Case Study-eBay

Liteanu Alexandra-Mihaela B4/I

1.dinamica Ebay - business segments

eBay Inc., incorporated on September 24, 1998, is a global technology company that enables commerce through three business segments: Marketplaces, Payments, and Communications. Ebay by providing online platforms, tools and services to help individuals and small, medium and merchants around the globe engage in online and mobile commerce and payments, the Company can facilitate transactions. The company also generates revenue through marketing services, classifieds and advertising. Ebay has also created an open source platform that provides software developers and merchants access to its applications programming interfaces, or APIs, to develop software and solutions for commerce. Its developer community includes more than 800,000 members. As of December 31, 2012, its Marketplaces segment had more than 112 million active users and more than 350 million listings globally, while its Payments segment had more than 122 million active registered accounts. During the fiscal year ended December 31, 2012, the Company completed three acquisitions, two of which are included in its Marketplaces segment and one in its Payments segment. In May 2012, Ebay completed the sale of Rent.com. Marketplaces Marketplaces brings buyers and sellers together through online Websites and mobile applications, which are available globally at any time, including through localized eBay.com sites. Marketplaces segment includes its core e-commerce platform eBay.com, its vertical shopping experiences such as StubHub, Fashion, Motors and Half.com, its classifieds websites such as Marktplaats.nl and mobile.de, and advertising services. Marketplaces also include RedLaser to facilitate mobile commerce, Milo to enable search for goods at local retailers, and Hunch for merchandising based on customers' needs and tastes. Sellers can choose to list their products and services through fixed price listings on eBay.com, its Marketplaces platform, and it classifieds Websites or through an auction-based format on eBay.com. Its fixed price format allows buyers and sellers to close transactions at a pre-determined price set by the seller, but also allows sellers to signal that they would be willing to close the transaction at a lower price through the Offer feature. Its auction-style format allows a seller to select a minimum price for opening bids. In addition, its eBay Stores format enables sellers to exhibit all of their listings in a single place on one of its eBay Marketplaces platforms and to describe their respective businesses through customized pages. eBay Stores also provides sellers with tools to build, manage, promote and track their businesses. Its classified Websites are available in over 1,000 cities globally. Its classifieds Websites include Den Bla Avis, BilBasen, eBay Classifieds (including eBay Anuncios, eBay Kleinanzeigen and

eBay Annunci), Gumtree, Kijiji, LoQUo, and Alamaula. As of Dec 2008, eBay Inc.employed aprox.16.200 people. Payments The Companys Payments segment has three primary payments brands: PayPal, which enables individuals and businesses to securely, easily and quickly send and receive payments online and through a broad range of mobile devices in approximately 190 markets worldwide; Bill Me Later, which enables U.S. merchants to offer, and U.S. consumers to obtain, credit at the point of sale for ecommerce and mobile transactions through Bill Me Later's relationship with a chartered financial institution; and Zong, which enables users with a mobile phone to purchase digital goods and have the transactions charged to their phone bill. The Companys BillSAFE, a provider of payment services for online merchants in Germany that offer consumers the ability to pay for purchases upon receipt of an invoice after the item is received. The Company provides a credit offering through the Bill Me Later service, which allows qualifying the United States buyers to obtain a revolving line of credit at the point of sale from a third-party chartered financial institution, WebBank. When a consumer makes a purchase using a Bill Me Later credit product issued by a chartered financial institution, the chartered financial institution extends credit to the consumer, funds the extension of credit at the point of sale and remits funds to the merchant. PayPal has developed a number of trust and safety programs, including PayPal's Seller Protection and Purchase Protection Programs. These programs provide additional protection to certain account holders who pay or receive payment for their transactions through PayPal on or off eBay.com in certain key geographies. PayPal's Seller Protection Program covers sellers in certain key geographies who follow specific shipping and handling practices against claims that a transaction was not authorized by the buyer or that the item was not received. PayPal's Purchase Protection Program reimburses the buyer, subject to specified limitations, for qualified purchases using PayPal on or off eBay.com in certain key geographies if the buyer does not receive the item or, in limited markets, if the item is significantly not as described. In some non-U.S. markets, protection for buyers is limited to a maximum amount per transaction. Communications The Communications segment generates revenues from Skype VoIP for connection to traditional fixed and mobile telephones under Ebay subsidiary Skype Tehnologies S.A. 2.strategii urmate de ebay pana in prezent There is no doubt that eBay holds the power in the online auction industry. eBays corporate level strategy was to become a diversified business. They wanted to diversify not only the products they offered but also their customer base and global reach. By using the eBay service you can find virtually anything you are looking for. eBay competes in the online auction industry using a broad differentiation strategy. Although they may not be the most inexpensive online auction site, they have the largest variety of products offered. They also appeal to a larger group of consumers that include individual sellers, small entrepreneurs, and corporations all over the world.

eBay achieves broad differentiation through their strong eBay community, a global reach not matched by any competitor, and a category span of 27,000. These aspects of the eBay service among others set their company apart from the rest. Customers see the value in using the eBay service. This is why eBay has become so successful. eBays business model was based on creating and maintaining a person-to-person trading community. After implementing their model, eBay has been able to build strategic partnerships, continue to make innovative changes and improvements, and monitor its internal and external environments for possible future opportunities. This has given them the prestige of being the worlds largest online auction company. Main strategies of eBay: -Establishing a larger user base; -eBay concentrated on local and international trading; -Creating a strong brand; -Broadening the trading platform; -Maintaining a strong community affinity. 3.analiza sectorului/industriei/ramurii The online auctions industry has been growing enormous over the last year and companies have to be able to keep up. Rivalry / Competition The competition between thebig playersis relatively high.37The big international players such as eBay, Amazon and Yahoo have increased their worldwide market share. Buyers The power of buyers is medium to high. On one hand, the power in the C2C marketon eBay will still increase. On the other hand, especially theB2C and B2Bon eBay will become a more important force. Regarding the increasing penetration of women using the Internet will affect eBay in the way that women have different trading preferences and different trading behaviours on eBay. Despite the increase in online marketing spendings, eBays business model is relatively independent of incomes from advertisements. Potential Entrants Generally, the power of potential entrants is rather medium as high and depends on the proentrant. Potential entrants for eBay areInternet portals, engines,media companies and especially possible combinations of them.47Potential entrants could also be companies offering reverse auction systems.48We also see the increasing efforts of manufac- and OEMsselling products directly on the Internet. Large retail sellers and mail- businesses are also trying to generate more revenue by their Internet pages.

Tradi- auction companies are another thing, which are trying to expand their business on the Internet,but they currently have problems adapting their auctions on the Internet. On one hand, the original business model of eBay could be copied relatively easily. On the other hand, eBays largest barrier to entry is the large scale of buyers and seller. Substitutes The power of substitutes is rather low as medium. Reasons for choosing substitutes are fraud protection and that not all products are applicative to be traded on the Internet Similarly. One disadvantage of buying on eBay is that people can not touch and feel the listed products and therefore many people prefer to buy their products especially attradi- retail outlets. Another substitute for eBay is the mail order business where people can buy products via catalogue or telephone. For second-hand goods people can also choose the alternative to buy products at classified journals or at flee markets. Suppliers The power of suppliers is relatively low. eBay has fixed costs for servers and payments for software solutions. Suppliers, which sell standardized products and services to eBay, have little power because of low switching costs. Suppliers, selling customized products and ser- to eBay, have a stronger power. Another power of suppliers could be occur by patent rights.The power of national mail order firms,delivering the traded items, is relatively low. The power of vendors for payment systems is also low, especially since eBay took over PayPal. 4. propuneri directii strategice / strategii de perspectiva pentru ebay Strong Points -Ebay is the leading global brand for online auctions; -the company exploits the benefits of CRM; -Ebay has become a generic term for online auctions. Weakness -the model of Ebay is open to a number of fraudulent activities; -System breakdowns could affect the tranding activities of Ebay; Opportunities -Acqusitions provide new business strategy opportunities; -market development in new emerging markets; -market penetration on the current markets can change a large number of potential customers to subscribers. Threats -succes attracts competition;

-attacts by illegal practicies could happen; -some costs like credit card charges cannot be controlled by eBay. Before Ebay considers initiating a price change, the must consider customers needs.They are already having success in their current pricing model and should continue with their pricing strategy.Companies that own the largest market share will enjoy the highest profit.eBay should remain focused as a product quality leader rather than a price leader.Consumers today have a vast array of brand choices and consumers today are focused more on value than on price.eBay should remain focused on their differentiation strategy rather than cutting costs.They must remain focused on their strong brand image, continue to offer new improvements, and supply a superior service. eBay must continue to look for opportunities to expand their company in the future. The changing lifestyles of people can be an opportunity for eBay to penetrate the market even further and broaden their customer base. Also, eBay should look at other online auction sites for possible acquisitions or partnerships. eBay must continue to expand internationally to keep the number one spot in this market. In conclusion, eBay should maintain global growth, reinforce their marketing and also develop tehnology (selling new applications,rapid application development-software for newand existing market areas,e-talling, etc.)