inc.STRATEGIC MANAGEMENT

FINAL PROJECT

Hien Le, Thinh Nguyen, Xuannan Le, Xiang Rong, Neil Cooper

Firm Profile

Founded by Pierre Omidyar in 1995

Current CEO: John Donahoe

International online marketplace

Over 15000 employees in over 39 countries

Millions of items listed on eBay across thousands of

categories.

IPO in 1998

Traded as NASDAQ:EBAY

Market Capitalization: $68.18 Billion

Product and service

Key products and services:

Online services for the sale of goods and services

Online communication services

Online payment and transactional credit services

Online classifieds

Advertising

Global commerce platform and payment leader.

The world's largest online marketplaces

PayPal - flexible and innovative payment solutions

eBay Enterprise - exceptional, engaging shopping

experiences online and offline.

Competitors

Amazon

Market Cap: 147.18B

Alibaba

Market Cap: 267.89B

Overstock

Market Cap: 600.39M

Rakuten

Market Cap: 17.47B

Amazon Alibaba Overstock Rakuten

External Analysis

External AnalysisPorter’s 5 Forces Model

Supplier:

low power

Rivalry: high among the competitors

New Entrance: medium

Substitutes: very high

Buyer: high buyer power

Industry Trend:

- Mobile – more sales

- Free and faster shipping

- Business without borders

- Content marketing is

essential

- Growth of guided discovery

- Consumer driven demand

and personalization

- Brand

PEST

External AnalysisP

olit

ica

l •Marketplace Fairness Act

•Copyright policy

Ec

on

om

ic

•Exchange rate

•Global recession

•Slower growth in mature market

So

cia

l

•Privacy

•Different markets have different cultures and competitions.

Tec

hn

olo

gy

•Mobile Payment

•Cloud computing

Mission Statement

“eBay Inc. enable commerce by

delivering flexible and scalable solutions

that foster merchant growth”

Organizational Structure

CEO

Marketplace Payment CTO CFO SVP

Two core businesses

- eBay Global Marketplace, led by Devin Wenig

- Payment, led by Dan Schulman

CEO John Donahoe

- Oversees strategic and financial planning, marketing, operations, product

development, and business development for eBay North America and eBay

International businesses.

- Receives reports from various departments, including legal, marketplaces,

communication, Shopping.com, international and human resource.

Resources

Innovative business model

Large range of item

Technology platform (website, paygate, mobile)

Globalization scale

Marketing

Partnership

Customer service

Brand

eBay community

Office, facilities

VRIO Framework

Internal Analysis

Resources V R I OCompetitive

AdvantageInnovative

business modelyes no yes yes Temporary

Globalization yes no yes yes Temporary

Value Chain Model

Internal Analysis

Business level strategies

DifferentiationCost

LeadershipGrowth Strategy

Quality control by offering

peer review

“Auction”; and

Alliances with numerous

overseas companies

Cost saving way to start

a business on eBay,

offering all types of items

and broad providers

Acquisitions and joint

ventures with global

companies

Corporate Level Strategies

• UPS: improve delivery quality

• Microsoft: expand online presence

Strategic Alliances

• Registered members: > 150 countries

• Rely on local sites

International Strategy

Integration Strategy

Vertical Integration:

- Paypal

- Shopping.com

- Where, Inc

Horizontal Integration:

- Craigslist

- StubHub

- Bill Me Later

Diversification:

- Skype

- Meetup

Financial performance in

the last 5 years

Changing payment model

Paypal acquired Bill Me Later in 2008

Allow purchases without using a credit (6 months to pay their bill in full).

EBay’s receivable turnovers decreased over time while collection period went up.

It might be a troubling signal for its investors.

Financial Analysis

2009 2010 2011 2012 2013

REVENUE PER YEAR

eBay Amazon Alibaba

2009 2010 2011 2012 2013

GROSS PROFIT MARGIN

Opportunities & Challenges

Strengths Weaknesses

Opportunities Threats

Opportunities & Challenges

Strengths Weaknesses

Opportunities Threats

Economic Scale

Diversity in Products

Strength in Technology

Brand Reputation

Users Data Base

Opportunities & Challenges

Strengths Weaknesses

Opportunities Threats

Inability to measure illegal

activity on site

Technology malfunctions

Cost of shipping

High fee

No further growth strategy

Inability to penetrate some

foreign markets

Lack of in-depth

descriptions for products

Opportunities & Challenges

Strengths Weaknesses

Opportunities Threats

Mobile usage

International expansion

New markets

Market penetration

Increase services

portfolio through

acquisition

Opportunities & Challenges

Strengths Weaknesses

Opportunities Threats

Online security

Increasing competition

from Amazon & Alibaba

Exchange rates

Regional low cost retailers

Action PlanTackle weakness:

- Make it more difficult for scammers to take people’s money

- Keep malfunctions as low as possible

- Control the price of shipping

- Revise and adjust the fee system

Capital Opportunities:

- Enable the process payment system

- Further its international expansion efforts

- Consider the retail markets

Q&A