eBay Inc.

’s Operations Management: 10
Decision Areas & Productivity
UPDATED ONUPDATED ON DECEMBER 1, 2017 BY MIRANDA SHERMAN

eBay’s building in
Kleinmachnow, Germany. eBay Inc.’s operations management in the 10 decision areas
involves strategies for streamlined and productive operations linked to technologies for
online trading services. (Photo: Public Domain)
eBay Inc.’s profitability in e-commerce operations is linked to effective operations
management (OM) in the 10 strategic decision areas of the global business. These 10
decisions aim at maximizing productivity and other performance criteria. For example,
eBay’s case involves streamlining to maximize the productivity of online trading
platforms. The company’s operations managers are also concerned with maintaining
high efficiency of all systems to ensure seamless and satisfactory customer experience.
High efficiency is a competitive strength in attracting customers (sellers and buyers who
use the company’s online trading platforms and services). The 10 strategic areas of
operations management are significant considerations in enhancing eBay Inc.,
especially in operational scaling that comes with business growth. Through effective
operations management, the company maintains competitive advantages
against Amazon, Etsy, and Walmart (Walmart Marketplace). eBay Inc.’s subsidiaries,
such as StubHub and Kijiji, also improve their effectiveness through corresponding
corporate changes to enhance operations and overall productivity.

eBay’s managerial concerns regarding productivity frequently involve technological

programs or solutions for addressing issues in the 10 strategic decision areas of
operations management. In this case, many of these issues arise from the information
technologies used in eBay Inc.’s business. Nonetheless, other issues may involve
business partners. For example, operational issues involving shipping companies may
affect customer experience in using eBay’s online marketplace. Thus, the company’s
operations managers must also consider external factors that influence the multinational
business.

eBay’s Operations Management Areas, 10 Decisions

1. Design of Goods and Services. The decision in this area of operations
management focuses on strategies for consistency in output, based on the design
specifications of eBay Inc.’s products. These products are services, such as the
company’s online ticket exchange services available at StubHub and its localized
websites. In fulfilling operational objectives for this area, the company ensures
compatibility and consistency among all technologies implemented into systems and
databases. eBay’s generic strategy for competitive advantage and intensive strategies
for growth require advanced technologies to achieve cost leadership with high
productivity. This condition affects the company’s operations management. For
example, operations managers must keep abreast with emerging information
technologies to maintain business competitiveness.

2. Quality Management. The strategic objective in this decision area of operations

management is to satisfy customers’ expectations regarding product quality. Achieving
this operational objective helps fulfill eBay’s corporate vision and mission statements,
which aim for leadership in the online trading services market. For example, high quality
processes contribute to high productivity and business effectiveness in satisfying
consumers and vendors on the company’s trading platforms. eBay Inc.’s operations
managers must use research data that accurately represents the global market for
online trading services.

3. Process and Capacity Design. This decision area of operations management aims
to design and implement necessary processes, and ensure that these processes are
effective and efficient. eBay’s operations managers must develop strategies that satisfy
such objectives. For example, strategies for new support services are applied for the
purpose of improving the capacity of the company’s classifieds website operations.
The corporate structure of eBay Inc. influences the fulfillment of such operational
objectives. For instance, each of the company’s business-type divisions has a specific
set of productivity requirements that influence operations management activity.

4. Location Strategy. eBay’s operations managers are concerned with strategically

locating its facilities to fulfill the objective in this decision area. The operations
management objective is to optimize distances among the parties involved in the e-
commerce business. For example, in deciding on office locations, the corporation must
consider proximity to the labor market. Proximity to target customers also influences
trade fair advertising and related communications strategies involved in eBay’s
marketing mix or 4Ps. Optimization of locations contributes to high productivity and
operational efficiency, which are among the determinants of global competitiveness.
5. Layout Design and Strategy. This strategic decision area of operations
management, in eBay Inc.’s case, involves the layout of offices and other workspaces.
The company does not maintain large warehouses like Amazon. The objective is to
streamline the movement of resources, including human resources, throughout
workspaces. For example, eBay’s operations managers maintain IT facility layouts that
support high productivity while scaling or expanding operations. Streamlined layouts are
a factor in the operational efficiency of the company’s international marketplace,
classifieds, and ticket exchange business.

6. Job Design and Human Resources. In this decision area, operations managers
focus on developing the company’s human resources, which determine operational
capacity. For example, eBay Inc.’s strategies continually improve talent to keep the e-
commerce business competitive. Job design that suits the business helps minimize
productivity barriers. Approaches used in this area of operations management
affect eBay’s corporate culture. Results orientation in the organizational culture,
combined with suitable operations management in this area, ensures effectiveness that
attracts consumers and merchants to the company’s global online trading services.

7. Supply Chain Management. Supply chain effectiveness is the objective in this

decision area of operations management. eBay’s supply chain involves firms that supply
equipment for the company’s information systems. For example, as part of this supply
chain, IT vendors affect the company’s operational effectiveness and strategies for
productivity. The Porter’s Five Forces analysis of eBay Inc. shows that suppliers have a
moderate impact on the e-commerce industry. The business must manage such impact
to minimize barriers in global growth. Operations management approaches for the
supply chain must also address the ecological issues and trends shown in
the PESTEL/PESTLE analysis of eBay Inc. These trends influence customers’
perception about the company and its products.

8. Inventory Management. In this area, eBay’s operations managers focus on

inventory control to support operational requirements. For example, this strategic
decision area involves external business conditions as well as resource support in
ensuring inventory adequacy. In this operating area, the first in, first out (FIFO) method
supports eBay Inc.’s productivity goals. The method facilitates effective upgrades to the
company’s information technologies. Also, redundant system components are part of
the operations management approaches to minimize disruptions in the corporation’s
multinational online retail/auction, classified listings, and ticket exchange services.

9. Scheduling. This area of operations management involves strategic decisions

regarding the schedules of employees and other resources. For example, scheduling
human resources for specific marketing events is among the concerns of eBay Inc.’s
operations management in this area. In addition, scheduling technological upgrades are
included in this operational area. The objective is to maintain high productivity despite
limited resources. This objective is achievable through schedules that minimize
capacity-based bottlenecks and optimize the operational capacity of eBay’s e-
 commerce business in processing data generated from transactions and other activities
among sellers and shoppers.

10. Maintenance. Operations managers focus on maintaining satisfactory processes,

resources, and outputs in this strategic decision area. For example, eBay Inc.’s
operations management approach must maintain adequate resources, including human
resources and equipment. To satisfy this operational objective, the company’s
strategies must include appropriate hiring policies and human resource development
initiatives. Also, eBay’s global business has regular IT upgrades to maintain the
performance of its information systems. Maintaining the quality of e-commerce services
is another objective in this area of operations. Such operations management objective is
linked to eBay’s service stability and reliability that support customers’ productivity in
their e-commerce endeavors.

Productivity at eBay Inc.

Productivity measures or criteria used at eBay Inc. are based on the technological
nature of the global business. These measures are helpful in supporting decisions in the
10 strategic areas of operations management. For example, in determining supply chain
issues, eBay’s operations managers can use measures that represent suppliers’
productivity, which directly influence the productivity level of the entire supply chain. The
company’s operational objectives for high productivity involve new solutions, as well as
looking for opportunities for further streamlining. The following productivity measures
are applicable in eBay Inc.’s operations:

1. Number of equipment units delivered per month (productivity of suppliers and the supply
chain)
2. Number of complaint tickets resolved per day (customer service productivity)
3. Volume of transactions processed and completed per hour (productivity of eBay’s online
marketplace)

eBay Inc.’s Corporate Social Responsibility

& Stakeholders (CSR Analysis)
UPDATED ONUPDATED ON DECEMBER 1, 2017 BY MIRANDA SHERMAN
 An eBay office in
Toronto. eBay Inc.’s corporate social responsibility strategy focuses on some
stakeholders and their interests. The company can improve its corporate citizenship by
equally emphasizing other stakeholders and interests, such as sustainability in e-
commerce. (Photo: Public Domain)
eBay Inc.’s position among the biggest e-commerce companies in the global market
empowers its business to significantly impact stakeholders through an effective
corporate social responsibility (CSR) strategy. In Archie B. Carroll’s theory of corporate
responsibility, businesses and stakeholders impact each other. As a result, it is
beneficial that companies consider and satisfy stakeholders’ interests. In eBay’s case,
such interests are associated with how buyers and sellers use online trading platforms
and related technologies. For example, the ubiquity of Internet access relates with the
global impact of the company’s CSR efforts. At present, eBay’s corporate citizenship
programs are focused on entrepreneurship. CSR initiatives for causes other than
entrepreneurship have lower priority in the company’s managerial decisions. This
corporate social responsibility focus is aligned with the nature of the business, which
facilitates online trading. However, concerns on business sustainability and green
technologies warrant prioritization, as well. A more holistic corporate citizenship strategy
can boost eBay Inc.’s brand image and position as an influencer in the e-commerce
industry.
 eBay’s corporate social responsibility strategy guides managers in initiating
corresponding behavioral changes among employees. For example, the company
encourages employee involvement in outreach programs for CSR purposes. While the
corporation focuses on entrepreneurship, other corporate responsibility concerns are
also considered in management decisions. For instance, stakeholders’ interests in
green and sustainable business also guide managerial efforts in developing e-
commerce services provided to merchants and shoppers. This business analysis of
eBay Inc. shows corporate citizenship efforts that aim at using e-commerce to support
progress among stakeholders.

eBay’s Stakeholder Groups & CSR Initiatives

eBay Inc. has an entrepreneurship-focused corporate social responsibility
strategy. For example, the strategy puts “opportunity for all” as a way to fulfill the
interests of sellers, especially those from low-income communities. In this CSR
approach, the company satisfies the interests of stakeholders most directly linked to its
international e-commerce business: sellers. Still, sustainability and green management
are also significant in the company’s corporate responsibility efforts. While various
programs and initiatives are included in such efforts, eBay’s corporate citizenship
strategy prioritizes the following stakeholders:

1. Sellers/Entrepreneurs (most significant/highest priority)

2. Environment
3. Consumers

Sellers/Entrepreneurs. This stakeholder group has the highest prioritization in eBay

Inc.’s corporate social responsibility programs. For example, the company’s main global
impact goal, “opportunity for all,” is to give opportunities for vendors from depressed or
low-income communities. In a way, this CSR prong touches on the interests of
communities as stakeholders. However, given the nature of the company’s emphasis on
using its online trading platforms, such corporate responsibility initiatives actually focus
on sellers on these platforms. In relation, the eBay Foundation emphasize financial
support for entrepreneurs. Corresponding strategic management decisions highlight the
importance of sales in growing the e-commerce business. These corporate citizenship
programs for entrepreneurs or sellers are aligned with eBay’s corporate mission and
vision statements, which aim for market leadership. Such leadership is also among the
goals in eBay’s generic competitive strategy and intensive growth strategies.

Environment. The natural environment is considered a main stakeholder in eBay Inc.’s

corporate responsibility strategy. Business sustainability, green initiatives, and related
management programs are included in this aspect of the strategy. One of the main
goals for such ecological interests is to achieve a “circular economy” where carbon
emissions are reduced by selling pre-owned items on the company’s online
marketplace, classifieds, and ticket exchange platforms. This goal shows that eBay’s
corporate social responsibility approach is significantly based on the online nature of the
 international business. Also, such component of the CSR strategy aligns with the
ecological trends identified in the PESTEL/PESTLE analysis of eBay Inc. For example,
the company’s corporate citizenship aim of using 100% renewable energy for electricity
needs by 2025 directly addresses the increasing availability of renewable energy.

Consumers. eBay Inc.’s corporate social responsibility activities partly satisfy the
interests of consumers as a major stakeholder group in the e-commerce business. CSR
initiatives for consumers are an extension of the “circular economy” goal mainly aimed
at satisfying green or sustainability interests. For example, the company’s CSR
programs include streamlining online services for consumers to sell their pre-owned
items. eBay’s organizational culture influences consumers’ experiences and, thus, how
they utilize the company’s websites for selling pre-owned items. Thus, cultural support
is significant in this component of the corporate responsibility strategy. In order to attain
such corporate citizenship goals, eBay’s operations management must suit consumers’
expectations regarding effective services available from the multinational business.

Summary & Recommendations – eBay’s CSR

Performance in Addressing Stakeholders’ Interests
Summary. eBay Inc.’s corporate social responsibility programs satisfy three of the main
stakeholder groups of the business. For example, the company satisfies current and
potential sellers on its online trading platforms. The efficiencies of these platforms
address ecological interests. Moreover, consumers are provided with a venue for selling
pre-owned items, improving their carbon footprint in the process. eBay’s CSR efforts are
appropriate to the nature of the e-commerce industry because they maximize
information technology usage for corporate citizenship. Such technologies facilitate
green living and business sustainability, adding to the strengths identified in the SWOT
analysis of eBay Inc., and addressing competition with Amazon, Walmart (Walmart
Marketplace) and other companies with considerable online presence.

Recommendations. This business analysis highlights the benefits of matching

business nature with corporate responsibility strategies. eBay’s case shows a CSR
strategy that boosts business performance while satisfying major stakeholders’
interests. However, the company’s corporate citizenship initiatives have limited
consideration for some stakeholders. Also, the strong force of competition shown in
the Porter’s Five Forces analysis of eBay Inc. could get stronger, as the online
environment has low to moderate barriers to entry. Reforming the CSR strategy can
help address these issues. The following are the recommendations for improving eBay
Inc.’s corporate citizenship status:

1. Distribute CSR efforts to equally consider all major stakeholder groups. Currently, the
CSR focus is on sellers through entrepreneurship support via the company’s online
trading platforms.
2. Increase efforts for sustainability. The company can strengthen its brand image through
comprehensive sustainability programs that encompass the operations of subsidiaries
like StubHub and Kijiji.
3. Improve community development support. The company’s current emphasis on
entrepreneurship has significant contributions to community development. However, this
benefit of the CSR strategy is indirect.

eBay Inc.’s Marketing Mix or 4Ps (Analysis)

UPDATED ONUPDATED ON DECEMBER 1, 2017 BY CHRISTOPHER MITCHELL

An eBay office in
Toronto. eBay Inc.’s marketing mix or 4P (product, place, promotion, price) involves
competitively priced online trading services accessible through digital technologies and
promoted to online sellers and shoppers. (Photo: Public Domain)
eBay Inc.’s marketing mix or 4P is an example of how this type of e-commerce business
can maximize its online service revenues. A firm’s marketing mix (or 4Ps) defines the
strategies and tactics used for executing a marketing plan, involving decisions regarding
product, place, promotion, and price (4P) variables. In eBay’s case, the focus of the
marketing mix or 4Ps is on services for buyers and sellers. For example, the company’s
products include its marketplace services for online consumers and vendors. In
managing the effects of customers’ expectations, the business aligns its 4P to global
 market dynamics. The company’s pricing strategies are designed to ensure
competitiveness against Amazon, Walmart (Walmart Marketplace), and smaller
competitors. As one of the main players in the e-commerce industry, eBay Inc. has
competitive advantages for attracting and retaining online shoppers and merchants.
However, the company’s marketing mix must adjust according to trends in the industry
environment.

eBay’s marketing mix reflects the company’s perspective about the e-commerce
market. For example, the corporation’s 4Ps consider the purchasing behaviors of
consumers and sellers in using different information technologies, such as mobile
technology. The company uses these behaviors in designing its products. In relation,
the evolution of subsidiaries like StubHub and Kijiji is based on the company’s 4P.
These interconnections stress the importance of the marketing mix in shaping strategies
and management approaches in the multinational business, and in supporting eBay’s
corporate vision and mission statements.

eBay Inc.’s Products (Product Mix)

This aspect of the marketing mix identifies eBay’s products. Products are the
organizational outputs offered or sold to the target market. For example, in this case,
the products are online services, such as online retail/auction services. The
corporation’s target customers are buyers and sellers. This part of the 4P requires that
the company accurately determine market demand and opportunities. These
characteristics of the international business environment shape strategic management.
At present, the following are the components of the product mix in eBay Inc.’s marketing
mix:

1. Marketplace services
2. Ticket exchange services
3. Classifieds services

Marketplace services are the core of the global business. These services are available
at the main website ebay.com, as well as localized websites for various markets. For
example, ebay.com.au offers marketplace services for the Australian market.
Marketplace services allow consumers and vendors to make and complete deals. This
part of the 4Ps also includes ticket exchange services through StubHub.com and
corresponding localized websites. These online services allow users to buy and sell
tickets to various events. Moreover, the company has classified listings websites, such
as Kijiji. This product mix shows that eBay’s marketing mix is composed of online
trading platform services.

Place/Distribution in eBay’s 4P
 In this aspect of the marketing mix, the analysis focuses on the channels or places
where eBay Inc. distributes its products in the market and transacts with target
customers. These places or venues may include physical and virtual locations. For
example, online platforms are among the channels considered in this part of the 4Ps.
The company manages distribution through a multi-pronged strategy that includes
various technologies that enable consumers and merchants to easily access services
from the multinational business. In this case, the places relevant in this aspect of eBay’s
marketing mix are as follows:

1. Official websites
2. Mobile apps
3. Application programming interface (API)

Official websites and mobile apps are the main places for customers to access eBay
Inc.’s e-commerce services. For example, merchants and shoppers can use the
company’s marketplace websites and apps for iOS and Android. In this part of the 4P,
the company also distributes its products through its application programming interface
(API). The API allows third parties, such as other websites and apps, to access the
company’s services and its database of items for sale. Thus, these places optimize
efforts to reach target markets and support eBay’s generic strategy for competitive
advantage and intensive strategies for growth. This marketing mix shows that the
company’s strategic management aims to provide multiple options for accessing the
services of the business.

Promotion in eBay Inc.’s Marketing Mix (Promotional

Mix)
This aspect of the marketing mix focuses on how eBay Inc. promotes its products in
target markets. The company’s corresponding strategies and tactics define
communications between the business and the target consumers and vendors. For
example, public relations activities are promotional in satisfying the objectives in this
part of the 4P. Effective promotion is key to managing customers’ expectations and
increasing the company’s market share in the global e-commerce industry. The
following components of the promotional mix are applied in eBay’s marketing mix:

1. Sales promotion
2. Advertising
3. Public relations

Sales promotions are among the most significant strategies in eBay Inc.’s promotional
mix. Designed to increase sales in the short term, these sales promotions include
discount coupons for shoppers and special offers for sellers. The 4Ps also include
advertising, which is infrequently used in attracting more users to the company’s online
trading platforms. Furthermore, public relations help promote the company’s business
and brands. For example, the eBay Foundation maintains corporate social responsibility
 programs that increase the company’s visibility in various markets around the world.
Overall, this aspect of the marketing mix emphasizes managerial focus on short-term
promotional activity.

Prices and Pricing Strategies in eBay’s 4Ps

In this aspect of the marketing mix, eBay Inc. determines the price ranges and price
points for its services. Among the 4Ps, this element is directly linked to the company’s
profit margins and international market share. For example, lower prices can attract
more sellers and, consequently, more shoppers to the company’s online trading
websites. The suitability of pricing strategies affects management goals and business
performance. Managers implement the following pricing strategies as part of the
marketing mix of eBay Inc.:

1. Market-oriented pricing strategy

2. Dynamic pricing strategy

The market-oriented pricing strategy involves prices that are set based on current or
prevailing market prices. For example, eBay’s current seller fees are comparable to
competitors’ fees in offering e-commerce services. The company’s 4P also involves
dynamic pricing, which allows flexibility in setting prices. For instance, fees include fixed
fees per item sold, as well as fees as a percentage of the final sale amount. Vendors
can choose among selling formats and corresponding fees. Through the dynamic
pricing strategy, the company manages customers’ expectations on sales format
flexibility. This aspect of eBay Inc.’s marketing mix helps optimize profits as the global
business grows its sales revenues.

eBay Inc. PESTEL/PESTLE Analysis &

Recommendations
UPDATED ONUPDATED ON DECEMBER 1, 2017 BY CHRISTOPHER MITCHELL
 eBay’s building in
Kleinmachnow, Germany. A PESTEL/PESTLE analysis of eBay Inc. shows
opportunities for growth in the industry environment, especially through innovation,
expansion, and sustainability. Strategically addressing and managing the external
factors in its remote or macro-environment, as determined in this PESTEL/PESTLE
analysis, can improve the company’s e-commerce business. (Photo: Public Domain)
eBay Inc. is a major player in the global e-commerce market, specializing in online
retail/auction marketplace, classified listings, and ticket exchange services. The
company’s success is a result of strategies that solve issues associated with external
factors in the industry environment, such as the opportunities and threats shown in this
PESTEL/PESTLE analysis of eBay Inc. In managerial decision-making processes, the
PESTEL/PESTLE Analysis model is an external analysis tool for determining relevant
factors in the company’s remote or macro-environment. eBay’s case focuses on the
external factors linked to the Internet and related technologies. For example, mobile
devices are considered in terms of their influence on how buyers and sellers use the
company’s trading websites. Such trends in the remote or macro-environment occur
with the corporation’s competitive challenges involving firms like Amazon, Etsy,
and Walmart (Walmart Marketplace). With strategies shaped through external analyses
like this PESTEL/PESTLE analysis of the business, eBay Inc. can solve problems
related to macro-environmental factors.

This PESTEL/PESTLE analysis of eBay Inc. outlines external factors influential to

strategic management in online business. For example, the company’s development is
based on market opportunities connected to remote or macro-environmental factors,
such as governmental or political action that supports online trade. eBay’s generic
competitive strategy and intensive growth strategies are designed to support
multinational business growth despite the threats shown in this external analysis. In
addition, the external factors identified in this PESTEL/PESTLE analysis reflect
 challenges other firms experience in the e-commerce industry environment. The
company’s strategic approaches to macro-environmental factors determine its success
in outperforming such competitors.

Political Factors Relevant to eBay’s Business

In this aspect of the PESTEL/PESTLE analysis model, political influence on the external
business environment is considered. In this case, eBay Inc.’s remote or macro-
environment is subject to the effects of governments pertinent to the business. For
example, the company’s online marketplace is subject to governmental influences in the
United States. The company’s strategic management must exploit political opportunities
identified in the external analysis of its international business. The following external
factors represent the political influences on eBay Inc. and its industry environment, as
examined in this PESTEL/PESTLE analysis:

1. Governmental support for e-commerce (opportunity and threat)

2. Governmental support for IT infrastructure development (opportunity and threat)
3. Stricter anti-trust policies (threat)

Governmental support for e-commerce is considered in this PESTEL/PESTLE analysis

as an opportunity to grow eBay’s business. For example, the company can expand its
online marketplace in other countries whose governments are increasingly supporting e-
commerce. However, this remote or macro-environmental factor paves the way for new
entrants in the global market. New entry is a moderate competitive force determined in
the Porter’s Five Forces analysis of eBay Inc. Similarly, governmental support for IT
infrastructure creates a bigger user base (consumers and vendors), but also promotes
competition. This part of the external analysis depicts an industry environment that is
also subject to anti-trust policies. Such policies are external factors that impose
restrictions on the company’s strategies for acquisitions and mergers. These strategies
affect the company’s core operations and the operations of subsidiaries like StubHub
and Kijiji. Considering the remote or macro-environment, the company’s managers must
work on growing the business within government-imposed restrictions. The political
external factors in this aspect of the PESTEL/PESTLE analysis of eBay Inc. put value
on compliance for strategic growth in the international market.

Economic Factors Important to eBay Inc.

This aspect of the PESTEL/PESTLE analysis model presents economic trends
significant in the company’s remote or macro-environment. eBay Inc.’s e-commerce
industry environment depends on economic growth or decline that relates to
consumption levels. This part of the external analysis stresses the economy’s
significance as a determinant of strategic management success in growing the online
marketplace, classifieds, and ticket exchange business. The following economic
external factors are viewed in this PESTEL/PESTLE analysis as influencers in eBay’s
industry environment:
1. Rapid growth of developing countries (opportunity)
2. Rising disposable incomes (opportunity)
3. Economic stability in developed countries (opportunity)

Developing countries’ rapid growth is an economic external factor that supports revenue
growth based on increasing trade volume. For example, eBay Inc. can strategically
expand its online retail/auction services in these developing markets to generate more
revenues from rising trade. In relation, this PESTEL/PESTLE analysis of eBay Inc.
identifies rising disposable incomes as an opportunity. The company can expect higher
revenues as consumers in developing countries gain higher capacity for online
purchases. Moreover, economic stability in developed countries is assessed in this
external analysis as an opportunity to improve the multinational business. This external
factor helps minimize economic barriers to business enhancement in the remote or
macro-environment. Thus, the macro-environmental factors outlined in this
PESTEL/PESTLE analysis create an industry environment that favors eBay’s business
growth through appropriate management.

Social/Sociocultural Factors Affecting eBay’s

Business Environment
In this aspect of the PESTEL/PESTLE analysis model, sociocultural trends are
assessed in their effect on the company’s remote or macro-environment. These trends
are external factors that influence the behaviors of people, including the employees and
customers of businesses. eBay’s case involves social trends that affect how consumers
and vendors use online retail/auction and related websites. Based on this part of the
external analysis, the corporation’s management and strategies must suit such trends in
the industry environment. This PESTEL/PESTLE analysis considers the following
sociocultural external factors as determinants of eBay Inc.’s multinational e-commerce
performance:

1. Rising online activity (opportunity)

2. Changing preference for convenience (opportunity)
3. Rising demand for high quality service (threat & opportunity)

Rising online activity reflects widespread Internet access and the increasing number of
online users worldwide. This social external factor creates an opportunity to grow eBay
Inc. by attracting more consumers and merchants to its marketplace website and
related services. In relation, this external analysis highlights people’s preference for
convenience based on online service effectiveness and efficiency. For example, buyers
are now highly likely to consider online alternatives to brick-and-mortar services. Among
the strategic factors identified in this PESTEL/PESTLE analysis, rising demand for high
quality of service is a considerable threat to eBay. This issue arises from cases of fraud
among buyers and sellers. To manage this threat, the company must improve its online
security and safety. Nonetheless, the same external factor creates an opportunity to
improve the company’s services to gain more customers. eBay’s corporate culture must
 account for these macro-environmental factors to ensure business resilience in the e-
commerce industry environment. This PESTEL/PESTLE analysis of eBay Inc. presents
growth opportunities through expansion that exploits sociocultural external factors in the
remote or macro-environment.

Technological Factors in eBay’s Industry Environment

This aspect of the PESTEL/PESTLE analysis model enumerates the remote or macro-
environmental factors that reflect technological trends. These external factors impact
eBay’s strategic management through technologies for customers and for the
international business. For example, this external analysis considers information
technologies that power the company’s online trading platform and enable consumers
and merchants to access such platform. Thus, in this PESTEL/PESTLE analysis of
eBay Inc., the technological external factors in the e-commerce industry environment
are as follows:

1. Rising mobile device usage (threat and opportunity)

2. Rising competition through technological innovation (threat)
3. Developments in money transfer technology (threat and opportunity)

Rising mobile device usage threatens eBay by opening the global market to more
players. This technological external factor adds challenges in other fronts for
competition, such as through mobile shopping. Nonetheless, this PESTEL/PESTLE
analysis of eBay Inc. considers the same external factor as an opportunity to exploit the
mobile environment to reach more buyers and sellers. For example, the company can
improve its mobile apps’ functionality to retain more consumers and vendors in its online
marketplace platform. Another macro-environmental factor relevant in this external
analysis is the rising competition linked to technological innovation. For instance, the
company now competes against Facebook Inc.’s Marketplace, which is a result of such
innovation. The SWOT analysis of eBay Inc. shows strategic advantages for protecting
the business against such forces in the industry environment. However, the company
must continually innovate to address competitive changes in its remote or macro-
environment, such as by integrating streamlined money transfer technology. Thus,
eBay’s technological innovation is necessary in managing the external factors in this
PESTEL/PESTLE analysis.

Ecological/Environmental Factors
In this aspect of the PESTEL/PESTLE analysis, natural environmental concerns are
macro-environmental factors that affect business performance. In eBay Inc.’s case,
such external factors define the materials and environmental conditions that shape the
global e-commerce industry environment. This external analysis requires that the
company’s strategic management mitigate environmental challenges. Within this
context of the PESTEL/PESTLE analysis, the following ecological external factors are
significant to eBay:
1. Rising interest in environmental conservation (opportunity)
2. Business sustainability trend (opportunity)
3. Increasing availability of renewable energy (opportunity)

The external factor of rising interest in environmental conservation is an opportunity to

improve eBay’s environmental impact. This PESTEL/PESTLE analysis also stresses
benefits from the business sustainability trend that makes consumers and merchants
prefer sustainable or green online marketplace services. For example, improving eBay’s
corporate social responsibility (CSR) strategy strengthens brand image and satisfies
such trend in the remote or macro-environment. The increasing availability of renewable
energy is an ecological external factor that facilitates such improvement in CSR
strategy. The company can utilize more renewable energy for its online servers. In the
context of this external analysis, the business stands to benefit from progressive
sustainability measures. With such macro-environmental factors in this
PESTEL/PESTLE analysis of eBay Inc., strategic management efforts must aim for
leadership in business sustainability and other corporate responsibility variables
applicable in the e-commerce industry environment.

Legal Factors
This aspect of the PESTEL/PESTLE analysis model refers to legal systems pertinent to
the remote or macro-environment of businesses. For example, eBay Inc.’s multinational
e-commerce business must comply with regulations applicable to the industry
environment. Such external factors are linked to government policies in areas where the
company operates. This external analysis indicates that transactions among buyers and
sellers must comply with existing rules. eBay’s strategic management must account for
the following legal external factors relevant in this PESTEL/PESTLE analysis:

1. Rising e-commerce regulation (threat and opportunity)

2. Improving regulatory support for the globalization of markets (opportunity)
3. Improving regulatory support for international transportation (opportunity)

This PESTEL/PESTLE analysis of eBay Inc. considers rising e-commerce regulation as

a threat and an opportunity. This legal external factor threatens the company’s
international business through increasing controls and requirements to do business. For
example, as developing countries impose tighter regulations on online retail website
operations, firms like eBay experience stronger barriers to penetrating such markets.
However, the same macro-environmental factor is an opportunity to globally grow the
company. This part of the PESTEL/PESTLE analysis suggests that eBay’s business
scale should enable it to manage controls and requirements to enter overseas e-
commerce markets, in contrast to smaller firms with fewer strategic advantages for
overcoming such challenges. On the other hand, improving regulatory support for
market globalization is identified in this external analysis as an opportunity. eBay Inc.
can exploit this trend to strategically expand into more markets worldwide. Furthermore,
improving regulatory support for international transportation makes the remote or
 macro-environment supportive of business expansion. This external factor makes it
easier for consumers and sellers to complete transactions through the company’s online
trading platform. Therefore, in this aspect of the PESTEL/PESTLE analysis, eBay has
opportunities for growth and expansion alongside legal reforms in the industry
environment.

Summary & Recommendations – PESTEL/PESTLE

Analysis of eBay Inc.
Summary. This PESTEL/PESTLE analysis case of eBay considers the changing global
e-commerce landscape. With international business operations, the company faces
opportunities that support growth and expansion in its industry environment. To
effectively attract and retain consumers and vendors, eBay’s marketing mix or 4P must
account for product design trends, based on the external factors shown in this
PESTEL/PESTLE analysis. The results of this external analysis also identify trends that
threaten the business. For example, competition, especially through technological
innovation, poses as a threat to eBay Inc.’s business. Still, the company can improve its
performance by managing such threats and addressing the strategic opportunities in its
remote or macro-environment.

Recommendations. The recommendations for eBay aim at exploiting opportunities and

minimizing the impact of threats identified in this PESTEL/PESTLE analysis. Rapid
developments in the remote or macro-environment bring additional external factors that
require strategic change in the company. Considering the results of this external
analysis, it is recommended that eBay Inc.:

1. Expand its business operations overseas based on economic opportunities and

governmental support for e-commerce.
2. Increase its technological innovation to grow its customer base while minimizing the
effects of technological threats in the industry environment.
3. Expand its corporate social responsibility strategy to improve brand image and manage
customers’ expectations.

eBay Inc. Five Forces Analysis (Porter’s

Model) & Recommendations
UPDATED ONUPDATED ON DECEMBER 1, 2017 BY CHRISTOPHER MITCHELL
 An eBay office in
Toronto in 2014. A Porter’s Five Forces analysis of eBay Inc. points to competition and
customers as the highest-intensity forces in the e-commerce industry environment. The
company’s strategies must account for the external factors identified in this Five Forces
analysis. (Photo: Public Domain)
eBay Inc. is among the major players in the global e-commerce industry. The
company’s success represents strategic effectiveness in solving challenges in the
online business environment. Some of the major challenges are identified in this Five
Forces Analysis of eBay’s online trading platform business. Michael E. Porter’s Five
Forces analysis model is an external analysis tool that identifies competitive forces and
their intensities linked to business performance in the industry environment. In this case,
the Five Forces analysis of eBay Inc. encompasses the effects of competitive rivalry,
the bargaining power of customers/buyers, the bargaining power of suppliers, the threat
of substitutes/substitution, and the threat of new entry on the online marketplace,
classifieds, and ticket exchange industry environment. For example, the low cost of new
entry is an external factor that threatens the company’s market share of consumers and
sellers. eBay’s management must implement strategies that consider the external
factors identified in this Five Forces analysis of the online business.

A Porter’s Five Forces analysis of eBay Inc. informs managers and investors about
pertinent external factors in the e-commerce industry environment. These external
 factors present issues that the company must strategically address. For example, high-
intensity competition may warrant changes in eBay’s marketing mix or 4Ps to attract
and retain consumers and vendors to the company’s trading websites. It is prudent that
the company’s managers utilize the results of this external analysis to guide strategy
formulation in the multinational business.

Summary & Recommendations: Five Forces Analysis

of eBay Inc.
Summary. The results of this Porter’s Five Forces analysis of eBay reveal that
competition or competitive rivalry, and the bargaining power of customers or buyers are
the most significant external forces in the e-commerce industry environment. However,
each of the other forces has a moderate impact on the global business. Thus, all of the
five forces are major considerations in eBay’s strategic management decisions. The
company has the capabilities to withstand these forces through competitive advantages
(Read: SWOT Analysis of eBay Inc.). However, strong competition could erode the
company’s market share. It is essential that eBay’s generic strategy for competitive
advantage and intensive strategies for growth address the external factors responsible
for these forces. In summary, this Five Forces analysis establishes the following
intensities of the forces that influence eBay’s external business environment:

1. Competitive rivalry or competition – Strong force

2. Bargaining power of buyers or customers – Strong force
3. Bargaining power of suppliers – Moderate force
4. Threat of substitutes or substitution – Moderate force
5. Threat of new entrants or new entry – Moderate force

Recommendations. Based on the results of this analysis of eBay Inc. through Porter’s
Five Forces analysis model, a recommendation is to build competitive advantages
through innovation. Innovation enables companies to compete in the e-commerce
industry. Effective innovation for product improvement or development can increase
market share and help fulfill eBay’s corporate mission and vision statements. For
example, a higher innovation rate can increase the company’s online marketplace
effectiveness. Another recommendation is to develop more strategic partnerships with
third parties, such as courier companies. This recommendation addresses the strong
bargaining power of customers by improving service reliability. Also, such strategic
partnerships partly deal with the moderate bargaining power of suppliers identified in
this external analysis. Furthermore, this Five Forces analysis of eBay Inc. requires that
the company’s strategies address the threats of substitution and new entry. Continuing
development of services is recommended to overcome these threats. For instance, a
broader set of services can increase the attractiveness of eBay’s online marketplace,
classifieds websites, and ticket exchange services.
 Competition/Competitive Rivalry against eBay (Strong
Force)
This aspect of Porter’s Five Forces analysis model assesses the degree of competition
among firms in the industry. In this case of eBay Inc., the external analysis considers
competitive rivalry with firms involved in e-commerce. These firms can hinder the
company’s growth. The following external factors are the main contributors to the strong
intensity of competition against eBay:

 Large population of firms (strong force)

 Low switching costs (strong force)
 Low differentiation in quality (strong force)

This Five Forces analysis considers the large population of firms in the industry. This
factor leads to tough competition among firms like eBay Inc. For example, the company
needs to compete against major e-commerce firms like Amazon, Etsy,
and Walmart (Walmart Marketplace), as well as many smaller firms that have online
retail/auction operations. This external analysis also identifies low switching costs as an
external factor that contributes to the strong intensity of competitive rivalry in eBay’s
industry environment. Low switching costs are the low costs or barriers that customers
(consumers and sellers) experience when they switch from one service provider to
another, such as when they move from eBay to Amazon. This Porter’s Five Forces
analysis considers such external factor as an intensifier of the force of competition in the
online trading industry environment. In addition, low differentiation in quality reflects
similarities among the quality levels of available online trading services. For instance,
the quality of eBay’s classifieds services is similar to the quality of competitors’ services.
This condition makes it easy for customers to transfer from one firm to another, thereby
strengthening the force of competitive rivalry. Thus, this aspect of the Five Forces
analysis of eBay Inc. stresses the importance of competition in shaping management
and strategies for growing multinational e-commerce business operations.

Bargaining Power of eBay Inc.’s Customers/Buyers

(Strong Force)
In this aspect of Porter’s Five Forces analysis model, the influence of customers on the
e-commerce industry environment is examined. In eBay’s case, the customers are
consumers and sellers who use the company’s online trading websites and related
services. Customers’ rate of use of such services affects the strategic management
success of the company and its subsidiaries like Kijiji and StubHub. eBay Inc.’s
customers have strong bargaining power, which is based on the following external
factors and their intensities in impacting the international business:

 Low switching costs (strong force)

 High price sensitivity (strong force)
 High quality of information (strong force)

The aforementioned low switching costs in this Porter’s Five Forces analysis are also a
representation of customers’ bargaining power. For example, because of this external
factor, consumers and vendors can easily use Amazon instead of eBay. This condition
intensifies the bargaining power of buyers or customers. In relation, this external
analysis considers high price sensitivity, which is the degree of customers’ response to
changes in prices. For instance, if eBay increases the prices of its online marketplace
services, customers are likely to consider using the services of Amazon or other
prominent online trading platforms instead. This external factor contributes to the strong
intensity of the bargaining power of customers in the industry environment. Also, access
to high quality of information regarding online retail/auction and related services is
identified in this Five Forces analysis as a contributor to customers’ strong bargaining
power. This external factor is partly based on the availability of information through the
Internet, as well as other technological trends enumerated in the PESTEL/PESTLE
analysis of eBay Inc. Such information empowers customers in shifting from the
company to competitors. The combined effect of the external factors in this aspect of
the Five Forces analysis creates the strong bargaining power of customers. eBay Inc.’s
corporate social responsibility (CSR) strategy helps counteract this force by attracting
customers through suitable management approaches for enhancing the image of the
global business.

Bargaining Power of eBay’s Suppliers (Moderate

Force)
This aspect of the Porter’s Five Forces analysis model considers suppliers’ impact on
the industry environment. eBay Inc.’s strategic management, in this external analysis
case, must account for how suppliers influence the multinational business through its
supply chain. As an online trading service provider, the company’s supply chain
involves information technologies used to maintain trading services. For example, online
servers are among the technologies that eBay procures from its suppliers.
Merchants/sellers who use the company’s websites provide goods, but they are
customers and not suppliers because the company does not utilize such goods in
providing online retail/auction, classifieds, and ticket exchange services. In this Five
Forces analysis, the moderate intensity of the bargaining power of eBay’s suppliers is
based on the following external factors:

 Suppliers’ moderate population (moderate force)

 Suppliers’ low forward integration (weak force)
 Small population of delivery service providers (moderate force)

Suppliers’ moderate population corresponds to the moderate intensity of their

bargaining power in eBay’s industry environment. This external factor limits the
company’s choices in shifting from one supplier to another. Also, in the context of this
Porter’s Five Forces analysis, suppliers have a low level of forward integration, which
 reflects their weak control on the distribution of their products in the e-commerce
industry. This external factor reduces the intensity of the bargaining power of suppliers
on firms like eBay. Moreover, this external analysis points to the moderate force that
delivery service providers (courier companies) exert on the industry. For example,
service providers can impose additional fees for package delivery involving eBay’s
system. Delivery services complete the company’s offerings to the customers of its
multinational marketplace business. Based on this aspect of the Five Forces analysis of
eBay Inc., the bargaining power of suppliers is a considerable but limited issue in the
company’s strategic management efforts.

Threat of Substitutes/Substitution (Moderate Force)

In this aspect of Porter’s Five Forces analysis model, the influence of substitutes on the
e-commerce industry environment is assessed. Substitution can reduce eBay’s
revenues by attracting vendors and consumers into using substitute services. For
example, brick-and-mortar stores’ retail services are substitutes to eBay’s online
marketplace services. With regard to this Five Forces analysis, eBay Inc.’s strategic
management variables must include the following external factors that contribute to the
moderate intensity of the threat of substitution:

 Large population of brick-and-mortar marketplaces/stores (strong force)

 Moderate cost of substitution (moderate force)
 Moderate performance-to-price ratio of substitutes (moderate force)

The large population of brick-and-mortar marketplaces is considered in this Five Forces

analysis as a strong contributor to the intensity of the threat of substitution in eBay’s
industry environment. This external factor represents strong competition among brick-
and-mortar marketplaces that influences online marketplace businesses. Also, this Five
Forces analysis considers the moderate cost of substitution that exerts a moderate
force on eBay’s international business. For example, customers are moderately likely to
use substitutes because of such external factor. In addition, this external analysis
considers the moderate performance-to-price ratio of substitutes. Because of this factor,
consumers and sellers/vendors are moderately likely to use substitutes. The
performance of online marketplaces like eBay’s tends to be higher in terms of efficiency.
The company’s information technologies ensure the efficiency of its e-commerce
services for online retail/auctions, classifieds, and ticket exchange transactions. The
external factors in this aspect of the Five Forces analysis make the threat of substitution
a moderate issue affecting eBay’s strategic management. The company needs to
compete against trading websites, as well as brick-and-mortar stores.

Threat of New Entrants/New Entry (Moderate Force)

This aspect of Porter’s Five Forces analysis model examines the impact of new entry on
the e-commerce industry environment. This external analysis case covers the effects of
new online business operations that compete against eBay Inc.’s global marketplace,
 classifieds and ticket exchange business. New entrants can reduce the company’s
market share and revenues. In this Five Forces analysis, the following external factors
are relevant to the moderate intensity of the threat of new entry against eBay:

 Low cost of entry (strong force)

 Low switching costs (strong force)
 Moderate cost of brand development (moderate force)
 High economies of scale (weak force)
 High economies of scope (weak force)

The low cost of entry exerts a strong force against eBay Inc. and its industry
environment. This external factor represents the low capitalization needed to establish
online operations, such as a retail/auction website. As a result, large and small
companies can readily establish websites that compete against eBay’s multinational
business. This Porter’s Five Forces analysis also points to low switching costs as an
external factor that strengthens the intensity of the threat of new entry. For example,
many customers experience minimal consequences in shifting from eBay to new
entrants’ online marketplaces. The moderate cost of brand development is also included
in this external analysis. Based on this external factor, new entrants need large funds to
popularize their brands in the industry. In contrast, eBay Inc. already has a popular
brand among consumers and merchants. Furthermore, high economies of scale give
eBay Inc. an advantage in effectiveness and efficiency. The global scale of the
company’s trading platform, classifieds, and other e-commerce operations creates
effectiveness and efficiencies that many new entrants find difficult to match. Moreover,
high economies of scope are a factor that this Five Forces analysis attributes to the
weakening of the threat of new entrants. For example, the scope of eBay’s operations
(marketplace, classifieds, and ticket exchange) increases business performance
through expertise development and human resource sharing within the organization.
This external factor is a barrier to entry because new firms likely lack the operational
scope to achieve such competitive advantages. This aspect of the Porter’s Five Forces
analysis of eBay Inc. reveals that new entry is a moderate strategic issue in managing
the company.

eBay Inc. SWOT Analysis & Recommendations

UPDATED ONUPDATED ON DECEMBER 1, 2017 BY CHRISTOPHER MITCHELL
 An eBay office in
Toronto in 2014. Based on a SWOT analysis of eBay Inc., recommendations for innovation,
decentralization, and expansion are suitable in addressing internal and external strategic factors
in the e-commerce industry. (Photo: Public Domain)

eBay Inc. expands its business in the online marketplace, classified listings, and ticket
exchange markets and beyond by effectively using strategic strengths suited to the e-
commerce industry to overcome weaknesses, exploit business opportunities, and
counteract threats. These strengths, weaknesses, opportunities, and threats (SWOT)
are internal and external strategic factors that influence the trajectory of eBay’s global
business growth and development. For example, strengths affect the company’s ability
to respond to threats in the online auction and retail industry environment. The results of
this SWOT analysis of eBay Inc. put the online trading platform business in context. As
a main player in the industry, the company’s performance relative to the SWOT
variables sheds light about the challenges facing other firms that reach consumers and
sellers through the Internet and related technologies. In this SWOT analysis
consideration, eBay’s generic competitive strategies and intensive growth strategies are
examples of managerial approaches to growing online operations and attracting and
retaining consumers and vendors.

A SWOT analysis of eBay Inc. provides insights for managers regarding the internal
factors (strengths and weaknesses) and external factors (opportunities and threats),
 and the degree of their influence on business strategies. For example, the analysis
determines the level of impact of weaknesses on the competitiveness of the company’s
online marketplace platform and classifieds websites against Amazon, Walmart
Marketplace, Etsy and Alibaba, as well as smaller competitors like Rakuten, Bonanza,
Newegg, eBid, eCrater, and Ruby Lane. Thus, eBay’s strategic management must
consider SWOT factors in improving the performance of the multinational online trading
business.

eBay’s Strengths (Internal Strategic Factors)

This aspect of the SWOT analysis model enumerates the internal strategic factors that
support business growth and global competitiveness. In this case of eBay Inc., these
internal factors are strengths that enable growth and expansion in the e-commerce
industry. The company can use these strengths to increase profitability and maintain a
robust business. The following are eBay’s main strengths:

1. Strong brand
2. Cost-effectiveness based on economies of scale
3. Region-specificity of operations
4. High effectiveness of service

eBay Inc.’s strong brand is one of its major competitive advantages. For example,
because of its popularity, the company’s brand is easily recognizable among consumers
and merchants. This internal strategic factor makes the company competitive against
other e-commerce firms. On the other hand, cost-effectiveness based on economies of
scale is a strength that supports the fulfillment of eBay’s corporate vision and mission
statements. This internal factor contributes to the company’s prominence as one of the
biggest players offering online marketplace, classifieds, and ticket exchange services
over the Internet. Cost-effectiveness also enhances eBay’s operations management,
which shapes the operations of StubHub, Kijiji, and other subsidiaries. Moreover,
region-specific operations lead to flexibility and competitiveness in responding to
challenges in regional online retail/auction markets. This strength is based on eBay’s
organizational structure, which involves geographical divisions that broadly group
regional markets. Furthermore, the company’s trading websites attracts consumers and
sellers/vendors because of high effectiveness. This internal factor is partly based on an
organizational culture that encourages results-oriented excellence. The company’s
management aims for strategies that capitalize on such strengths determined in this
SWOT analysis.

eBay Inc.’s Weaknesses (Internal Strategic Factors)

In this aspect of the SWOT analysis model, the focus is on internal strategic factors that
hinder business growth and development. In eBay’s case, these internal factors are the
weaknesses that impose difficulties in improving the performance of the online
auction/retail marketplace platform, classified listings websites, and ticket exchange
 business. To improve competitiveness and performance, the company must overcome
these weaknesses. eBay Inc. has the following main weaknesses:

1. Limited emphasis on innovation

2. Limited flexibility to market variations
3. Imitable business model

Even though results-oriented excellence is the focus of eBay’s organizational culture,

innovation is not the top priority of the company. This internal factor is a weakness that
limits the growth and competitiveness of the global e-commerce corporation because
innovation is a major growth driver in firms with trading websites or operations chiefly
through the Internet. On the other hand, eBay’s organizational structure maintains
strong centralized functional units, which is beneficial in some ways, but
disadvantageous to the business. For example, strong centralized units support
organizational cohesiveness and consistency. However, the same internal strategic
factor limits management flexibility to geographic and business-type variations in the
international market. Also, the imitable nature of the company’s business model is a
weakness that contributes to competition, especially involving new entrants. eBay Inc.’s
strategies must overcome or reduce the impact of these internal factors identified in this
aspect of the SWOT analysis.

Opportunities for eBay (External Strategic Factors)

This aspect of the SWOT analysis model identifies the external strategic factors that
facilitate or support business growth and improvement. In this case, eBay Inc. has
growth opportunities based on external factors in the e-commerce industry. The
company’s management must develop appropriate strategies that suit these
opportunities. The following are eBay’s main opportunities:

1. Expansion of operations to more markets

2. Improvement in innovation rate
3. Improvement in customer service quality
4. Diversification

eBay has an opportunity to expand its online operations to other markets. Currently, the
company’s marketplace, classifieds, and ticket exchange revenues are generated
mainly in the United States and some European markets. This external strategic factor
can increase revenues and spread risk among more varied e-commerce markets. Such
expansion should capitalize on rising online purchase rates and technological trends,
such as the ones determined in the PESTEL/PESTLE analysis of eBay Inc. In relation,
the company has an opportunity to improve its innovation for competitiveness through
product development. For example, innovating new products for better user accessibility
through the Internet can increase the company’s base of consumers and
merchants. eBay’s marketing mix or 4P should reflect any such change. The opportunity
to improve customer service quality is an external factor that requires strategies for
improving customer satisfaction and managing customers’ expectations. These
 strategies add to eBay’s corporate social responsibility (CSR) strategy, and enhance the
attractiveness of the company’s trading, classifieds, and ticket exchange websites.
Moreover, the company can diversify to improve business resilience. Through this
external strategic factor, the company can create new revenues streams aside from
online retail/auction and other existing operations. In this aspect of the SWOT analysis
of eBay Inc., the external factors present major opportunities for improved revenues,
profitability, and competitiveness.

Threats Facing eBay Inc. (External Strategic Factors)

In this aspect of the SWOT analysis model, the emphasis is on the external strategic
factors that have potential to reduce business performance. This case points to the
possible decline in eBay’s performance due to such external factors in its business
environment. The company must protect its business from these factors that threaten
profitability and survival in the online trading industry. The following threats are the most
relevant to eBay Inc.:

1. Strong competition
2. Imitation
3. Potential industry disruption through new technologies

Strong competition is a major threat determined in the Porter’s Five Forces analysis of
eBay Inc. For example, the company faces rivalry with big e-commerce companies like
Amazon, as well as smaller ones. This external strategic factor is a growth barrier in the
industry environment. On the other hand, imitation is a threat because other firms or
new entrants can copy eBay’s business model using available technologies for website
operations. Also, the company faces potential industry disruption, which is based on
technological trends. This external factor can drastically change the company’s
business performance. Managers must ensure continuous improvement of competitive
advantages to address the external strategic factors in this aspect of the SWOT
analysis.

Summary & Recommendations – SWOT Analysis of eBay Inc.

Summary. The strengths of eBay Inc., such as the strong brand and effectiveness of
service, make the e-commerce business competitive. These internal strategic factors
support the company in addressing competition and other challenges in the global
industry environment. However, weaknesses and threats impose pressure on the
business. For example, this SWOT analysis points out that the company’s imitable
business model makes it vulnerable to competition. eBay’s strategies must protect its
business from such challenges. These strategies can further benefit the online business
by considering the opportunities identified among the external factors.

Recommendations. The recommendations in this case are intended to strategically

respond to the internal factors and external factors in the industry environment. The
 company’s management must especially consider the opportunities for business growth.
Based on the results of this SWOT analysis, it is recommended that eBay Inc.:

1. Increase its rate of innovation to address rapid changes in technologies, and to address the
threat of imitation.
2. Increase its degree of decentralization to improve business flexibility to e-commerce market
differences.
3. Expand operations internationally, building on economies of scale.

eBay Inc.’s Organizational Culture of Results-Oriented Excellence

(Analysis)
UPDATED ONUPDATED ON DECEMBER 1, 2017 BY NATALIE QUINN

An eBay building in
Kleinmachnow, Germany. The attributes of eBay Inc.’s corporate culture present the advantage
of excellence through results. However, these cultural traits have disadvantages that the e-
commerce company must manage to strategically position its business for long-term growth in
the industry. (Photo: Public Domain)

eBay Inc.’s organizational culture is a business response to the dynamics of the online
retail market and the e-commerce industry environment. The company utilizes its
corporate culture as a strategic tool to promote effectiveness in the global
trading/marketplace platform, auction and classifieds website operations, and related
services. Effectiveness contributes to competitive advantages that are essential to
addressing the forces identified in the Porter’s Five Forces Analysis of eBay Inc. A firm’s
organizational culture or corporate culture defines the values, customs and traditions
that guide employees’ decisions and shape their mindsets and behaviors. In this case of
eBay’s corporate culture, results orientation is emphasized as a crucial aspect of human
 resource development and management. The company also pushes for holism in how
workers fulfill their jobs and affect others through the Internet and other media.
Thus, eBay’s corporate social responsibility (CSR) strategy is culturally supported. For
example, cultural attributes influence employees to consider all aspects of the
organization, including subsidiaries like StubHub and Kijiji, and all aspects of the
business environment, including consumers and sellers/vendors. The company’s
organizational culture is a pillar for long-term success in the rapidly changing e-
commerce landscape.

eBay’s corporate culture guides managers in developing strategies that enhance human
resources and address challenges in e-commerce. For example, the company’s cultural
values encourage results-based effectiveness in the online marketplace platform
business. Cultural features help fulfill eBay Inc.’s corporate mission and vision
statements. For instance, the corporate culture ensures that the company’s
multinational presence attracts merchants and buyers. This condition addresses
competition against Amazon, Etsy, Walmart Marketplace, Alibaba, Rakuten, and other
players in the industry. Through corresponding behavioral characteristics of employees,
the company strategically uses its organizational culture for profitable business
performance.

eBay’s Organizational Culture Type and Characteristics

eBay Inc. has corporate culture of results-oriented excellence. This culture is

designed to promote business effectiveness through human resource development.
Excellence and results orientation are core cultural factors that the e-commerce
company views necessary for ensuring competitiveness in the online environment for
retail, auctions, classified listings, and ticket exchange transactions. The attributes of
eBay’s organizational culture enhance the resilience of the international
trading/marketplace platform business, and develop workers’ ability to support strategic
management. The following characteristics represent eBay’s corporate culture:

1. Excellence
2. Results orientation
3. Inclusion and diversity

Excellence. Excellence is a core cultural characteristic of eBay. The company believes

in the importance of extraordinary human resources in strategically growing an
extraordinary e-commerce business. In this way, the organizational culture contributes
to the business strengths shown in the SWOT analysis of eBay Inc. For example,
excellence in employee performance leads to effective services that attract consumers
and merchants to the company’s online retail/auction platform and classifieds websites.
In implementing this attribute of the corporate culture, human resource management
programs motivate workers to achieve and maintain excellence in supporting the
company’s marketplace/trading platform and related operations.
Results Orientation. Aside from excellence, eBay also applies results orientation in its
organizational culture. This cultural trait encourages workers to focus on the target
results of the online marketplace, classifieds and ticket exchange business, and make
decisions to achieve those results. For example, with a holistic approach, eBay Inc.
motivates employees to maximize their results by considering each other and
customers, aiming for positive tangible impact on individuals all over the world. The
company uses its corporate culture to strategically manage the effects of competitors,
such as Newegg, Bonanza, Ruby Lane, eBid, and eCrater, and to address challenges
linked to the online nature of the business.

Inclusion and Diversity. eBay’s organizational culture promotes a diverse workforce

and an inclusive workplace. This cultural characteristic leads to diversity in workers’
training and skills suited to the challenges in online retail, classifieds, and ticket
exchange operations. Also, inclusion promotes high employee morale. The company
encourages employee behaviors that contribute to a wealth of ideas. For example,
inclusion and diversity enables creativity in addressing the industry trends outlined in
the PESTEL/PESTLE analysis of eBay Inc. Thus, the company’s organizational culture
facilitates management decisions and strategies for improving resilience in global e-
commerce business.

eBay’s Corporate Culture: Advantages & Disadvantages,

Recommendations

Advantages. An advantage of eBay’s corporate culture is the emphasis on results-

oriented excellence, which motivates employees to exceed strategic expectations. This
cultural trait helps satisfy goals for growing the multinational e-commerce business.
Such excellence supports eBay’s generic competitive strategy and intensive growth
strategies. Another advantage of the company’s organizational culture is that it
promotes diversity and inclusion that boost performance. For example, managers use
these cultural factors to improve workers’ morale and the company’s innovation.
Innovation improves the competitiveness of the company’s online trading and classified
listings websites and relates services.

Disadvantages. A disadvantage or weakness of eBay Inc.’s organizational culture is

the lack of emphasis on continuous learning. Continuous learning is a cultural
characteristic that improves innovation at the employee and organizational levels.
Another disadvantage of the company’s corporate culture is the limited cultural
emphasis on speed and efficiency. These factors are needed to ensure the strategic
responsiveness of the business to problems experienced in the international markets for
online retail/auction trading, classified listings, and ticket exchange.

Recommendations. Recommendations with regard to eBay’s corporate culture are

based on the aforementioned disadvantages. The company’s management must
address these cultural disadvantages or weaknesses to ensure the continued success
of its e-commerce operations. For example, increasing efficiency can attract more
 merchants to the marketplace website. Given its current organizational culture, it is
recommended that eBay Inc.:

1. Add cultural emphasis on continuous learning to support continuous business improvement and
to keep the company abreast of the latest technologies.
2. Add cultural emphasis on speed and efficiency, which are essential to e-commerce
competitiveness.

eBay Inc.’s Organizational Structure for Diverse Operations

(Analysis)
UPDATED ONUPDATED ON SEPTEMBER 8, 2018 BY NATALIE QUINN

An eBay office in
Toronto, 2014. eBay Inc.’s organizational structure is advantageous because it addresses
differences among e-commerce business operations. However, some changes in the corporate
structure are recommended to address the disadvantageous effects of business-type divisions’
limitations on strategic implementation. (Photo: Public Domain)

eBay Inc.’s organizational structure is based on types of business operations in e-

commerce. In this regard, the company’s corporate structure is a result of strategic
management needs of its marketplace website and related operations. A firm’s
 organizational structure or corporate structure is the design of the system and
arrangement of components in the organization. In eBay, for example, the
organizational structure determines how divisions or groups relate with each other. The
company’s structural characteristics reflect strategic management per type of business,
such as online retail and auction operations, and classifieds operations. eBay uses its
structure to effectively manage strategic plans for attracting more consumers and
sellers/vendors to its multinational trading platform. Effective management is crucial to
maintaining services that suit target customers accessible through the Internet. eBay
Inc.’s corporate structure encompasses the structures of subsidiaries, such as Kijiji and
StubHub. As a result, merchants and other users can expect similarities in processes
and management between the company and its subsidiaries.

Through structural attributes and related aspects of the e-commerce business

organization, eBay’s generic strategies for competitive advantage and intensive
strategies for growth are implemented. Appropriately designed, the company’s
organizational structure is a mechanism for successfully implementing and managing
strategies. Such appropriateness contributes to competitiveness, which addresses the
strong force of competitive rivalry assessed in the Porter’s Five Forces analysis of eBay
Inc. For example, structural characteristics enable management decisions for the
integrity of the company’s marketplace operations. Thus, the corporate structure is
partly responsible for business resilience.

eBay’s Organizational Structure Type & Characteristics

eBay Inc. has a business-type multidivisional organizational structure. This M-form

or multidivisional corporate structure involves divisions that represent each type of the
company’s e-commerce business operations. For example, eBay has a division for its
online operations involving the marketplace website and related services. This
corporate structure answers the strategic challenges in managing different but related
global operations, including retail/auction services. The corresponding structural
features facilitate the effective management of demands and preferences of
consumers/buyers and merchants. The following are the major aspects of eBay’s
corporate structure:

1. Business-type divisions (primary structural characteristic)

2. Geographical divisions
3. Functional units

Business-Type Divisions (Primary Structural Characteristic). Business-type

divisions divide eBay Inc.’s organization according to the type of operations in the online
environment. For example, one of the company’s three divisions encompasses
marketplace operations. The StubHub division is for the StubHub ticket exchange
website and related services, and the Classifieds division is for classified listings and
related services. Thus, the operations of subsidiaries like Kijiji and StubHub are grouped
based on their type of e-commerce operations. These business-type divisions
affect eBay’s marketing mix or 4Ps. Expansion of the company’s market reach through
 the Internet and other technologies could lead to the creation of new business-type
divisions, or reforms in the organizational structure. Currently, eBay’s corporate
structure has the following business-type divisions:

1. Marketplace
2. StubHub
3. Classifieds

Geographical Divisions. Divisions based on geography are a minor characteristic of

eBay’s organizational structure. This structural feature facilitates the management of
regional differences in operations, contributing to the strengths of the global online retail
and auction business, as identified in the SWOT Analysis of eBay Inc. These divisions
of the corporate structure recognize the diversity of markets where the e-commerce
marketplace platform operates. This condition supports the implementation of eBay’s
corporate social responsibility (CSR) strategy. For example, different CSR tactics are
applied in these divisions, even though the company’s trading website is globally
accessible through the Internet. In addition, this structural characteristic ensures
regional suitability of service features to the preferences of consumers and sellers. At
present, eBay’s corporate structure has the following geographical divisions:

1. Americas
2. Europe, Middle East & Africa
3. Asia Pacific

Functional Units. eBay’s organizational structure involves functional units for cohesive
management of the multinational e-commerce business. In this structural attribute, the
company considers strategic challenges, such as the technological trends affecting the
retail industry identified in the PESTEL/PESTLE analysis of eBay Inc. For example,
through functional units of its corporate structure, the company implements new
strategies for technological enhancement in subsidiaries. This structural feature
maintains integrity and cohesion that strengthen the business against competitors
like Amazon, Rakuten, Bonanza, Alibaba, and Walmart Marketplace. Currently, the
following functional units are in eBay’s organizational structure:

1. Technology
2. Legal Affairs
3. Global Operations
4. Strategy
5. Product
6. Finance
7. Communications
8. Human Resources

eBay’s Corporate Structure: Advantages & Disadvantages,

Recommendations
 Advantages. An advantageous effect of eBay’s organizational structure is strategic
alignment to operational differences. For example, the structural characteristic of
business-type divisions overcomes managerial challenges that are based on the
differences among the company’s businesses, inclusive of the marketplace business
and classifieds business. Another advantage of eBay Inc.’s corporate structure is
cohesion through functional units. Such cohesion helps streamline all global e-
commerce operations. The organizational structure helps strengthen brand image
through cohesion and consistency that improves the perception of consumers and
vendors regarding the company’s trading websites and services.

Disadvantages. A disadvantage of eBay Inc.’s corporate structure is the relative

limitation of business-type divisions. Even though these divisions are the company’s
primary structural characteristic, they are relatively limited because of strong functional
units. Thus, the organizational structure presents a challenge in balancing the effects of
business-type divisions and functional units. Another disadvantage is the general nature
of eBay Inc.’s geographical divisions, which broadly represent various markets of the
international online retail/auction business. For example, the company has only one
geographical division that covers operations in the Americas, despite market disparities
within the region. The corporate structure poses challenges to addressing management
concerns on variations among local markets.

Recommendations. eBay’s organizational structure is effective in supporting the

business in its current condition, with its current needs. The company succeeds in
responding to the competitive forces of firms like Etsy, Newegg, eBid, Ruby Lane, and
eCrater. However, to survive in the long term despite rapid developments of the market
and the Internet and related technologies, it is recommended that eBay Inc.:

1. Increase the autonomy of business-type divisions to improve strategic effectiveness of

marketplace and other subsidiaries.
2. Create more geographical divisions by dividing existing ones to improve strategic
appropriateness in addressing variations in the preferences of consumers and merchants
across regional markets.

eBay Inc.’s Generic Competitive Strategy & Intensive Growth

Strategies
UPDATED ONUPDATED ON NOVEMBER 27, 2017 BY NATALIE QUINN
 An eBay office in
Toronto, 2014. eBay Inc.’s generic strategy (Porter’s model) for competitive advantage and
intensive strategies for growth are based on minimizing costs and building the market share of
the e-commerce business. (Photo: Public Domain)

eBay Inc.’s generic strategy for competitive advantage focuses on economies of scale
for the profitability of the online auction and retail platform business. In Michael E.
Porter’s theory, generic strategies determine competitive advantages in target markets.
eBay’s economies of scale are a foundation on which the e-commerce business grows
and expands globally. On the other hand, intensive growth strategies determine the
growth of operations. In this case, eBay’s intensive strategies for growth mainly aim to
increasingly penetrate target markets. With its generic competitive strategy, the
company applies intensive growth strategies that capitalize on the economies of scale
of the online trading platform business. These strategies and their corresponding
strategic objectives support eBay’s mission statement and vision statement, which aim
for industry leadership against competitors like Amazon, Rakuten, Etsy, Bonanza, and
Newegg. For example, management practices based on eBay’s generic competitive
strategy work toward attracting more consumers to the company’s services. These
practices are applied in the operations of eBay’s marketplace and the operations of
subsidiaries, such as StubHub and Kijiji.
eBay’s generic strategy and intensive strategies are among the most basic factors in
managerial decisions for increasing the performance of the online trading platform
business. Competitive advantages are developed with technological foundations, aimed
at globally growing and expanding the business. With a suitable generic competitive
strategy and relevant intensive growth strategies, eBay Inc.’s online marketplace thrives
against competitors, such as eBid, Ruby Lane and eCrater. For example, matching
strategic objectives enable the company to attract and retain a growing population of
consumers worldwide.

eBay’s Generic Strategy for Competitive Advantage (Porter’s Model)

eBay Inc.’s generic strategy is cost leadership. The company develops and maintains
competitive advantage based on cost minimization, which translates to low prices or
high profit margins. In this case, for example, eBay’s generic competitive strategy
involves technologies that minimize fixed and variable costs in multinational e-
commerce operations. Consumers and sellers/merchants are drawn to the online retail
and auction-trading platform based on attractive pricing strategies, which are an
element of eBay’s marketing mix or 4P. Also, being a cost leader leads to business
strengths against competition, which is a strong force shown in the Porter’s Five Forces
Analysis of eBay Inc. Thus, the company’s generic strategy entails management
practices, intensive growth strategies, and related strategic objectives that minimize
costs and capitalize on low operating costs. The resulting competitive advantages make
the firm’s marketplace influential on prevailing industry prices.

In light of eBay’s global e-commerce business nature, the cost leadership generic
competitive strategy necessitates strategic objectives involving low prices or wide profit
margins. For example, a suitable strategic objective is to continually integrate cutting-
edge technologies for economies of scale. As a consequence, the company’s generic
strategy requires online digital technologies for competitive advantage. Another
strategic objective is to increase the population of users who trade through the
company’s marketplace. This cost-leadership move further spreads fixed costs and,
consequently, increases business potential to raise profit margins or offer competitive
prices to consumers and sellers on the online retail platform. As a cost leader, eBay
manages its generic competitive strategic implementation by balancing prices, profit
targets, and attractiveness of online auction transactions.

eBay’s Intensive Strategies for Growth

Market Penetration (Primary Strategy). eBay’s dominant intensive growth strategy is

market penetration. Through this intensive strategy, the company maintains business
growth by increasing the number of people who trade through its multinational e-
commerce platform. For example, by increasing the number of consumers who
purchase items on the online marketplace, the business grows in terms of higher
revenues and scale of operations. Such growth contributes to the company’s scale of
operations. As a result, the business strengthens its online auction services and related
operations, adding to the strengths shown in the SWOT Analysis of eBay Inc.
Corresponding strategic objectives and management approaches are implemented in
subsidiaries like Kijiji and StubHub. As a cost leader, one of eBay’s strategic objectives
based on market penetration is to meet competition with firms like Alibaba
and Walmart (Walmart Marketplace) by enhancing technological efficiency. The cost
leadership generic strategy creates competitive advantage that empowers the company
in using the market penetration intensive strategy for growing the customer base of the
business.

Market Development. Market development is a secondary intensive growth strategy in

eBay’s global marketplace e-commerce business. Growth is achieved in this intensive
strategy by establishing new operations in new markets or market segments. In this
case, for example, creating a new website for narrowly focused classified listings, such
as for sporting goods, establishes eBay’s presence in such a market segment. Thus, in
market development, one of the strategic objectives is to create new trading websites to
establish new online retail or auction operations in identifiable market segments. In
using this intensive growth strategy, the company’s management applies the cost
leadership generic competitive strategy to attract vendors and buyers in new markets.

Product Development. eBay is minimally dependent on product development, which is

a supporting intensive strategy for growing the online auction business internationally. In
this intensive growth strategy, the company develops and introduces new products to
consumers and sellers, who are the target users of the e-commerce platform. Growth is
achieved by creating new revenue streams involving new products. New products may
require changes in eBay’s corporate structure. For example, a new set of online retail
services provided on the company’s marketplace website may require a new
organizational division for effective management. The industry trends shown in
the PESTEL/PESTLE analysis of eBay Inc. influence the application of this intensive
strategy for growing the business. For instance, trading through mobile devices is a
trend that warrants the continual development of new products/services for mobile
users. Thus, a strategic objective based on product development is to increase the
company’s rate of technological innovation. New products/services must satisfy the cost
minimization requirement under the cost leadership generic strategy to ensure eBay’s
competitive advantages.

Diversification. Diversification is a supporting intensive growth strategy in eBay’s

global marketplace business. To achieve growth in this intensive strategy, the e-
commerce company needs to expand through new businesses or entry into new
industries. For example, full ownership of PayPal diversified eBay’s business to include
operations in the online financial services industry from 2002 to 2015. A strategic
objective associated with this intensive growth strategy is to grow the online retail and
auction business by acquiring related companies that operate in other industries, such
as a smaller firm that operates a display-advertising network. In this case, to satisfy
eBay’s cost leadership generic competitive strategy and for strategic management
alignment, acquired firms must operate at low costs.
eBay Inc.’s Vision Statement and Mission Statement (Analysis &
Recommendations)
UPDATED ONUPDATED ON NOVEMBER 21, 2017 BY NATALIE QUINN

eBay’s building in
Kleinmachnow, Brandenburg, Germany. eBay Inc.’s corporate vision statement and corporate
mission statement point to global operations and leadership in the e-commerce retail industry.
(Photo: Public Domain)

eBay Inc.’s position as one of the largest online retail companies in the world is hinged
on the effective application of the firm’s mission and vision. A corporate mission
statement determines what the business does. In contrast, a corporate vision statement
describes a target future state of the business. In this case, eBay’s mission statement
indicates business operations that include offering online auction services and related
products. On the other hand, eBay’s vision statement informs managers about targets
for business operations in the online retail industry and e-commerce market. The
company’s strategies and strategic objectives for its operations and the operations of
subsidiaries like Kijiji and StubHub are developed based on these statements. For
example, Kijiji’s strategies for consumers in Canada and Italy are based on eBay’s
corporate mission regarding overall online operations. In relation, eBay’s corporate
vision gives strategic direction that aligns all the operations of the multinational
business.

Investors can use the corporate mission and corporate vision in evaluating eBay Inc.
For example, the company’s mission statement shows investors what the business aims
to do, with consideration for existing and new e-commerce operations. On the other
hand, the company’s vision statement presents what investors can expect of the online
retail business, such as in terms of plans for future growth and expansion in the global
 market. The company’s strategic management practices are also based on these
corporate statements.

eBay Inc.’s Mission Statement

Based on its mission statement, eBay’s corporate mission is “to provide a global
trading platform where practically anyone can trade practically anything.” Thus,
eBay’s corporate mission statement indicates that the multinational online auction and
retail business is essentially a global trading venue. This statement provides a good
overview of the nature of the e-commerce business and its strategic management. For
example, the company’s global trading platform forms the core of the business. In this
regard, the following components define eBay Inc.’s corporate mission statement:

1. Provide a global trading platform

2. Practically anyone
3. Trade practically anything

The first component of eBay’s mission statement shows that the business revolves
around a global trading platform. This means that the company offers its services
internationally. Also, the multinational business uses information technologies, as
implied by the term “platform.” The second component of the corporate mission
indicates that the target users are all the people who are interested in using the global
trading platform. In addition, the e-commerce platform allows the trade of practically
anything, as stated in the third component. These components of eBay’s corporate
mission direct management to ensure business growth through strategies that include
technological enhancement. For example, the company strategically expands its
operations through the acquisition of related online technology firms like StubHub. eBay
Inc.’s generic strategy for competitive advantage and intensive strategies for growth are
based on the corporate mission statement. Similarly, this mission is a basis for the
company’s corporate vision statement.

eBay Inc.’s Vision Statement

eBay’s corporate vision is “to be the world’s favorite destination for discovering
great value and unique selection.” The company considers this statement as its
corporate mission. However, based on the aforementioned definitions of corporate
vision and mission statements, the company’s supposed mission statement is
technically a corporate vision statement. This is so because the statement describes a
state or condition that the company aims to achieve, instead of what the multinational
business does in its operations. For example, “to be the world’s favorite destination” is a
clear description of such a state. Thus, eBay’s vision statement pushes for e-commerce
leadership in the online retail market, thereby requiring corresponding strategic
management practices for achieving the top position in the industry. Based on the
preceding definitions and considerations, eBay Inc.’s corporate vision statement has the
following components:
1. To be the world’s favorite destination
2. For discovering great value and unique selection

The first component of eBay’s vision statement clearly specifies the aim for leadership
in the online auction and retail market. This aim implies that the company sees itself as
the future top player in the industry. In addition, eBay’s corporate vision statement
shows that such leadership is in terms of enabling the world in discovering great value
and unique selection. Considering the company’s corporate mission statement, the
value and selection stated in this vision are for sellers and buyers or consumers
worldwide. Fulfilling this corporate vision requires effective strategic use of competitive
advantages based on business strengths, such as the ones identified in the SWOT
Analysis of eBay Inc. Moreover, to become the “world’s favorite destination,” the
company must overcome competition with firms like Amazon, Etsy, Rakuten, Newegg,
and Bonanza, as well as eBid, Ruby Lane, eCrater, Alibaba, and Walmart, whose
Marketplace is a direct competitor. The e-commerce business faces strong competition
in the global online retail market, as determined in the Porter’s Five Forces Analysis of
eBay Inc. Because of the aim for industry leadership specified in the corporate vision
statement, the company’s managers are expected to enact strategies for business
growth, high quality of services, and operational efficiency. For example, quality
improvement strategies are expected for the company’s core business and the
operations of subsidiaries like Kijiji.

Summary & Recommendations – eBay Inc.’s Corporate Mission &

Corporate Vision

Corporate Mission Statement. eBay’s mission statement satisfies most of the

conventional requirements in writing ideal mission statements. For example, the
company’s corporate mission statement specifies the nature of the business (global
trading platform), target customers (anyone or all sellers and consumers), scope of
operations and market (global), products (online trading, e-commerce retail services),
technology (implied online digital technology), and self-concept (practical). However, a
recommendation to improve eBay Inc.’s corporate mission is to complete it by adding
information about business philosophy, public image and human resources. This
recommendation can enhance corresponding strategic management.

Corporate Vision Statement. eBay’s vision statement satisfies most of the

requirements in writing ideal vision statements. For instance, the company’s corporate
vision is concise, clear, future oriented and stable for the long term. It is also abstract
enough to suit all relevant operations of the e-commerce retail business. Moreover, it is
challenging and inspiring, such as in terms of its focus on becoming the world’s favorite.
However, the company presents this statement as its corporate mission statement,
which creates potential confusion and misguidance in strategic management and
decision-making processes. As shown in the preceding analysis, the statement is
technically a corporate vision statement because of its characteristics. Thus, a
recommendation is that eBay Inc. label the statement as its corporate vision. In this
way, the company can expect higher strategic accuracy in fulfill its aims for the future of
its multinational business.