Ebay Case Analysis

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Category: Business and Industry

Date Submitted: 01/17/2010 09:36 PM

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eBay Case Analysis

Executive Summary

eBay is the world¡¦s largest and most popular person-to-person trading community on the internet and it intends to keep it that way. Despite their unique business model, they have 2 pressing problems: (1) safety and fraud issues and (2) the entry of Amazon.com into the online p2p auction arena. It is recommended that they: (1) acquire different companies to complement their current services, (2) implement new trust and safety policies, and (3) enter online business-to-consumer retailing.

Current Assessment

SWOT Analysis

A detailed SWOT Analysis (Appendix A) of eBay has been done up to capitalize on opportunities with its strengths and eliminate threats through the improvement of their weaknesses. eBay, who controls 70% of the market share in 2000, has the first-mover advantage for being the pioneer of such a business model. Being public listed has also helped them raise hundreds of millions of dollars to either expand their services or act as a buffer against threats through strategies like acquisitions. eBay has also formed several complementary alliances, such as with AOL to reach out to potential customers. Known for building a trading community with a ¡§human touch¡¨, this distinct competency sets itself apart from the rest that it is the 3rd most recognizable internet brand in the US.

Despite these strengths, eBay are unable to monitor all transactions and are liable for lawsuits involving either fake or illegal merchandizes. This could create unnecessary escalating expenses for the company and damage the image of a personable website. Fraud is another issue that concerns eBay. If they don¡¦t deal with it, it could cause them to lose existing customers and non-eBay users might attach a sense of negativity to their brand personality.

Still, they are many opportunities for them as a company to grow. First, they can further expand their market by targeting the non-internet consumer to consumer market. For...