eBAY

S/LT ADEEL PN

MR. SHAFEEUDDIN

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SCHEME OF PRESENTATION

History IntroductionCompany profileBusiness modelAcquisition of PAY PALCompetitorsFinancial analysisSWOT analysis5 force analysisRecommendations

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HISTORY

• 1995 – founder Pierre Omidyar, graduate from Tufts University, encouraged by his wife’s hobby.

• Skoll, Omidyar’s partner joined him as first president.

• 1996 – incorporated in San Jose, CA• Sept. 1998 – eBay first IPO. $18 per stock.• 97, Meg Whitman, joins as CEO. HBS

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INTRODUCTION

An online auction platform that facilitates transaction between buyers and sellers of goods and services

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MISSIONMISSIONeBay's mission is to help practically anyone trade practically anything on earth.eBay's mission is to help practically anyone trade practically anything on earth.

MARKETMARKET

eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services

eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services

COMPANY PROFILE – Mission & market

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BUSINESS MODEL

Seller uploads the picture and description of the item to be sold.

Sale ends at predetermined time.High bidder and seller contact each other and

make arrangements of shipment.Buyer sends funds to seller {money order, check,

PayPal}, seller sends goods.Buyer and seller then grade each other through

feedback forums.

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Business Model – reason for eBay’s success

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Largest Online Trading ForumLargest Online Trading Forum

Compelling Trading EnvironmentCompelling Trading Environment

Trust and Safety ProgramsTrust and Safety Programs

Cost-Effective, Convenient TradingCost-Effective, Convenient Trading

Strong Community AffinityStrong Community Affinity

Intuitive User ExperienceIntuitive User Experience

Seller Seller

• Browsing and bidding

Is free of charge

• Non refundable Insertion Fee

• Additional listing options to promote

• Final Value Fee

Business Model

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Buyer Buyer

ACQUISITION OF PAYPAL

PayPal uses existing electronic infrastructure of bank accounts and credit cards to allow “small” monetary exchanges online.

Its convenient for small businesses and individuals, because they can collect online payments without difficult set-up.

eBay acquired PayPal in 2002 and has integrated it throughout its website as a payment option for auctions.

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MAJOR SERVICES AND FEATURES Authentication ServicesGet a second opinion on your item by using outside expertise.

Verified Rights Owner (VeRO) ProgramMake sure that items do not violate intellectual property rights as there may be liability involved.

Dispute ResolutionAn independent service that provides a neutral place to work out disputes online efficiently and effectively.

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• eBay Professional Services Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals

• eBay Local Trading eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest

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MAJOR SERVICES AND FEATURES

MAJOR SERVICES AND FEATURES

eBay Premier eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world

eBay Live Auctions Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses

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COMPETITORS

Amazon

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Buy.com

Yahoo!

MSN

Wal-Mart

Macy’sSam’s Club

Autobytel.com

Dell

Home Depot

eBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers

AOL

eBAY VERSUS YAHOO FOR SELLERS(1/2)

eBay YahooMaximumDuration 10 Days 14 Days

Ending

Time

eBay auctions end at the time the auction was created

Yahoo allows you to set the ending time within a one-hour range.

Feebased on the starting or reserve price of an item each time an item is listed

not charge any fees for listing auction items to the buyer or seller

Commissions

up to five percent of the final closing price fee for reserve auctions

to the buyer or seller when an item is sold

Chances ofBuy & Sell More likely Less likely

When a new Item Is posted

a page for the item gets created immediately,but it can take several hours before the item gets added to the list of items and is searchable

a page for the item is createdimmediately. The item is also added tothe list of items and is searchable immediately.

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eBAY VERSUS YAHOO FOR BUYERS

eBay YahooItems Over 6 times more items A lot fewer items

Charging for posting

Yes No

UnusualThing

More likely to find Not have as wide or deep of a selection

SearchTitles or titles & descriptionCan limit within a category

Browsitems

By title or by picture (if designated as part of the gallery )

Space for

pictures

Not provide space for pictures:You must place your picture files On some other site

Provides free space for auction itemPictures, so more items have picturesFor you to see

Titles or titles & descriptionCan limit within a categoryBy title or by picture

Insurance

Automatic insurance for sales

Not offer insurance

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eBAY VS. COMPETITION- FACTS

eBay had great first mover advantage and brand name establishment in the U.S.

Google could also be a potential competitor but management does not see it as threat.

In the International markets though, Yahoo moved in first and EBay is suffering from that still.( Japan and other south Asian markets.

Amazon and yahoo stole most of the market share during three ebay crashes during 99.

EBay does have its supremacy in the U.S. with yahoo, Amazon and Google following leaders.

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THREATS OR ISSUES

• Bargaining power of suppliers.• Substitutes product or services such as b2b,

b2c service providers.• Increasing competition from Amazon and

yahoo.• No barrier to entry in the industry.• Buyer-seller frauds• Technology failure or/and change

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eBAY’S REVENUE

0

500

1000

1500

2000

2500R

ev

en

ue

($

mil.

)

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1997 2010

FINANCIAL ANALYSIS - REVENUE & NET INCOME

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86129

224724

431424

0

100000

200000

300000

400000

500000

1998 1999 2000

Revenue(1000$)Revenue(1000$)Revenue(1000$)Revenue(1000$) Net Income(1000$)Net Income(1000$)Net Income(1000$)Net Income(1000$)

7273 9567

48294

0100002000030000400005000060000

1998 1999 2000

PROFIT OPPORTUNITY IN PROCESS

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Requirement

Deliveryprofit

E-moneyProfit

TradingProfit

Listing Profit

SellingProfit

AdvertisingProfit

Delivery

Payment

Trading

Listing

Searching

2% of Total Revenues(2000)

89% of TR

9% of TR

New profit opportunity

REASON FOR SUCCESSMature and diverse board of directors

7 outsiders, 1 insider, 1 related insiderStrong management team lead by

Meg Whitman. Senior staff consists of experienced managers from companies such as PepsiCo and Disney with an average of 20 yrs. of business experience and a strong vision for the company.

Brand name development eBay has carefully developed a brand name based on

ease and trust. They have created the defector online trading platform.

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SWOT MATRIX

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COMPETITIVE PROFILE MATRIX (CPM) OF eBAY

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COMPETITIVE PROFILE MATRIX (CPM) OF eBAY:

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EXTERNAL FACTOR EVALUATION MATRIX )EFE) OF Ebay :

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SPACE MATRIX

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SPACE MATRIX:

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BCG MATRIX

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5 FORCE ANALYSIS

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Bargaining powerBargaining power

of Suppliersof Suppliers

Bargaining powerBargaining power

of Suppliersof Suppliers

Threat of substituteThreat of substitute

Products or servicesProducts or services

Threat of substituteThreat of substitute

Products or servicesProducts or services

Rivalry amongRivalry among

Existing CompetitionExisting Competition

Rivalry amongRivalry among

Existing CompetitionExisting Competition

Barriers to entryBarriers to entry

BuyersBuyers

(GM, HP…)

(B2B, B2C, C2B,off-line…)

(Yahoo, Amazon …)

(GE..)

SERVICE

GLOBAL…

SYSTEM

To Be the World Leader in e-Market PlaceTo Be the World Leader in e-Market Place

BUSINESS

MODEL

RECOMMENDATION

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eBay : 22.0M users, 265M items

RECOMMENDATION

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Back GroundBack Ground Depending on the category of product Increasing of Community power Trust issues between buyers & sellersTrust issues between buyers & sellers

Depending on the category of product Increasing of Community power Trust issues between buyers & sellersTrust issues between buyers & sellers

StrategyStrategy

Things

To

Do

Things

To

Do

Broaden the eBay Trading PlatformFoster eBay Community AffinityEnhance Features and Functionality

Broaden the eBay Trading PlatformFoster eBay Community AffinityEnhance Features and Functionality

Target key product categories for special users Develop new community tools Enhance the community for women and old peoples Add new features and services to help trade with greater ease Expand Value-Adds Services ( community purchase) Increase the Trust and Safety Programs

Target key product categories for special users Develop new community tools Enhance the community for women and old peoples Add new features and services to help trade with greater ease Expand Value-Adds Services ( community purchase) Increase the Trust and Safety Programs

ServicesServicesServicesServices

RECOMMENDATION

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Back GroundBack Ground Growth rate Decreases To utilize the advantages of internet in globalization

Growth rate Decreases To utilize the advantages of internet in globalization

StrategyStrategy

Things

To

Do

Things

To

Do

Homogeneity global market Different strategies to enter new international markets

Homogeneity global market Different strategies to enter new international markets

Enforce Marketing in foreign countries Provide unified site and URL in each country Introduce country-specific services Choose from building solely, acquiring a company or

partnering with strong local companies

Enforce Marketing in foreign countries Provide unified site and URL in each country Introduce country-specific services Choose from building solely, acquiring a company or

partnering with strong local companies

GlobalizationGlobalizationGlobalizationGlobalization

RECOMMENDATION

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Back GroundBack Ground Limit of P2P market size Great potential market of B2C and B2B A new, rapidly evolving and intensely competitive area

Limit of P2P market size Great potential market of B2C and B2B A new, rapidly evolving and intensely competitive area

StrategyStrategy

Things

To

Do

Things

To

Do

Expand Business Model from P2P to B2C and B2B Good relationship with partner

Expand Business Model from P2P to B2C and B2B Good relationship with partner

Have a partnership with bank, c-card,e-money, mobile

communication company, Google etc Expand gradually Business model from P2P to B2C Develop the eBay's private brand product.

Have a partnership with bank, c-card,e-money, mobile

communication company, Google etc Expand gradually Business model from P2P to B2C Develop the eBay's private brand product.

Business Model & Strategic allianceBusiness Model & Strategic allianceBusiness Model & Strategic allianceBusiness Model & Strategic alliance

RECOMMENDATION

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Back GroundBack Ground 15 System downs between Aug 2008 and Nov 2009 The threat of Hacking ( Deny of services ) The cost of system failure is so big

15 System downs between Aug 2008 and Nov 2009 The threat of Hacking ( Deny of services ) The cost of system failure is so big

StrategyStrategy

Things

To

Do

Things

To

Do

Adapt to changing technologies and industry standard Achieve to stability, availability and efficiency

Adapt to changing technologies and industry standard Achieve to stability, availability and efficiency

Build backup system for important system such as CPU

Disk,D/B, Network System, Power, Communication Line Downsize the computer system from Mainframe-level Sun

to Linux ( ex: Google has 4,000 Linux server) Acquire specialist for System, DB, Network,Program and etc Invest more money on System Infrastructure

Build backup system for important system such as CPU

Disk,D/B, Network System, Power, Communication Line Downsize the computer system from Mainframe-level Sun

to Linux ( ex: Google has 4,000 Linux server) Acquire specialist for System, DB, Network,Program and etc Invest more money on System Infrastructure

System InfrastructureSystem InfrastructureSystem InfrastructureSystem Infrastructure

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