Legend Reports That The Site Attracted No Visitors In Its First 24 Hours. The Site Became Ebay In 1997 And By 2012, It Had 112 Million Active Users Globally Defined As Users Who Have Bid, Bought Or Listed An Item During The Preceding 12 Month Period, With The Total Worth Of Goods Sold On Ebay $60 Billion, Which Is Equivalent To $2,000 Every Second. Total Revenue Was $8.7 Billion.

Presented by:

Sadia Afrin

Executive summaryThe 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 successful in 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.

eBay’s WeaknessesLike 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 SiteEBay 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 MarketsPenetration 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 ProductsAmazon.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 MalfunctionsTechnology 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.

eBay’s OpportunitiesEBay 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 PeoplePeople 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 ExpansionAs 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 InternetThe internet is being used more and more each day. eBay can take this opportunity to expand and penetrate new markets.

Expand the eBay CommunityFor 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 ProblemAs the eBay is becoming global, they are dealing with few challenges that they are currently facing such as:

i. Translation software weaknesses

MARKETPLACE

Finanacial services

Business service marketplace

Supperting businesses (auto & computer dealers, etc)

eBay seller About me pages

eBay seller stores

ii. Various rules and regulationsiii. Cultural attitudesiv. Pace of international expansion

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.

RecommendationThe 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 cultural predisposition, 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.

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.