BUSINESS POLICY

Areeba Mughal BBA 8B (S17BBAH051)

 Assignment No.2

1. What is eBay’s problem?

 Former CEO, Whitman spent $6 billion to expand the company by

acquiring companies such as PayPal, Skype, StubHub, Rent.com,
Shopping.com, Stumbleupon & 25 % interest in craigslist. It does
provide profit growth and stock appreciation price but by 2008 eBay was
in problem.
 Company representatives spill new services that let the customers to
purchase eBay products outside of the main eBay website.
 eBay’s rival entered into the market (i.e Amazon) which was providing
similar service as ebay.
 By acquiring Skype and merging it with their business was not a good
idea after its acquisition Skype’s services had fallen down.

2. Which marketing strategy was eBay’s following: market development

or product development? Do you agree with it?

eBay was following Market Development.

I agree that eBay’s wanted to expand both business sales & growth, but its
wasn’t successful for eBay as they acquired too many companies in such a
small amount of time. Maybe they aren’t using the strategy properly And
also, they were not paying much attention on their acquired companies, if
they did Skype’s services wouldn’t have fallen down. By using Market
Development, business can attract large share of existing market for current
 product through Market Saturation and Penetration. It can lead to increased
revenue and company growth.

3. What decision-making process should CEO Donahoe utilize to make the

decisions necessary to change the company’s product, customer
approach and business model?

First it should analyze current situation of business acquisition and then

selecting those strategies which would help the business to improve its
revenue and attract more customers. Donahoe should analyze its customer
and cater their needs, and refresh its product offerings.
He should layoff the acquisitions which aren’t generating much revenue.