Executive Summary

eBay Inc. is an American internet consumer-to-consumer corporation that 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. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries.[3][4] eBay expanded from its original "set-time" auction format to include "Buy It Now" standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal[5]) and other services. In August 2009, eBay Inc. formed a partnership with General Motors enabling hundreds of GM dealers in California to help consumers negotiate purchase of new GM cars and trucks through the eBay online marketplace. Its marketplace transformed the Internet and the way many of us shop and do business worldwide. eBays marketplace, or marketspace is an online virtual trading platform for the sale of goods and services by a community of users that comprises individual buyers and sellers, as well as small business owners. eBay also provides auctions where it determines the price of items sold. VISSION MISSION. With more than 97 million active users globally (as of Q2 2011), eBay is the world's largest online marketplace, where practically anyone can buy and sell practically anything. In the Business segments presented in the case first is the Marketplaces, Platforms, and services which includes eBay.com, StudHub, Online Classifields, Online Advertising, Shopping.com, and Rent.com. Through a trusted online community facilitating trading with unknown partners on the Internet, eBay Inc. provides a trusted and safe trading environment by offering services which
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enables the consumers to be at ease in doing trading with eBay. The second segment is the Payments which is composed by PayPal and Bill Me Later transaction services. These services is available to any online or offline individual or business with an e-mail address and allows members to transact online. The third segment is the Communications which is composed of Skype, which was founded in 2003 and acquired by eBay in 2005. It is the worlds fastestgrowing Internet Communication software platform. Although there is a risk with Bill me Later even though its accounts are funded by CIT Bank, it is responsible for all functions related to the account. It initially funds consumers loans using cash from business activities and a line of credit. So it must find potential consumers that will really pay credits, because Future profitability depends on its consumers. eBays Competitors includes: online and offline retailers, distributors, liquidators, import and export companies, online and offline auctioneers, catalog and mail order companies, classifieds, directories, search engines, products of search engines, virtually all online and offline commerce participants (consumer to consumer, business to consumer and business to business), and online and offline shopping channels and networks. Its Economic Climate which composes of a weak global economic conditions, in addition to the mortgage and worldwide credit related financial crisis, are expected to limit revenue growth, particularly in the Marketplaces segment, which is closely tied to consumer purchase patterns. eBay Inc has its own Political and Legal environments which includes Sales Tax and other Taxes, Long tern Contractual Obligations, Pirated or Counterfeited items and Security Breach and Identity Theft.

eBays challenges expansion of both in the United States and internationally has placed a significant strain on management, operations, and financial resources. Particular areas that are strained include Website Usability were in growth in the number of products and Web site features has caused the site to become less user friendly, Website Stability were in increased volume and greater complexity requires additional expensive investments in hardware, software and personnel, Customer Account Billing were in transaction processing and revenue collection becomes more difficult as the number of transactions increase and consumers default on loans and lastly Customer Support were in it is challenges from greater trade activity and an increased number of users and provide good after service. eBays Future is anything but certain. It may need further analysis and needs a clear and well clear strategic pla to achieve its mission and vision to become the worlds number one marketplace.

Background/ History
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It all began with Pez Candy. One evening in September 1995, Pierre Omidyar, the founder of eBay, and his wife were discussing their desire to contact other Pez collectors. To solve the problem he created an online auction in the form of a sole proprietorship business. As a result, eBay was created over the Labor Day weekend by Pierre, a computer programmer, who devised a code that enabled and ran the eBay auction Web site from his home computer. Later in May 1996, eBay was incorporated in California and became public on September 24, 1998. The first eBay auction was also conducted on Labor Day. As of 2008, eBay has a 14 percent share in the global e-commerce with 86.3 million active users. On Labor Day weekend in 1995, computer programmer Pierre Omidyar wrote the code for what he called an "experiment": What would happen if everyone in the world had equal access to a single global marketplace? Pierre tested his new auction website by posting a broken laser pointer, which he was about to throw away. And to his surprise, a collector bought it for $14.83. The sale of a broken laser pointer was the beginning of a radical transformation in commerce. eBay is a remarkably efficient market created by connecting individuals who wouldn't otherwise be connected. It was the world's first example of online social networking. While skeptics questioned whether people would trust doing business with strangers online, Pierre firmly believed that people are basically good, and that any issues would work themselves out by the community. Since then, eBay has grown to have a presence in 39 markets (including partnerships and investments) with more than 90 million eBay.com users worldwide, trading more than $1,900 worth of goods each second. In 2002, the eBay community made it clear that they preferred using PayPal as an online payment method. So eBay acquired PayPal, which brought new efficiencies to e-commerce and redefined possibilities for eBay's future.

The company has since expanded by acquiring innovative businesses, such as Shopping.com, StubHub, Bill Me Later and others, which have positioned the company as the global leader in ecommerce and payments. Building on Pierre's entrepreneurial legacy, eBay continues to passionately believe in the potential of technology to connect people around the world. Read more about our global portfolio of businesses and how we continue to support entrepreneurship. Founder Pierre Omidyar as part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus. One of the first items sold on eBay was a broken laser pointerfor $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of broken laser pointers." The frequently repeated story that eBay was founded to help Omidyar's fiance trade Pez candy dispensers was fabricated by a public relations manager in 1997 to interest the media, which were not interested in the company's previous explanation about wanting to create a "perfect market". This was revealed in Adam Cohen's 2002 book, The Perfect Store, and confirmed by eBay. Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was hired as the first president of the company in early 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. Growth was phenomenal; in January 1997 the site hosted 2,000,000 auctions, compared with 250,000 during the whole of 1996. The company officially changed the name of its service from AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.com,

but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com. In 1997, the company received $6.7 million in funding from the venture capital firm Benchmark Capital. Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the company had 30 employees, half a million users and revenues of $4.7 million in the United States. eBay went public on September 21, 1998, and both Omidyar and Skoll became instant billionaires. eBay's target share price of $18 was all but ignored as the price went to $53.50 on the first day of trading. As the company expanded product categories beyond collectibles into almost any saleable item, business grew quickly. In February 2002, the company purchased IBazar, a similar European auction web site founded in 1995 and then bought PayPal on October 14, 2002. In early 2008, the company had expanded worldwide, counted hundreds of millions of registered users, 15,000+ employees and revenues of almost $7.7 billion. After nearly ten years at eBay, Whitman made the decision to enter politics. On January 23, 2008 the company announced that Whitman would step down on March 31, 2008 and John Donahoe was selected to become President and CEO. Whitman remained on the Board of Directors and continued to advise Donahoe through 2008. eBay, being the first virtual online business community, empowers entrepreneurial individuals to become e-commerce business owners, which offers a sense of community to both buyers and sellers that is sustained by communication and high transaction rates on a wide selection of products,goods and services. eBays success is sustain through communications and trust. Step 1: Vision Mission, Objectives and Strategies.

Vision Mission (based on the case) We intend to achieve our mission of creating the worlds online marketplace by improving and expanding across three main areas: categories, formats, and geographies (2005 annual report) We intend to achieve our mission of creating the worlds leading e-commerce franchise by building upon our core Marketplaces business and building our adjacent businesses. (2006 Annual report) We intend to continue to work toward our mission of creating the worlds leading e-commerce franchise by investing in our core Marketplaces segment and continuing to build our adjacent Marketplaces businesses. (Based on 2007 Annual Report). Objectives Based on the Vision Mission eBays plan is to expand in main areas: categories, formats, communications, services and marketplace (geography). Strategies The strategic statement that best describes eBays activities could be formulated as follows: EBay allows customers to create individual auctions and online stores in order to sell used and new products. This process is facilitated by the ability to create communities of interest, providing secure transaction services and a peer review process in a global environment. Therefore eBay sees itself as a facilitator for product-related transactions over the Internet. This particular statement describes the companys main processes and shows the opportunities eBay wants to pursue. Step 2: Develop Vision and Mission statement for the organization
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Vision We intend to achieve and provide the needs of consumers by providing quality products through effective and efficient online service and become the worlds leading e-commerce industry in order to ensure trust in the online community

Mission We intend to dominate the online marketplace by expansions and improvements to offer a sense of community to both buyers and sellers. And provide a safer online experience to ensure trust and increase profitability.

Step 3: Organizations external Opportunities and Threats Opportunities: Acquisitions provide new business strategy opportunities

 Market development in new and emerging markets like China and India which they are considered as the most populated area can be a huge opportunity
Market penetration/ Improve market services in current markets can make a large number

of potential customers to subscribers Threats Success attracts greater competition Attacks by illegal practices might happened Some cost like credit card charges cannot be easily controlled by eBay

Step 4: Competitive Profile Matrix

eBay amazon.com Yahoo uBid

Key Factors

Weigh t

Rating

Score

Rating

Score

Rating

Score

Rating

score

Technology Expertise Skills and Capabilities .15 8 1.20 8 1.2 7 1.05 5 .75

Workforce Product Innovation

.05 .20

7 9

.35 1.80

5 7

.25 1.40

6 8

.30 1.60

5 6

.25 1.20

After sales service

.05

.15

.40

.15

.15

Marketing Brand name .15 10 1.50 10 1.50 9 1.35 4 .60

Customer service

.10

.60

.80

.60

.50

Accuracy of Billing Warranties Advertising

.10 .10 .10

9 6 8

.60 .90 .60

7 8 6

.70 .80 .60

7 6 7

.70 .60 .70

7 5 3

.70 .50 .30

TOTAL

1.00

66

7.90 67

7.65 59

7.05

43

4.95

According to the constructed Competitive Profile Matrix the strong points and the weak points of the organizations are as follows
Strong points

Expertise in technology
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Workforce Product Innovation Brand Name Accuracy of billing Advertising

Weak points After sales service Customer service Warranties

The identified weaknesses are due to activities eBay performs and have no immediate effect, as they dont affect operations.

Step 5: External Factor Evaluation Matrix Opportunities Acquisitions Market Development Weight Rating Weighted Score .20 .15 4 3 .80 .45
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Market Penetration Threats

.20

.80

Success attracts competition .15 Illegal practices Credit card charges TOTAL .15 .15 1.00

3 3 3

.45 .45 .45 3.4

Total weighted score is 3.4 indicates that the business has a strong external ability to

respond to external factors of the organization.

Step 6: Organizations Strengths and Weaknesses Strengths eBay is the leading global brand for online auctions
The company takes advantage of the benefits of Customer Relation Management

(companys interactions with customers, clients and sales prospects)

eBay has become a generic term for online auctions

Weaknesses
Open to fraudulent activities 12

 System breakdowns could affects trading activities

Step 7: Internal Factor Evaluation Matrix Internal Strengths eBay Global Brand for auction Customer Relation Management Generic Brand Weaknesses Fraudulent activities System Breakdown in trading activities TOTAL .20 .10 1.00 3 2 .60 .20 3.20 Weight Rating Weighted Score .20 .20 .30 3 3 4 .60 .60 1.20

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 Total weighted score is 3.2 indicates that the business has a strong internal ability to respond to internal factors of the organization.

Step 8: SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, QSPM Matrix SWOT Matrix Strengths Leading Global Brand for auctions Customer Relations Management Known Generic Brand for e-commerce Opportunities Acquisitions provide new business strategic opportunities Market Development Market Penetration/ Diversification SO Global Expansions Maintain simplicity of interaction with the online communitys capability WO Online Banking Diversify products Systems for Online verification of products Strategic alliance with courier companies Penetration of all types of market Weaknesses Fraudulent Activities System Breakdown on trading activities

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Threats Attracts competition Illegal Practices Credit Card charges not controllable by eBay

ST Acquisition strategy global expansion Use online security options for verification and authentication Reinforce marketing management and systems

WT Alliance to postal services Authentication of consumers identity

The analysis shows using this strategic process, it shows competitive industry data and identifies key areas for improvement and develops a strategic plan to success, by utilizing the Strengths and the Opportunities mentioned in the matrix to be in action and also maintain the standard of the firm. And also by turning the weaknesses into opportunities that may help in future decisions of the organization

SPACE MATRIX Factors determining environment and stability Technological change Rate of inflation Demand variability Price range of products Barriers to market Competitiveness Many High Large Wide Few High 0 1 2 3 4 5 6 Few 0 1 2 3 4 5 6 Low 0 1 2 3 4 5 6 Small 0 1 2 3 4 5 6 Narrow 0 1 2 3 4 5 6 Many 0 1 2 3 4 5 6 Low

Price elasticity of demand elastic 0 1 2 3 4 5 6 inelastic

Average is 3 score is -3.0 15

Industry Strength Growth Profit Financial stable Technological Low Low Low Simple 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 Complex

Resourcefulness Inefficient 0 1 2 3 4 5 6 Efficient Capital Entry to market productivity High Easy low 0 1 2 3 4 5 6 Low 0 1 2 3 4 5 6 Difficult 0 1 2 3 4 5 6 High

Average 4.25, score is 4.3

Competitive Advantage Market share Product quality Product life cycle Product replacement Customer loyalty Small Inferior Late variable 0 1 2 3 4 5 6 Large 0 1 2 3 4 5 6 Superior 0 1 2 3 4 5 6 Early 0 1 2 3 4 5 6 Fixed

Variable 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 High

Competitors capacity Low Technology Vertical integration Low Low

Average 4 score -1.9

Financial Strength ROI Leverage Liquidity Capital Low 0 1 2 3 4 5 6 High

Not balance 0 1 2 3 4 5 6 Balanced Not balance 0 1 2 3 4 5 6 Balanced High 0 1 2 3 4 5 6 Low

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Cash flows Exit to market risks

Low Difficult Much

0 1 2 3 4 5 6 High 0 1 2 3 4 5 6 Easy 0 1 2 3 4 5 6 few

Average 3.80 score 3.9

Aggressiveness eBay has a competitive advantage and is in the financial position to

protect it
Competitiveness competitive advantage exists, but eBay still has to improve its

situation in penetrating and emerging markets and enhance more on e-retailing

The main markets of eBay are online auctions and e-retailing, the company has a strong

position to enhance its situation there.

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BCG Matrix STARS

eBay Amazon.com Classified Advertisements Amazon Auctions

QUESTION MARKS
Live Auctions

CASH COWS
Flea Markets uBid

DOGS
Yahoo

Putting together eBay and its competition, the online auction industry shows different

company types.
eBay, Amazon.com, Classified Ads and Amazon auctions as a dominated market share

and growth
Flea Markets and uBid as has dominated a high market share but a little growth Live auctions as to low market share which only caters the wealthy people but high

growth
Yahoo as otherwise liquidate but delivers cash

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IE Matrix 4 1 GROW & BUILD

Market Penetration Acquisitions Market Development

HOLD & MAINTAIN

Market Penetration Product Development Customer Relations Generic Brand Global Brand

HARVEST OR DIGEST
Illegal Practices System Breakdown Fraudulent Activities

These are the current position of the divisions for the future for the better results. Based

on the Internal and External Factors that affects the organization. It gives us the clearing view what to strategically do in the future.

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QSPM Matrix Key Factors Internal Strengths Market Development Weight Attractive Score Total Attractive Score eBay Global Brand for auction Customer Relation Management Generic Brand Internal Weaknesses Fraudulent activities System Breakdown in trading activities TOTAL External Opportunities Acquisitions Market Development Market Penetration External Threats Success attracts competition Illegal practices .15 3 .45 4 .60
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Market Penetration Attractive Score Total Attractive Score

.20

.60

.60

.20

.60

.60

.30

1.20

1.20

.20 .10

3 2

.60 .20

4 3

.80 .30

1.00

3.20

3.50

.20 .15 .20

4 3 4

.80 .45 .80

3 4 3

.60 .60 .60

.15

.45

.30

Credit card charges TOTAL

.15 1.00

.45 3.4 6.60

.30 3 6.50

Total Sum of Attractiveness Score

Compared strategies are close to each other. Therefore the organization must averagely

hold and maintain and enhance more on market development and market penetration to achieve success.

Conclusions Strategic actions: Maintain global growth initiative Acquisitions (develop new markets) New markets New products Adopt into different cultures

Technological development Rapid application development

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Selling new applications/programs Creating standards for the industry Programme interface and developers programme

Security Back up systems Online verifications Enhance trustee services Online banking improvements Enhance after sales services

Reinforcing the Marketing department Improve image through advertising Global branding to make eBay a generic brand

Recommendations

I choose Maintaining global growth initiative as a strategy to motivate consumers, by making Acquisitions (develop new markets), new products and adopt into different cultures. It has an advantage of a wide range of promotion because it will encourage consumers to do e-retailing and also catch the attention of consumers. And it can also provide convenience for the consumers because they are introduced to new products.
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Moreover, the following recommendations are advance;

a.

eBay must develop their strategies to ensure great demand, high profit return and to meet their target market, put up securities to ensure no fraudulent activities may happened through authentication and verifications

b.

eBay must reinforce the marketing department to improve image in through advertising and by global branding to make eBay a generic brand for consumers.

Bibliography http://www.ebayinc.com/who http://en.wikipedia.org/wiki/EBay http://www.ebayinc.com/history http://digitalenterprise.org/cases/ebay.html https://mm.jpmorgan.com/stp/t/c.do?i=6D588-517&u=a_p*d_301789.pdf*h_2kkrp0e4 en.wikipedia.org http://www.maxi-pedia.com/SPACE+matrix+model+strategic+management+method

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http://www.ebayinc.com http://www.valuebasedmanagement.net/methods_bcgmatrix.html http://www.kulzick.com/stu/IEmatrix.htm http://www.mba-tutorials.com/?s=Internal+External+matrix www.google.com

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