e”, and eBay was born.<br />March 1998 - Meg Whitman, the name we all know, joined eBay.<br />September 1998 – eBay goes public<br />October 2002 – eBay acquires PayPal<br />(Mullen, 2008)<br />
  4. 4. First item sold on eBay was…. a laser pointer….<br />BROKEN<br />$14<br />X<br />
  5. 5. eBay Revenue History<br />(MSN, 2009)<br />
  6. 6. Web Auction Competitors<br />eBay is still a market leader in the online auction market commanding a respectable 17% online market share. <br />(BusinessWeek, Issue 4136 )<br />(O’Brien and Marakas, 372)<br />
  7. 7. Competitive Advantage<br />Superior customer service through the use of different technologies to provide online support. E.g. chat rooms, discussion boards and automatic email response technology. <br />Leveraging PayPal by increasing services such as the recently added iPhone application that has attracted thousands of Net shopping sites. <br />Improved communication between buyers and sellers through Skype, which at its acquisition had a 54 million customer base. <br />A commanding international market share especially in Europe with Germany generating a staggering $7 billion in annual sales second only to the U.S. <br />( O’Brien and Marakas, 2009)<br />
  8. 8. eBay vs. Amazon<br />
  9. 9. eBay Shortfalls<br />A decreasing international presence especially in majors markets like China. <br />Fierce competition from Google and Microsoft for online classifieds.<br />Declining sales which has seen Amazon gain 5 million more visitors while eBay lost 8 million in the same time period.<br />Claims of a non user-friendly website by online buyers. E.g. better search results from Google. <br />A time consuming and exhaustive vetting process that delays introduction of innovative technology into the market.<br />Disgruntled sellers due to a new feedback system that stands to put them at a disadvantage.<br />(BusinessWeek, Issue 4136 )<br />(O’Brien and Marakas, 372)<br />
  10. 10. Current Business Practices<br />(eBay Inc., n.d.)<br />eBay has positioned itself to be the worlds largest online marketplace. <br />The company has a presence in 39 markets, the US included <br />Almost 1 billion users worldwide <br />eBay has forever changed the idea of internet commerce<br />
  11. 11. Current Practices<br /><ul><li>Consumer benefits of eBay</li></ul>Provides an open trading forum for buyers and sellers to conduct business<br />Some sellers provide links to online stores <br />Provides an excellent opportunity for entrepreneurs to start a small business <br />The market controls the value of products being sold<br />Contains an extensive search database<br />Virtually anything can be located via search engine<br />Advanced features allows more search detail<br />(eBay Inc., n.d.)<br />
  12. 12. Current Practices, cont.<br /><ul><li>Consumer benefits of eBay, cont.</li></ul>User friendly interface<br />Items of interest can be browsed using different views<br />Sellers provide details of selected items<br />Items can be selected to watch<br />Personal online account creation<br />Contains recently purchased/won products<br />View items previously checked to watch<br />Access personal eBay mail from sellers<br />Experience the excitement of the process<br />Painless payment process via eBay owned PayPal<br />(eBay Inc., n.d.)<br />
  13. 13. Accompanying Services<br />Paypal online payment service<br />Built on our current financial system of banks and credit cards<br />Secure method to send and receive online payments effectively<br />Payment solutions global leader<br />Accepted by millions of merchants worldwide<br />Currently utilized on and off eBay<br />(eBay Inc., n.d.)<br />
  14. 14. Accompanying Services cont.<br />, apartment listing guide<br />Online Classifieds<br />Information on apt. availability and rates, roommates, virtual tours, moving services<br />Online Classifieds<br />People meet, share ideas, and trade locally<br />Available in hundreds of cites and regions globally<br />, Kijiji,, Intoko, <br />Netherlands;, German auto ads; <br />(eBay Inc., n.d.)<br />
  15. 15. Business Challenges<br />Users find eBay online auctions cumbersome<br />Competitors are breaking into online classifieds markets, providing free services searchable by location:<br />Google Base<br />Microsoft’s Windows Live Expo<br />eBay lost China’s market due to TaoBao; a company that allowed for more of a consumer to consumer approach to eCommerce<br />(O’Brien & Marakas, 372)<br />(Xiaojuan & Davison, 145-148)<br />
  16. 16. Potential Solutions<br />1) eBay could continue to make acquisitions1<br />eBay currently has a 25% stake in Craigslist<br />eBay has acquired online classifieds sites:<br />Kijiji<br />Gumtree<br />LoQUo<br />eBay completed acquisition of Skype in 2005 in an attempt to link buyers and sellers quickly and easily <br />2) eBay could continue to go global2<br />eBay has already expanded globally to over 22 countries<br />1: (O’Brien & Marakas, 372-373)<br />2: (Komiak, Komiak, Imhof, 187-204)<br />
  17. 17. Potential Solutions (continued)<br />3) Incorporate PayPal into Craigslist<br />4) Incorporate more on-site advertising and make eBay item postings free<br />(O’Brien & Marakas, 372-373)<br />
  18. 18. Analysis of Solutions<br />Based on a scale from 1-10; 10 being best<br />
  19. 19. Recommendation<br />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 <br />These costs can be recouped through the use of site advertising <br />
  20. 20. References<br />eBay inc. (n.d.). The eBay Company. Retrieved August 1, 2009, from<br />eBay inc. (n.d.). How eBay works. Retrieved August 1, 2009, from<br />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. <br />Maltby, E. (October 17, 2008). R etrieved August 01, 2009 from<br />McMillan, D. (2009, J une 0 6 ). Can eBay Get Its Tech Savvy Back? BusinessWeek, 413 6, 48-49.<br />MSN. (2009, n.d.). eBay Inc. Retrieved August 2, 2009, from<br />Mullen, A. (2008, n.d.). Learn how eBay began as a small business in someone&apos;s living room and grew into one of the top earning Websites on the Internet. Retrieved August 1, 2009, from<br />O’Brien, J. A. & Marakas, G. M. (2009). Management Information Systems. New York, NY: McGraw-Hill Irwin. <br />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. <br />