eBay is an American multinational corporation that operates eBay.com, an online auction and shopping website. It became the dominant player in the online auction industry through its unique business model that connects buyers and sellers. eBay has had significant growth, with revenues increasing from $225 million in 1999 to $6 billion in 2006. However, eBay faces some challenges to its continued success, including weaknesses penetrating some foreign markets like Japan, and ensuring legal and safe transactions across its global operations. The document provides recommendations on how eBay can address issues like translation and expand opportunities through acquisitions, partnerships, and better serving its international community of users.

2. Presented by:
Sadia Afrin

3. Executive summary
The dominant online trading platform, eBay Inc. is an American multinational internet consumer-to-consumer
corporation, headquartered in San Jose, California. . The company eBay was found in 1995 and since then they
have had much growth and success over the years. It is now a multi-billion dollar business with operations
localized in over thirty countries. The company manages eBay.com, an online auction and shopping website in
which people and businesses buy and sell a broad variety of goods and services worldwide. They became the
dominant player in the online auction house industry through their unique business model. Their business
model united buyers and sellers in an online marketplace and attracted 221 million registered users. Their
unique business model enabled e-commerce at multiple levels including local, national, and international
through an array of websites that they have acquired. Sellers paid eBay for the opportunity to design, set up,
monitor, and supervise their particular auctions while buyers used eBay's software to search for products and
place bids. After the auction clock ran out, the seller contacted the winning bidder to negotiate payment and
shipping terms. For this matchmaking service, eBay charges between 7 and 18 percent of the closing auction
price. In 1999, net revenues topped $225 million. By 2006, revenues grew to $6 billion with net income of
$1.1 billion. The company projects revenue near $7.5 billion in 2007. Core vision To support interaction in the
eBay community by providing a useful online platform to value-oriented buyers and sellers; to uphold the
principles of trust and safety, guaranteeing low fraud losses and high transaction protection to its community;
and to focus on market efficiency by delivering state-of-the-art information technology.
eBay acquired several online competitors such as PayPal, Rent.com, Shopping.com and most recently a
partnership with Xiu.com, eBay Style. These trading platforms allowed eBay to offer distinct services and
target-specific market niches. This allowed them to penetrate new market spaces and attract a range of users.
The company also expanded internationally and have been successfulin certain markets. eBay was considered
a leader in each of its market with the except of Japan and China. It is having a difficult time expanding into
the Asian markets, especially in China. eBay’s first attempt into China’s market was through the acquisition of
a Chinese online auction company, Eachnet. After several years eBay then decided to partner with Beijing-
based Tom Online in late 2006.
One of the keys to eBay’s extraordinary success is its ability to turn the enormous volumes of data it generates
into useful insights that its customers can glean directly from the pages they frequent. To accommodate eBay’s
explosive data growth—its data centers perform billions of reads and writes each day—and the increasing
demand to process data at blistering speeds, eBay needed a solution that did not have the typical bottlenecks,
scalability issues and transactional constraints associated with common relational database approaches. The
company also needed to perform rapid analysis on a broad assortment of the structured and unstructured data it
captured.
eBay believes it has optimized these factors, but its competitors still have opportunities for improving
performance in these areas which will make the market more competitive. According to its 2010 SEC filing
‘Our growth strategy is focused on reinvesting in our customers by improving the buyer experience and seller
economics by enhancing our products and services, improving trust and safety and customer support,
extending our product offerings into new formats, categories and geographies, and implementing innovative
pricing and buyer retention strategy.’ Well, we do believe that ebay is now in its pick form and will take
measures to cover its faults and maintain its position in the market.

4. eBay’s Weaknesses
Like any company, eBay has weaknesses. They are not able to do everything to the best of their abilities.
A lack in ability to monitor all illegal activity as well as failure in some foreign markets is two
weaknesses of eBay.
 Inability to Measure Illegal Activity on Site
EBay has taken many precautions to prevent illegal activity on their site. They estimate that only 1
percent of transactions on their site involve fraud. The customers however disagree to some extent.
Some say that there are as much as 10 percent fraudulent transactions. EBay has no real way to
measure the extent of illegality on their site.
 Inability to Penetrate Some Foreign Markets
Penetration in foreign markets is crucial to the success of online auctions. EBay has done an
outstanding job of penetration in foreign markets. However, they have been unable to take over one
of the most crucial foreign markets, Japan. Japan is one foreign market that is on the rise. They are
becoming more prosperous and use of the internet is growing. If eBay is not able to gain ground in
this market it could hurt its foreign market standing.
 Lack of In-Depth Descriptions for Products
Amazon.com boasts in-depth product descriptions for all merchandise sold on their site. This is not
one of eBay’s outstanding features. The lack of description in products could be a factor in the
amount of counterfeit and wrongly identified products that are sold to customers.
 Technology Malfunctions
Technology malfunctions are always going to be a factor when dealing with websites and online
shopping. eBay must take measures to keep malfunctions as low as possible to retain happy
customers and to keep hackers out of personal PayPal and eBay accounts.

5. eBay’s Opportunities
EBay must continue to search out new opportunities for its company. Continuing its growth and
innovation is crucial to continuing its success. eBay can continue to seek alliances, partnerships, and new
customers to continue its reign as number one.
 Changing Lifestyles of People
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.
 Acquisition of Shop Yahoo.com
WWW.Yahoo.com’s shopping site is very weak in the online auction industry. eBay should explore
the possibility of acquiring their shopping site, along with its members and alliances already formed to
broaden their customer base. EBay already has partnerships with Yahoo.com in other areas so this
acquisition would benefit
both parties.
 Continued International
Expansion
As internet use continues
to grow throughout the
world eBay must take
every opportunity to enter
desirable international
markets. With the amount
of internet users already
registered on eBay in the
United States continued
international expansion is
critical.
 Increasing Use of the
Internet
The internet is being used more and more each day. eBay can take this opportunity to expand and
penetrate new markets.
 Expand the eBay Community
For continued customer satisfaction eBay can increase its community feel. With new resources and
sites tailored specifically to their community member’s eBay will continue to be the most highly
respected internet auction site by its members.
Statement of the Problem
As the eBay is becoming global, they are dealing with few challenges that they are currently facing such as:
i. Translation software weaknesses
ii. Various rules and regulations
iii. Cultural attitudes
iv. Pace of international expansion

6. A great strategy defines the perspectives and tools managers use to appraise the company’s present situation,
identifies the direction the company should go and determine how the company will get there. The
fundamental principle is on how to create value. A value that measure the firms capability to sell what it makes
for more than the cost incurred to make it. Operationally, the strategy of differentiation should be exercise in
able to convert customer insights, skilled and creative product development, persuasive marketing programs
and premier reputations for quality into superior value creation. We find it fit to eBay to continuously develop
unique features that are impossible to match or copy and lead buyers to prefer their goods and services versus
those by rivals.
 Technology availability to users - as eBay localize their website around the world, they should also
keep up with social media trends and mobile phones application for them to stay ahead of competition.
Technology will enable eBay to offer new attractive services for loyal and new users in an easy and
convenient way.
 As eBay keep on expanding internationally they should also look for additional acquisitions or
partnerships of other online auction sites,
 eBay should expand community services as a way to educate their loyal and prospective customers in
selling their products online with the use of internet.
Recommendation
The fundamental value of strategy for the international company is to manage the tension between global
integration and local responsiveness in a way that converts a unique strategy into superior value. At this time,
companies must identify the force of the particular change, estimate the impact it may have on their industry’s
structure, include changes in the long term growth rate, new technologies, and manufacturing innovations that
revise cost and efficiency frontiers and technical expertise across countries, change in government regulations
or the entry or exit of major firms. Given the growing appreciation of the performance and the competitive
benefits a core competency should be linked in the value chain. Technically a core competency is a special
outlook that creates unique value for the firm by creating an acknowledged thread that runs through all of the
firm’s value activities like information management and product distribution system. For eBay, thought is the
main problem of the translation software that they used. We therefore recommended that the sellers
(customers/clients) should include two translations in the product description (English and the native language)
to make the site command tools as the concern of language translation for eBay though they should be
responsible in monitoring the message content. With regards to various rules and regulations and cultural
issues, eBay may maintain the fundamental divergences in consumer tastes and preferences across countries.
No matter the moderating functions of money or technologies, the reasoning goes differences in consumers’
tastes and preferences across countries due to culturalpredisposition, historical legacy, emergent nationalism
and economic prosperity. eBay should consider that “Consumers prefer goods that are sensitive to their way of
life. ”. When it comes to government policies, eBay should determine how to best configure and coordinate its
value chain so that it provides the necessary degree of local responsiveness without jeopardizing its capability
to create value.

7. eBay is ideal for a starting business all the way up to booming business to get into the electronic retail aspect
of expanding their business or simply “cleaning out the garage” you have the ability to profit by items you no
longer use, or even items that are new. The online tools are available for someone new to the electronic retail
community and help you to understand how you can make eBay profitable to you. A great resource for anyone
looking to start up an electronic retail business.