Connecting buyers and sellers globally

What is eBay?Online auction and shopping website

Offers three types of auction:i. Auction style listingsii. Fixed price formatiii. Fixed price format with best

offer

The history of eBay IncFounded in 1995Went public on 1998Has its own online pay service,

PayPal IncFirst CEO-Meg WhitmanJohn Donahoe took over in 2008

5 Amazing Facts1) Ebay was originally called

AuctionWeb

2) EBay was launched during

Labour Day in 1995 By French-born Iranian-American

computer programmer Pierre Omidyar

In his living room in San Jose,California

3) The first AuctionWeb logo

Was called Death Bar By eBay staffBoxy black-and-white logo

4) First item listed on eBay

Broken laser pointerSold for $14.83Experiment by Omidyar

5) Most expensive purchaseFrank Mulder’s Gigayacht(10 multi-

level VIP rooms,8 guest rooms,a movie theater,a helicopter pad)

Sold for $168 million in 2006To Russian billionaire Roman

Abramovich

The world’s largest online marketplace – where practically anyone can trade practically

anything…almost anywhere

Five Forces Model of Competition

Industry Rivalry - Amazon

Substitute -

Traditional Auction

Buyer – Bargain

Hunter/Professional buyers

Potential New

Entrants – Tech

barriers of entry does not exist

Supplier – Casual/Cor

porate seller

Meg Whitman (1998-2007) John Donahue (2008-Present)

Revolutionary strategy for eBay

CEO JOHN DONAHUE (2008

- PRESENT)

By 2008, eBay has fallen behind…

And thus,….

WILL THESE CHANGES……BE A GAME – CHANGING TRANSFORMATION OR SUICIDAL?

SWOT Analysis

Strengths

Brand Recognition

Popularity

Ownership of PayPal

Business Model

Weaknesses

Advertising revenue

Increased expectations

Limited control on fraud

Technology malfunctions

Opportunities

Increased internet usage

International expansion

Acquisition of yahoo.com’s online shop

Divestment of Skype

Threats

Consumer confidence

Seasonality

Ease of entry into market

Interest and foreign currency exchange rates

QUESTIONS

Question 1

Analyze the marketing environment and the forces shaping eBay’s business over the years.

• Early years- Marketing environment was simple and

dynamic- Few competitors- Threat of substitutes- Few suppliers- High importance of supplier’s products- Specialised products

Recently- Marketing environment complex

and dynamic- Many suppliers- More competitors- High importance of suppliers

product- Standardised and specialised

items.- Product differentiation

Question 2

How has the change in the nature of eBay sellers affected the creation of value for buyers.

- Fixed price, quick service and free shipping

Question 3

Do you agree or disagree with Donahoe that eBay’s current strategy doesn’t mean that certain sellers will lose.

- Disagree- Traditional retailers lose out

Question 4 Is eBay doing the right thing by

sticking to its current strategy. What changes, if any, would you recommend to Donahoe?

- Right thing to a certain extent - Have a fee reduction for auction

bidding systems