Registered & Active eBay

eBayBy:Dan McLindonKyle McDanielJeremy SmileyTom AndersonRay Moorman

1 Key Question for eBay How can eBay continue to grow as an online retailer?

2 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

3eBay Company OverviewFounded1995 by Pierre Omidyar as an online auction site to bring buyers and sellers together.VisionCreate a place where people could do business just like the old days when everyone got to know each other personally, and we all felt we were dealing on a one-to-one basis with individuals we could trust.Strategic Business Units1. Marketplaces online auction and direct retail sites2. Payments PayPal3. Communications - SkypeOrganization Size15,000 employees, revenues of $5.9 billion in 20084eBay Key AcquisitionsCompanyYearAnticipated ResultActual ResultPayPal2002Allow eBay users to make credit card payments.Success within eBay marketplace as well as adoption by other online retailers (57 million registered active accounts ins 2008).Rent.com1st quarter 2005Natural extension of online real estate mkt.N/AShopping.com2nd quarter 2005Bolster traditional online retailer presence.50 million visitors per month, worlds 3rd largest internet shopping site.Skype2006Create synergies with Marketplace SBU, enabling buyers and sellers to communicate better.2007 had to take a $900 million writedown on value, synergies not realized. CEO indicates potential sale.StubHub2007Synergies with existing ticket business.Successful expansion into adjacent mkt.Conclusion: eBays strategy of growth by acquisition in core and adjacent markets has been hit or miss. Major success was PayPal, which was more of a horizontal integration than an adjacent market.5 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

6 PEST Analysis for eBayCategoryIssueThreats/OpportunitiesRanking (1-5)PoliticalEconomic2008 Economic downturnThreat lower retail spending.Opportunity new sellers looking to supplement income, buyers looking for better deals.3

4SocialGrowth in popularity of social networking sitesOpportunity possiblity to align with sites for advertising and to gain new users.4

Development of mobile society, beginning of the Connected EraOpportunity enables buyers and sellers to constantly monitor status of ongoing auctions.5

TechnologicalSearch capabilitiesOpportunity - developments in search make it easier for users to find items they are looking for. 3Global expansion of InternetOpportunity 1.4 billion Internet users, will buy something online.57Industry Overview (Supply)Porters five forces:Rivalry among existing competitors

HighThreat of substitute products

HighBargaining powerof buyers

HighThreat of new entrants

HighBargaining power of suppliers

Medium8Porters Five ForcesFactorAnalysisImpactThreat of substitute productsConsumers can choose to go to brick and mortar stores or trade without the use of a website.Bargaining power of suppliersCan go to a number of competitors to sell their goods. Low switching costs to use .eBay must work with Sellers to keep them as active suppliers to buyers on the site.Bargaining power of buyers Online consumers can find what they are looking for on a number of sites, unless good is very rare.eBay needs to find a way to entice buyers to site and keep them coming back, like variety and free shipping.Competitive rivalry Amazon coming on strong with well established brand and customer service focus. Traditional retailers also moving online with varying degrees of success. Little to no switching costs.eBay will have to find a way to differentiate itself, either by variety, cost, or ease of website use. Will likely need all three.Threat of new entrants Many retailers moving online. Minimal costs to setup a website and configure a payment engine.eBay well positioned in market with large number of users. Key will be to keep existing and attract new.9 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

10Registered & Active eBay Users

Reg users continues to grow but Active users has flattened out11Core Business: Online Auctions

# of online Auctions declining during same time frame as users are increasing12eBays Business Model 3 Operating Segments

13Net Revenues By Segment

14Forrester Research: 2012 Prediction of Internet SalesB2B predicted to be 10x larger than retail sales

15Worldwide Internet Users in 2008

220m of NA was from US.16 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

17 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

18Internal Analysis Core ValuesConclusion: eBays recent changes to their fee structure and feedback forum go against the companys core values.19 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

20 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

21Management Timeline22Whitman vs. DonahoeMeg WhitmanJohn Donahoe23 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

24 SWOT Analysis for DellStrengths Well established brand.Large number of user accounts.PayPal acquisition to support ebay.com.Ability to collect huge amounts of data on buyers and sellers.Weaknesses New CEO John Donahoe.Company culture becoming stale, employees not fully engaged. Skype acquistion. Fee structure has alienated some sellers.Limitations on feedback hurt ability to create sense of trust and community.Moving away from online auction, into direct retail.No attempt to address issues and costs in shipping.

Opportunities Find a new revenue stream with online advertising with Skype. Growth in total online retail means more potential users of PayPal.Other competitors, Overstock.com and uBid.com are struggling, possible acquisition targets.Personalize eBay websites for various countries.Threats Sellers moving to other auction sites, taking the variety of items they supplied to the competition.Possible shift in online shoppers preferences from auction-based to traditional online retailing.Scammers and security issues may drive customers to the competition.25 Secondary QuestionsWhat is eBays history? What is happening in eBays external environment?How is eBay performing today and what does the future look like?Who are eBays competitors and how is their performance in comparison?Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture)Does the eBay brand create a sense of trust, security, and community?Should John Donahoe be the CEO of eBay?What does a SWOT analysis show regarding eBays position?How can eBay position itself for future success?

26Recommendations1. Fire John Donahoe, leverage strong board of directors to find a replacement that can lead eBay into the future.

2. Focus on restoring the eBay brand name. Make eBay.com a 100% auction site. Use Shopping.com and other possible acquisition targets to compete in traditional online retail space.

3. Revamp fee structure to be friendly to both small and large sellers. Tier the structure based on monthly or annual trade volumes.

27Recommendations4. Look into acquiring either or both Overstock.com and uBid.com

Introduce Merchant Rewards programAllow merchants to earn rewards points per transaction.Rewards can include shipping credits/codes, free boxes, packing supplies.

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