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eBay
eBay Analysis- Lam Le, Hyunah, Sally, Daniel
1. Introduction2. Business Model3. Value chain4. Competitive forces5. Financial Situation6. Challenges7. Long-term Growth8. Recommendations
Table of Contents
Founded in 1995 by Pierre Omidyar
#1 in e-commerce, online payment and
voice over Internet
Store no inventory & Produce no products
16,200 people (including temporary employees)
eBay Overview
81,000,000 average monthly visitors
133,096,249 concurrent listings
$60,146,000,000 PayPal transactions
eBay Overview
eBay: “ technology has always been a
key enabler of our growth and a tool to connect and
empower millions of people globally”
MarketplacesProvide platforms for online commerce
PaymentsProvide online payment solutions
CommunicationsProvide low-cost connectivity
eBay Businesses
Seller Buyer
Product categorie
s
Communication
Sells
Pays
Feedback
Fees
Acquisition & Partnerships
Network
eBay Business Model
Strategic Alliance and Acquisition
LegalHuman ResourceTechnology
Marketing• Word of mouth•Partnerships • Classifieds websites
Product Categories• Old and new • Variable
Purchasing process• Traditional auction• Buy it now• Fixed price
Communication• Ask a question• Skype• Click to call
Payment• Variable• Reliable
Peer review
Customer services• A Rules, Trust and Safety committee• Voices• Community Wiki• My Collectible
Value Added
eBay Value chain
New Market Entrants- Froogle
- The industry is very attractive with no
significant barriers to enter
Substitutions
- Traditional retail
- Switching cost from
online auction to traditional retail is high
Buyers- Strong buyer
bargaining power with
many options in the
industry
Suppliers- Strong bargaining power
for software suppliers - Weak bargaining power
for product suppliers
Rivalries - Strong competitors
(Amazon, Yahoo, MSN, FNAC)- Others (ubid.com,
overstock.com, CQout.com, bidville.com)
eBay Competitive Forces
Net Income
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q30
100
200
300
400
500
600
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Net incomeLink relativeYear to year
$ Millions
MARKETPLACES
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q30
200
400
600
800
1000
1200
1400
1600
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Internet Auc-tion
Link relative
Year to year
$ Millions
PAYMENTS
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3520
540
560
580
600
620
640
660
680
700
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Paypal
Link relative
Year to Year
$ Millions
INCOME FROM OPERATION
07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q31700
1800
1900
2000
2100
2200
2300
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Total operation income
Link Relative
Year to Year
$ Millions
STOCK PRICE IN 10 YEARS
STOCK PRICE IN 5 YEARS
STOCK PRICE IN 1 YEAR
• Exposure to large contingent liabilities due to litigations
• Insufficient screening process to control counterfeit products
Weaknesses
• Exposure to internet fraud and security concerns.
• Increased business risks because of technological obsolesces and reliance on third parties for licenses
• Unavailability of services leads to loss of income
• Increasing competition
Threats
Challenges
Valuable Assets- Strong market position- Effective Integration of
segments- Efficient business model- Rapid growth of internet display and classifieds ads- Increasing popularity of
used goods- Increasing reliance on
alternative payment systems due to safety
issues - Rapid international
expansion
Rareness- Strong market
position- Efficient
business model
Imitability- Efficient
business modelOrganization
Support
Can eBay still Grow?
• Make eBay interface easier to use
• Improve value and selection by
combining fixed price with auction-style listing
• Expand Payment segment, i.e. Paypal
Recommendations
• Expand product and service base
• Acquisition or mergers must fit strategic business of the company.
• Diversify, but unprofitable/unfit businesses should be closed
Recommendations