Comparison of eBay.com and Alibaba.

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Thomas Liquori

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Digitally signed by Thomas Liquori DN: cn=Thomas Liquori, email=thomasliquori@a ol.com, o=thomasliquori.me, l=New York, NY Date: 2010.09.05 16:57:16 -04'00'

12/16/2009

Professor Reddi: BUS451 By: Thomas Liquori, Danauda Benjamin, and Anca Barbu

EBay.com Introduction ................................................................................................................................. 3 EBay.com Products and Services .................................................................................................................. 5

TABLE OF CONTENTS

Comparison of eBay.com and Alibaba.com

Ebay.com Financial analysis .......................................................................................................................... 6

Ebay.com Last Three Year Financial Graphs ................................................................................................. 7 EBay.com TOWS Matrix Analysis .................................................................................................................. 9

EBAY.com TOWS Matrix Graph ................................................................................................................... 13

Competitive Forces for ebay.com ............................................................................................................... 14

EBay.com Industry Rivalry........................................................................................................................... 14 EBay.com Threat of Entrants ...................................................................................................................... 14

EBay.com Supplier Power ........................................................................................................................... 15 EBay.com Buyer Power ............................................................................................................................... 15 EBay.com Threat of Substitute Products or Services .................................................................................. 16 Ebay.com Core Strategies .................. ……………………………………………………………………………………………………17 EBay.com Differentiation Strategy ............................................................................................................. 17 EBay.com Cost Leadership Strategy............................................................................................................ 18 EBay.com Growth Strategy ......................................................................................................................... 18 EBay Growth Trend Graphs......................................................................................................................... 19 EBay.com Differentiation Strategy ............................................................................................................. 20 EBay.com Growth Strategy ......................................................................................................................... 20 Alibaba.com Introduction ....... ………………………………………………………………………………………………………………25 History of Alibaba.com................................................................................................................................ 27 Alibaba.com Products, Services, and Key Brands ....................................................................................... 29 Alibaba.com Last Three Year Financial Graphs ........................................................................................... 30 Alibaba.com Core strategies ....................................................................................................................... 31 Alibaba.com Growth Strategy ..................................................................................................................... 32 Alibaba.com Differentiation Strategy ……………………………………………………………………………………………………34 Alibaba.com Price strategy ......................................................................................................................... 35 Competitive Forces for Alibaba.com........................................................................................................... 37 BUS451 Page 2

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Alibaba.com Threats of New Entrants ........................................................................................................ 37 Alibaba.com Rivalry..................................................................................................................................... 38 Alibaba.com Supplier power ....................................................................................................................... 39 Alibaba.com Buyer Power ........................................................................................................................... 40 Alibaba.com Threat of substitutes .............................................................................................................. 40 Alibaba.com TOWS Matrix .......................................................................................................................... 41

Comparison of eBay.com and Alibaba.com

Alibaba.com Strengths ................................................................................................................................ 42

Alibaba.com Weaknesses ........................................................................................................................... 42 Alibaba.com Opportunities ......................................................................................................................... 43 Alibaba.com Threats ................................................................................................................................... 43

Alibaba.com SO Strategy............................................................................................................................. 43

Alibaba.com WO Strategy ........................................................................................................................... 44 Alibaba.com ST Strategy ............................................................................................................................. 44 Alibaba.com WT Strategy............................................................................................................................ 44 Comparitive Analysis ................................................................................................................................... 45

Group Investment Perspective ................................................................................................................... 46 Group Challenges ........................................................................................................................................ 47 Works Cited ................................................................................................................................................. 48 Works Cited: Continued .............................................................................................................................. 49 Ebay.com Last Three Years Income Statements ......................................................................... Appendix: A Ebay.com Last Three Years Balance Sheets .................................................................................Appendix: B Alibaba.com Last Three Year Income Statements .......................................................................Appendix: C Alibaba.com Last Three Year Balance sheets.............................................................................. Appendix: D

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BUS451

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Once upon a time during the dawn of the internet, a man named Pierre Omidyar decided to sell a broken laser pointer online on his website called EBay, named after his consulting company Echo Bay. The site at that time during the year 1995 was not primarily an auction site,

EBAY.COM INTRODUCTION

Comparison of eBay.com and Alibaba.com

the auction part was an afterthought and was named auction web. Auction web grew quickly

among internet fanatics, and soon Pierre had to hire several employees to take care of the many tasks that involved his day to day operation. After two years, the site name was changed to EBay, a site that was devoted to online auctions, soon after, the worldwide obsession with EBay and

consumers. Currently, Pierre is ranked #40 among the 400 richest Americans in the country by Forbes, released September 30, 2009.

EBay’s mission statement says,” eBay's mission is to provide a global trading platform where practically anyone can trade anything." EBay’s vision, “pioneers communities built on commerce, sustained by trust, and inspired by opportunity. EBay brings together millions of people every day on a local, national and international basis through an array of websites that focus on commerce, payments and communications”. Comparing the mission statement to the vision of the company gives off the impression that EBay doesn’t have focused priorities .This means the mission statement seems clearly focus on the website, eBay.com, but their vision statement is focused on the array of subsidiary websites. During the year of 1998, Pierre hired an experienced CEO named Meg Whitman to

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become head of the public exploding company who now had 130 employees and a spot on the New York Stock Exchange with a symbol as EBAY. Over the course of the next 10 years with Meg Whitman’s leadership, EBay mania grew into an enormous multinational company who two
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EBay is an online provider of marketplaces for the sale of goods and services.com and Alibaba. The products and services that EBay offers vary from online communication services to the sales of goods and services.com years ago employed over 15. EBay’s foreign entry strategies into other countries have played a key role in their success for worldwide domination in the online auction market. It also provides commerce. i r o u q e m Page 5 . o h T BUS451 a m i L s . In January 2008. John Donahoe took over Meg Whitman’s place as CEO. and currently EBay has 16.Comparison of eBay.000 employees in 39 countries.200 employees (an 8% employee increase in one year) in over 30 countries. online payments services and online communications offerings to individuals and businesses. platforms.

com and Alibaba.com: Bought by EBay in August 2005 for $634M EBay's apartment listing service platform Rent.com The products and services that EBay provides is an online marketplace for the sale of The key brands that the company has and operates are a number of subsidiary websites that are under the EBay umbrella.com: Bought by EBay in February 2005 for $415M EBay’s Swedish online auctioneer Tradera. The company’s key products and services include the following: • • • • • Online services for the sale of goods and services Online communication services Online payment and transactional credit services Online classifieds Advertising EBAY.goods and services.492.com: Bought by EBay in 2006 for a m i L s .com: Bought by EBay in February 2007 for $292M EBay's online shopping comparison website Shopping. i r o u q e m EBay’s green marketplace Worldofgood. 2002 for approximately $1.com Page 6 .com: Bought by EBay in October 2005 for $3B EBay’s credit at point of sale payment solution Billmelater.com: Bought by EBay in October 2008 for $910M o h T • • $48M • BUS451 EBay's marketplace to buy and sell tickets for events Stubhub. These companies include: • • • • • • EBay's fixed price media marketplace Half.com EBay’s payment solution Paypal.com: Bought by EBay in Oct.COM PRODUCTS AND SERVICES Comparison of eBay.504 EBay’s low cost connectivity communication platform Skype.

3 million in 2007. Net Profit in financial EBAY.9 billion in revenue.7 million in financial year ending 2008.com hosted more than 276 million users.18 million in 2007.13. The company recorded revenues of $8.com 2008 annual report for EBay. As of EBay’s 2008 annual report. in 2007 skype. skype.com and Alibaba. The increases in EBay’s financials for the past three years have been impressive. an increase from $613. According to Annualreports.com. as of EBay’s 2008 annual report. Some examples of the increases over the past year for EBay and some of its platforms include its payment option paypal. making it the world’s largest engine for reuse.COM FINANCIAL ANALYSIS Comparison of eBay. as of EBay’s 2008 annual report. A tremendous increase in EBay’s payment platform suggests that more people are becoming comfortable sending and receiving money over the internet.com.The company generates about 75% of its revenues from the US. 2009 is $23. The operating profit of the company was $2075.779. the company has seen tremendous increases and growth for the online giant.com now registers more than 405 million users.com year ending was $1. Germany and the UK. The increase in profits is attributed to acquisitions and increased revenues from advertising and the payments business.com not hosts nineteen currencies with more than $60 billion dollars in revenue. The current stock price as of November 5. paypal. can be seen in the chart on the next page in the below bottom right table. The increase of more than 47% shows that consumers are very comfortable with EBay and the platforms that the company provides.5 million as compared to $348.3% over 2007. In EBay’s communication segment platform of skype.541.3 million during the financial year ended December 2008. an increase of 11. as well as the number of internet users are growing as well. In 2007 delivered a total of $1. there are more than $100 billion worth of pre-owned items on EBay. i r o u q e m . BUS451 Page 7 o h T a m i L s .

000.S.000.30 $5.000.S.S. Dollars) Gross Profit (Millions of U.000.779.00 $5.000.00 $4.000.000.00 $6.00 $6.000.000.969.00 $7.00 $1. Dollars) $1.70 $4.00 $8. Dollars) Gross Profit (Millions of U.50 BUS451 Page 8 .S.40 Revenue (Millions U.com and Alibaba.000.000.2008 Year Income $9.00 $3.30 Fiscal Year Ending 2007 e m Revenue (Millions U.00 $3. Dollars) i L s .000.000.com 2007 Year Income $7. Dollars) Stock price as of 12/15/09: $22.00 $2.00 $7.00 $1.S.20 EBAY.00 $2.S.672.COM LAST THREE YEAR FINANCIAL GRAPHS Comparison of eBay.000.00 $- o h T Fiscal Year Ending 2006 $5. Dollars) Net Income (Millions U.50 $8.000.00 $2. i r o u q $348.713. Dollars) Gross Profit (Millions of U.00 $3.00 $1.000.000.909.00 $5.00 $4.00 $- Fiscal Year Ending 2008 2006 Year Income $6.00 $5.00 $1.S.000.000.S. Dollars) Net Income (Millions U.000.60 a m Revenue (Millions U.00 $4.S.000.125.000.30 $6.000.541.313.00 $$8. Dollars) Net Income (Millions U.

has about 14 million listings. the company has built a strong brand. EBay has 88 million active users and about 150 million listings worldwide and in any given day. as well as having a majority of the marketplace. i r o u q e m BUS451 Page 9 . The strengths that the company has can be argued that they were the first to enter the online auction business. some of them are unaware of any infringement. As of 2009. and systems as a concentrated effort. currently the brand value stood at $12.com TOWS MATRIX ANALYSIS Comparison of eBay. An increased number of customers contributed to the growth of the company. management.com and Alibaba.9 billion and was ranked 54th in brand value rankings. While some sellers commit fraud intentionally.com EBay faces high risk of internet fraud due to which it is involved in various litigations. threats. and it emerged as one of the largest global online auction website with presence in 39 countries. The external strength opportunities of EBay can be consisted of a strong market position due to wide usage. Below we will go over EBay’s strengths.EBay. For instance. some sellers might not be aware that certain products are not allowed for resale. This strength can maximize EBay’s opportunities. EBay’s internal strengths have focused on a swift increase in the number of users and number of product listings. The company does not o h T a m i L s . opportunities. EBay’s strong customer base and market position provides competitive advantage and gives EBay considerable bargaining power which will have a positive impact on the top line of the company. weaknesses. and strategies to get a better understanding of the strategic choices that EBay faces. EBay does not have an effective screening process in place to control sale of counterfeit products on its market places. over the years. EBay’s strength threats strategies can be consisted of reinforcement of marketing. EBay’s weaknesses can be favorably argued that the company has an insufficient screening process to control counterfeit products.

The weakness threats of the company can consist of the alliance with postal carriers implemented on the company’s website for sellers to choose from when shipping their items.8 million in a lawsuit which claimed that EBay failed to curb sale of counterfeit products. as they have been over the years. Other than having to pay damages. This affects the operations adversely. and they expose the company to uncertainty and large contingent liabilities. The damages awarded were as large as $56. EBay has to actively take measures to ensure it is not involved in any further litigation as they are counterproductive.com and Alibaba. In 2007. EBay might be prohibited from selling certain items or continuing certain business practices. the company is able to identify counterfeit products only after the items have been listed. and PartsRiver which claim that EBay. EBay has consistently been involved in various lengthy litigations. Litigations are expensive. were monopolizing markets. The company’s weakness opportunities strategies can consist of diversifying into new product markets. In most cases. Most of these lawsuits filed in 2006 and 2007 are still pending. The weakness threat strategies can be categorized as having an exposure to large contingent liabilities due to litigations. a lawsuit was filed alleging that EBay and PayPal. The company can also try to implement an online verification of goods being auctioned to avoid very expensive lawsuits and time consuming litigations that hurt the company. through various anti competitive acts. Lengthy litigations are expensive.com have effective tools to monitor and weed out such instances. Netcraft Corporation. time consuming and they result in diversion of significant operational resources. i r o u q e m .Comparison of eBay. BUS451 Page 10 o h T a m i L s . Skype and PayPal have infringed their patent rights. stretched over a period of two to three years because of which it is exposed to large contingent liabilities. This being the main area of contention. there were lawsuits filed by companies like Net2Phone. Many complaints were filed against EBay for offering counterfeit items.

Increasing popularity of used goods is another opportunity for the company. The total dollar loss due to these frauds has been $264. 75% of adults purchased used goods to save money. EBay would have to incur legal expenses. Revenues from interactive advertising which comprises search. More than a quarter of adults who had purchased used goods in the past six months (since August 2008) saved 76% or more off the retail price of the last item they purchased. Apart from this.1% from 2007.4% during 2007. According to the Internet Crime Complaint Center’s (IC3) statistics. display advertising and classifieds is expected to grow as at rate of 23. etc. Industry trends indicate the US consumers are buying used goods as a way to save money. credit card fraud or non delivery of goods. The threats that EBay faces are exposure to internet fraud that will increase costs and affect customer confidence adversely. both display ads and through classifieds. Online marketplaces have a high exposure to different types of fraud. During 2008. EBay marketplace has facilitated the reuse of an estimated $100 billion in goods. 88% of Americans believe that buying pre-owned goods amounts to recycling and is therefore environment friendly. In case of litigations. has been growing at a fast pace.2012 and generate $147 billion by 2012.com and Alibaba.6 million which works out to be an average loss of $934 per complaint. according to EBay sources. and there is a possibility that heavy penalty or compensation BUS451 Page 11 o h T a m i L s . i r o u q e m . internet fraud has been on a rise.com Some opportunities that EBay faces are rapid growth of internet display advertising and classifieds. In 2008.Comparison of eBay. pre-owned items have been increasingly popular. In the current uncertain economic situation where consumer spending has been decreasing.284 complaints which indicate an increase in complaints by 33. Effectively eliminating frauds is costly as the company as to incur large recurring expenses to monitor and prevent such frauds. Since 1998. There are various types of internet frauds including the sale of fake or counterfeit products. Online advertising. IC3 registered 275.

Comparison of eBay. and they are aware of its capability of providing far better than competition.com would have to be paid. Repeated failures might lead customers to believe that the systems are unreliable and reliability is especially crucial for the payments division which is seeking to expand its merchant services business. Consumers and competitors alike recognize eBay as a dominant force on the internet. System failures for long duration operational risk for EBay in 2008 had periods of interruptions for periods for as long as 22 hours. and PayPal was unavailable for five continuous days. Due to frequent unscheduled interruptions for long periods. Another example of a threat for EBay would be the unavailability of services that leads to loss of income. and alibaba. sell. eBay has several different platforms and segmentations under the company’s umbrella to help keep them afloat. This is the difference between eBay and their competitors. o h T a m i L s . this gives the company an advantage of trust and well being to consumers who may be new to the internet as well as online auctions.com.com. Since they were the first to the market for online auctions. i r o u q e m BUS451 Page 12 . In early 2007 Skype was unavailable for two continuous days.com and Alibaba. Although the company has similar commonalities with their rivals. the company’s reputation and reliability will be affected negatively. EBay’s competitive analysis in the marketplace gives the company a higher advantage over their competitors such as ioffer.com.

com and Alibaba.com Strengths – S Own majority of marketplace by being first Opportunities – O Diversification with the growth of consumers Threats – T Competition among rival internet sites o h T a m Global expansion in products and services ST – Strategies i L s SO Strategies .EBAY. i r o u q Weaknesses – W Poor screening process to control counterfeit goods WO Strategies e m Online product verification to control fraud WT – Strategies Alliance to postal services Reinforcement of marketing and management BUS451 Page 13 .COM TOWS MATRIX GRAPH Comparison of eBay.

i r o u q e m BUS451 Page 14 . o h T a m i L s .com. and earned customer loyalty very quickly among consumers.com has come long way as well since it opened up on the web a few years back. Another example of a threat of entry would be another auction site ioffer.com Porter’s Five Force model of competition is a key tool for diagnosing the competitive EBay.environment: COMPETITIVE FORCES FOR EBAY. In the case of eBay.com claims that they are an easier way o buy and sell items. Amazon. buyers and sellers can make offers’ to one another rather than waiting for an auction to end to purchase an item. EBay saw this type of strategy and quickly implemented it in the site to compete with ioffer. The threat of competition and rivalry is still there for eBay. EBay. Since then. Ioffer.com by using eBay’s ‘buy it now or make an offer’ option. Instead of auction style listings. it is not so simple for new entrants to compete with the online giant. For example. because it is more commercialized in some ways. which will be talked about in the next force of Porter’s model.com Industry Rivalry Industry rivalry is high when it is easy for new competition to enter the market. many new entrants have been trying to catch up to eBay.COM Comparison of eBay. Being that eBay was first to the market in 1995. Some people might feel more comfortable shopping on this site more than eBay. and have been in competition with eBay ever since they popped up online in the yearly millennium. it gave the company an edge early during the dawn of the internet.com Threat of Entrants Recently. the company has become a notable household brand name and customers are confident using eBay’s online software for buying and selling items.com and Alibaba.

Buyers have an option now to become a supplier themselves by becoming a drop shipper for suppliers.com Supplier power is higher when buyers have fewer choices from whom to buy. The drop shipper does not have to store any items in a warehouse or factory with this option. Customers want to solve their problems and many times they are more successful on-line than on-phone. especially eBay. Especially for eBay.com and Alibaba. EBay gives sellers an option to set up an online store for a monthly fee where shoppers can browse through products as they please. we see internet savvy businesses springing up offering more valuable goods and services at lower costs. thanks to the power of ECommerce. Both shoppers alike can find great deals at affordable prices from the comfort of their own home. as mentioned earlier in supplier power. and in turn continues the growth of eBay’s online website. many people are assuming roles as drop shippers. EBay. Businesses are forced to add value to their products and services to get loyalty. Many loyalty programs include excellent services that customers demand on-line. This type of supplier power gives an increase in products and services to the marketplace.EBay. The internet has increased the amount of supplier power to consumers. The logistics part is also at the main suppliers’ expense. Also.com Buyer Power Buyer power is higher when buyers have more choices. i r o u q e m . EBay offers all prices for all items. there are numerous drop shippers that have set up their own stores on eBay’s site. Another positive aspect for buyer power would be bargain shoppers surfing the web. Now with the advent of eBay. really not having to do too much work on the drop shippers’ part except collect their share from the sale. Drop shippers can earn money by listing items for suppliers and forwarding the orders to the main supplier. Individuals can have a thriving business selling goods of larger companies without having to carry inventory.com Supplier Power Comparison of eBay. BUS451 Page 15 o h T a m i L s . especially for bargain and impulse shoppers.

There have been an increasing number of fixed price sales over auction style listings over online auction sites such as eBay.com have recently been becoming a more popular way to price comparison shop online.com Buyer Power Substitute Price comparison sites Page 16 .com and Alibaba.com The strong competitive pressures coming from the attempts of companies outside of the industry to win buyers over have become more widespread in today’s E-Commerce market. Search engine and price comparison websites are moving in the direction of online retailing and auctions. i r o u q Bargain shopper paradise e m Rivalry Ioffer. Porter's Five Forces Model can help demonstrate the attractiveness of starting your on-line business or evaluating a current one such as eBay.com Amazon.EBay. The model below will help to better illustrate eBay’s five forces: o h T BUS451 Supply Power Drop shipping for suppliers a m i L s Threats Competition with rival sites . The internet offers avenues of competition to existing companies and opportunities for start ups. Now businesses can enter the market on-line with few barriers to entry.com Threat of Substitute Products or Services Comparison of eBay. Yahoo shopping and price comparison search engines such as Microsoft’s Bing.

com and Alibaba. “by allowing customers to create individual auctions and online stores in order to sell new and used products. A differentiation strategy that the company possesses is the quality service security that the online website offers. and a peer review process in a global environment”. o h T a m i L s . and growth strategy.EBay’s strategic statement describes EBay’s activities. providing secure transaction services. The global environment is open to all and new markets alike.com Differentiation Strategy EBay pursues a cost leadership. EBay monitors many if not all of the listings posted on the site through the service of thousands of employees. differentiation. Buyers and sellers both have the opportunity to “rate” how the transaction went. So what does this strategic statement EBAY. i r o u q e m BUS451 Page 17 .com actually mean to the consumers of eBay? The opportunity to have individual auctions and online stores removes the physical barriers between buyers and sellers. which is very impressive. The communities of interest creates added value through base of additional information. Another impressive tool that EBay has was the first to implement as part of their differentiation strategy was the ability of quality control by offering peer review. resulting in a neutral rating. or whether the transaction was just ok. EBay. and always stays one step ahead of their competition. causing a positive rating. This process is facilitated by the ability to create communities of interest. The ability to have peer review evokes customer confidence in buying from a seller that you never met or will see. The strategy describes the core competencies of eBay through the several factors that are addressed.COM CORE STRATEGIES Comparison of eBay. or the item was not as described or not received at all. and all buyers should beware resulting in a negative rating. A competitive advantage will be created if eBay keeps it first mover advantage. Whether the item was received as described and the shipment was fast.

Amazon is significantly. • Fixed price items are now 49% of GMV Page 18 BUS451 . An example of this strategy could be the alliance by eBay and Tom.EBay.com Growth Strategy Another strategy that an eBay implement is a growth strategy that involves the fight to keep up with rival competitors while still trying to grow and expand into an ever so competitive market.com A cost leadership strategy that eBay has is the ability to form alliances with numerous companies. technology.com. In fact. The three bright spots for eBay's quarter were: • • o h T a m i L s . Online retailers from Zappos to Newegg to Wal-Mart among others are all doing their part in taking share from eBay. and brand. but certainly Amazon is not the only company causing extensive damage to eBay’s growth process.com and Alibaba. i r o u q e m Items sold were up 3% y/y Active users increased 4% y/y (a small acceleration. In addition.com and EBay Eachnet (eBay’s China Auction Site) decided to announce a joint venture agreement in China. but small in absolute terms) from the Q3 3% y/y gain. EBay. and relentlessly eating away at eBay's market share.com Cost Leadership Strategy Comparison of eBay. Amazon is the largest beneficiary of eBay's decline. methodically. EBay will contribute its Eachnet subsidiary. EBay would have a 49% stake in the company and tom. The two companies would need to build a new China marketplace in 2007 to compete with China’s top auction site rival Taobao. In 2006.com. Tom. while Tom Online will contribute local management expertise. well big percentage-wise.com will have a 51% stake in the joint venture. many of eBay's changes are actually self-inflicting further declines.

EBay Growth Trend Graphs Comparison of eBay. i r o u q e m Page 19 .com Here are some graphs from Jeetil Patel that show the trends in the item sold and active user metrics: o h T BUS451 a m i L s .com and Alibaba.

com. the Brazilian subsidiary of iBazar SA.com and Alibaba. Being user friendly and simple is the way eBay will stay on top of the competition. Over 5 million people have created and joined long-lasting BUS451 Page 20 o h T EBay’s growth strategy has a very extensive and impressive portfolio. users can use eBay on the go through their phones. having the ability of online verification against fraud and counterfeit products makes eBay a number one source for buyers and sellers to stay loyal to the company by having the confidence in the company as they keep up with the industry standards. The relationship enhances MercadoLibre’s leadership position in Brazil and the rest of Latin America. and expands eBay’s reach throughout the region.Comparison of eBay.com Growth Strategy acquisitions and joint ventures over the years with global companies. EBay.com The transaction growth chart shows that while eBay held onto a y/y growth on this metric. as it has gained a m i L s .5% ownership interest in MercadoLibre and will share best practices with the company. Meetup. i r o u q e m .com is a local community organizing network. Also. including innovative products. the trend is definitely decelerating. By having the ability of a mobile application. PDA’s. and laptops.com Differentiation Strategy Some of eBay’s features to their cost leadership and differentiation strategy consist of offering all types of items. It will be interesting to see if this goes negative in Q1 or if eBay can hold the line here. which was recently acquired by eBay in return eBay will receive a 19. MercadoLibre will acquire iBazar Com Ltda. eBay joined forces with MercadoLibre (free market in Spanish) the leading online trading site in Latin America. The ability of M-Commerce is a big plus for the online giant. eBay invested in Meetup. In March of 2006. In 2001.. EBay.

another. Unlike competitor Kiva. In January of 2007 eBay acquired Stubhub.tw. MicroPlace is a social business owned by eBay. utilizing PayPal. Stubhub.3 Million USD. they will only see pages which friends and like-minded stumblers’ have recommended. Under the agreement. and Broadway event tickets. and PCHome Online announced that they have agreed to form a joint venture in Taiwan. Focused on the needs of Taiwan consumers. sport. These groups and clubs have held over 1 million local meetups. In June of 2006 eBay Inc.com is an auction site based in Sweden.com for $48. In April of 2007 eBay acquired Microplace. The first company which was Stumbleupon.com and Alibaba. In April of 2006 eBay acquired Tradera. When users stumble.com that eBay acquired for $75 Million USD on May 1st. StumbleUpon is a website and content discovery service enabled by a browser toolbar. Microplace’s stated mission is to alleviate global poverty by offering investments that enable loans to hardworking poor people. it’s something almost serendipitously BUS451 Page 21 o h T May 2007 was a busy month for eBay.com local Meetup Groups around shared interests and purposes. the website specializes in online auction-style trading and also offers the ability to buy and sell at a fixed price. i r o u q e m . Tradera. It focuses on microfinance loans sent via the internet.com for $310 Million USD.Comparison of eBay. investments are returned to the lendee with interest.com is an online marketplace for concert. More often than not. they acquired three companies and invested in a m i L s .com.com. the companies will leverage eBay's global experience and PCHome Online's local ecommerce expertise to launch a new co-branded website that will bring new online trading opportunities to buyers and sellers in Taiwan under the name of Ruten. StumbleUpon uses positive and negative user ratings to form collaborative opinions on website quality. allowing users to choose specific lending clients and businesses and loan them money over a designated period of time.

Gittigidiyor is a Turkish online marketplace similar to eBay that offers auctions. eBay acquired Gumtree.com.and are the UK’s biggest website for local community classifieds including flat share. Since 2001. Gumtree. Gumtree. Nextag and Google Product Search and search engines such as Google. New Zealand and South Africa . Gittigidiyor has over 1. Auctions began at 5 February 2001. ChannelAdvisor managed over $2.5 million sales have been successfully completed.com on May 19th. or had just arrived in the city. Finally. Poland.com and Alibaba. 3. stores and fixed price listings.1 billion in gross merchandise value (GMV) on behalf of its customers.com. comparison shopping engines such as Shopping. flat rentals and jobs.000 rooms are rented a month through Gumtree. BUS451 Page 22 o h T a m i L s .com interesting to the reader. Ireland. More than 25.Comparison of eBay.com and Overstock. It was founded in 2000 by local entrepreneurs in Turkey and is headquartered in Istanbul.000 new rooms are advertised a month. Shopzilla. Over 15 million personalized recommendations (“stumbles”) are delivered daily. and needed help getting started with accommodation. for the month of May. The same day on May 1st eBay invested in Channeladvisor. employment and meeting new people. Gittigidiyor is Turkey’s leading online marketplace company.7 million in December 2006. i r o u q e m . ChannelAdvisor Corporation provides technology and services that enable online retailers to maximize their profits across multiple e-commerce marketplaces such as eBay.com. 2009. eBay acquired Gittigidiyor.com.000 daily visitors. gone. Amazon. designed to connect people who were either planning to move. The StumbleUpon site says they have nearly 7. Two days later.com was started in March 2000 as a local London classified ads and community site. which in Turkish means going. Yahoo and MSN.com now covers 60 cities across 6 countries .5 million users as of April.5 million registered users and more than 500. Australia.the UK. which means at least 10. going. up from 1. on May 3rd. In 2007.

an online classifieds site that generates more than 120 million page views per month. On May 2nd 2008.com.com and Alibaba.On October 4th 2007. an online vehicle classifieds site that generates 66 million page views per month. eBay acquired Vuvox. eBay acquired Fraud Sciences for $169 Million USD. Den Bla Avis and BilBasen have successfully made the transition to fast-growing. Den Bla Avis and BilBasen have offices in Aarhus and Copenhagen. On September 25th 2008.com is a financial information company specializing in the delivery of global fixed income and capital markets data. eBay acquired Den Bla Avis for $380 Million USD. The flagship product PILOT is a real-time desktop workstation for financial professionals delivered via the Internet. i r o u q e m . They pride themselves on delivering quality content in one easy to use. Vuvox makes technology for presenting rich media in slideshows. with features like inventory management and item listing.] BilBasen are leading classifieds businesses in Denmark and operate dba. Founded as printed classified advertising circulars. Fraud Sciences has been integrated into eBay’s PayPal product to help fight against fraud prevention. It also includes a real-time direct interface to MS-Excel. Pilot’s customizable desktop aggregates the world’s leading sources of capital markets content onto one singular platform for ease of access. flexible. Gmarket. eBay acquired Via Online. The company is based in Krefeld. On January 1st 2008. and bilbasen. and affordable package. merchant solutions they provide are transaction verification with fraud prevention. Via-Online GmbH is an auction management software company.dk. BUS451 Page 23 o h T In October 2008. The company operates web-portal. Denmark. Israel and Palo Alto based Fraud Sciences offers Comparison of eBay. Germany.com automated anti-fraud systems including SpotLight VFX and SpotLight T2T.dk. eBay acquired Gmarket.com. which helps users manage various aspects of the selling process. profitable online businesses while maintaining the publication of its circulars. Den Bla Avis and a m i L s . Afterbuy.

Inc. It is a very good strategic move on the internet giant to invest and acquire numerous companies around the globe. and technology. marketing. i r o u q e m BUS451 Page 24 . a set of credit tools. Bill Me Later. and offers consulting services in the areas of payments. and changed its name to Bill Me Later.com and Alibaba. risk management. provides payment and marketing technology solutions to multichannel retailers. It offers PayCapture. The company was founded in 2000 and is based in Timonium. Inc. Inc. o h T a m i L s . buying every company that will give eBay a threat in the future.com During the same month and year of 2008.com for $945 Million USD. Inc. As of November 7. operates as a subsidiary of eBay Inc. This strategy will only strengthen eBay as a company and brand name for years to come. and Bill Me Later that enables customers to pay for purchases without providing credit card information. The company supports and delivers a suite of web-engineered payment solutions.Comparison of eBay. eBay acquired Billmelater. Inc. 2008. 2007. EBay has certainly taken their growth strategy process to new levels. EBay is in a league of their own and at that moment it seems like no competition can stop them or even compare to the market share that eBay possess. was formerly known as I4 Commerce. Bill Me Later. Maryland. Bill Me Later. in August.

China.com manufacturers connecting them to other companies around the world looking for suppliers. With more than 40 million users and 5 million virtual storefronts. C2C. online advertising. Japan. It connects companies with suppliers and manufacturers throughout the world. The mission/vision statement of the company can be defined as. Alibaba is also the flagship company of the Alibaba Group. By creating the connection for business. software service. CSR should be born from business model. i r o u q e m BUS451 Page 25 . which are involved in the business of B2B. CSR isn’t a burden. Korea. etc. Every corporation can find a point to combine itself with CSR. and consumption community. o h T a m i L s . Alibaba specializes in trade between buyers and sellers.Alibaba is a B2B e-commerce company founded in 1999 by Ma Yun. Alibaba’s primary business is to serve as a directory of Chinese ALIBABA. Alibaba was founded in Hangzhou. Alibaba also offers business management software solutions to small businesses across China using the "Alisoft" brand. Alibaba has been able to climb to the top as one of the most useful online ecommerce businesses. Alibaba is committed to building the world's leading e-commerce infrastructure and high quality online living platform. corporation’s can realize sustainable development. Only by this.COM INTRODUCTION Comparison of eBay. local living. Its primary business is to serve the Chinese market with a directory of the Chinese manufacturers. Alibaba Group (Alibaba for short) is a global e-commerce leader basing in China.com and Alibaba.com has offices in more than 50 cities across Greater China. Alibaba has 7 subsidiary companies. Europe and the United States. online payments. Alibaba. Everyone should assume social responsibility and can assume social responsibility in the convenient network environment. search engine.

276 million registered users.6 million) in the fiscal year ended December 2008.alibaba.com. The company recorded revenues of CNY 3.9 million) in fiscal 2008.8 million were from the Chinese trade market. the first is an international marketplace in English personalized to global importers and exporters in China. in order to make trading easier for foreigners. which add up to be an increase of 27% since the previous year. after Google’s $1. Although Alibaba started out as an independent company.com While holding the Chinese market as its first customer base. Italian. By the end of 2008.com.Comparison of eBay.001.2% over 2007.48 million were from the international trade market and 35.8% over 2007. Since September 2009. The IPO will value Alibaba. Alibaba operates in two different marketplaces.com at up to $7. an increase of 24. the second is a Chinese marketplace that focuses on suppliers and buyers trading domestically in China. Alibaba plans to raise $1.4 million (approximately $171.com.5 billion in the next year. an increase of 38.8 billion. and german.alibaba. Yahoo currently holds a 40% share holder in the parent Alibaba Group.com.192.com.alibaba. 10. an increase of 48.2 million (approximately $432. Portugese.205.alibaba. Of these users. Alibaba launched business to business sites in six foreign language versions. Alibaba also works internationally throughout the world. The company's operating profit was CNY 1. i r o u q e m BUS451 Page 26 . german. The International sites for Alibaba consist of: Spanish.5% over 2007. Russian. Alibaba.9 billion offering in 2004.7 million) in fiscal 2008.alibaba. It also reaches buyers and sellers in more than 240 countries around the world. Its net profit was CNY 1. o h T a m i L s .2 million (approximately $173. making it the secondbiggest Internet IPO ever.com and Alibaba.alibaba.com.com had gained 45.

with Softbank to take over the operation of the Japanese marketplace. Formed an associated company. Re-launched our upgraded Alibaba Japan marketplace.COM Alibaba Group was established Launched the Gold Supplier membership to serve exporters in China. Launched an SME financing scheme in collaboration with leading banks in China. a m i L s . 2005 2007 Launched keyword ranking services on the China marketplace.com and Alibaba. Launched the TrustPass membership to serve SMEs engaging in domestic China trade. Launched keyword ranking services in the international marketplace. Comparison of eBay. 2007 Launched premium placement display in the Chinese marketplace.com 2003 Launched TradeManager Instant Messenger software for easy communication. Launched branded advertisements in the Chinese marketplace. Alibaba Japan. Became a constituent stock of Hang Seng Composite Index Series and Hang Seng Freefloat Index Series. 2008 o h T Successfully listed on the Hong Kong Stock Exchange. i r o u q e m BUS451 Page 27 . Launched the International TrustPass membership to serve exporters outside China. Launched Winport to help SMEs build their own presence in the China marketplace. Introduced the Gold Supplier membership to Hong Kong.1999 2000 2001 2002 HISTORY OF ALIBABA. Launched the China TrustPass for Individuals membership to serve entrepreneurs engaging in domestic China trade. 2004 Established Ali-Institute to offer customer training and higher-education e-commerce certification in China.

com Introduced the Gold Supplier membership to Taiwan. on the international marketplace. Launched the Export-to-China service to help SMEs sell direct to China.com and Alibaba. a pay-for-performance based keyword bidding system Launched Gold Supplier International Edition Upgraded Ali-Institute to be a new business unit to better cultivate e-commerce talent for SMEs." Acquired controlling stake in HiChina to enhance our ability to provide additional Internet infrastructure services to Chinese small businesses o h T BUS451 a m i L s . Launched the Gold Supplier Starter Pack. Acquired the Business Management Software division of Alisoft to further the goal of transforming from "Meet at Alibaba" to "Work at Alibaba. 2009 Launched Ali-Advance. i r o u q e m Page 28 .Comparison of eBay.

ALIBABA.com and Alibaba. but a very different mix of items and brands. i r o u q e m Printing and Publishing Rubber and Plastic Security and Protection Service Equipment Textiles and Leather Products Page 29 BUS451 .com Alibaba like eBay does not carry specific products. Some of the products the offer include everything from Agriculture to Transportation items. • • • • • • • • • • • • • Agriculture Apparel Automotive Chemicals o h T Environment Luggage Energy Lights and lighting a m i L s . SERVICES.COM PRODUCTS. AND KEY BRANDS Comparison of eBay.

COM LAST THREE YEAR FINANCIAL GRAPHS Comparison of eBay.205.60 ¥967.com 2008 Year Income ¥4.000.500.20 Revenue (Millions of CNY Yuan) Gross Profit (Millions of CNY Yuan) Net Income (Millions of CNY Yuan) Fiscal Year Ending 2008 2006 Year Income ¥1.000.00 ¥- ¥3.20 ¥2.com and Alibaba.613.20 a m Revenue (Millions of CNY Yuan) i L s .90 ¥1.7M 2007 Year Income ¥2.000.00 ¥2.500.00 ¥500.000.00 ¥1.80 ¥2.000. USD: $432.882.500.00 ¥1.80 e m Revenue (Millions of CNY Yuan) Gross Profit (Millions of CNY Yuan) Net Income (Millions of CNY Yuan) Fiscal Year Ending 2008 Stock price as of 12/15: $18.6M Gross: USD: $171.00 ¥3.00 ¥1.00 ¥2.001.000.ALIBABA.162.9M Net: USD: $173. i r o u q ¥1.00 ¥500.80 ¥1.00 ¥- o h T ¥1.363.00 ¥1.90 Gross Profit (Millions of CNY Yuan) Net Income (Millions of CNY Yuan) Fiscal Year Ending 2008 BUS451 Page 30 .000.126.12 ¥219.00 ¥Rev.

COM CORE STRATEGIES Comparison of eBay. The company believes that given the weak state of the economic environment that Allibaba.Alibaba Group is formerly the world’s leading business-to-business e-commerce company.000 employees and the launching of a new service center in northern China.com will increase its revenue by 13 % billion Yuan this year. Despite the present economic crisis in the world’s economy. o h T a m i L s . Alibaba. It was started only 9 years ago. i r o u q e m BUS451 Page 31 . This strategy included spending on a global marketing drive worth at least $30US million. It’s backed by 8 of China’s largest banks because it really is developing the economy of china by reviving entrepreneurial spirit. The recent focus has been to increase the growth of B2B and B2C business. Alibaba has positioned itself to overcome that obstacle and move forward to declare an even bigger market share. the hiring of 30. China is one of the few areas that survived the crisis remaining as one of the largest consumer markets after the economic turn.com and Alibaba. and expand our market leadership and investment for growth”.com aggressive expansion is underway to keep the company ahead. It aims to help small and medium –sized companies conduct trade. .com CEO David Wei Zhe said the global economic crisis provided “a great opportunity to help more small and medium-sized enterprises move online. This is why the company maintains major operations in China because of its economic safeguards. An ALIBABA. and so growth strategies are expected to be a main strategy of the company so that it can continue to effectively compete with world leaders in the industry.

Yahoo China removed the three original departments: new media. This was expected to have a large impact and allow the companies to integrate and join forces with their combined resources that will with time lead to growth.com Growth Strategy Comparison of eBay. i r o u q e m BUS451 Page 32 .com and Alibaba. In December 2007. A restructuring strategy of Yahoo China began after Yahoo failed to generate profits. This together with other international alliances has helped to elevate this company into the Global marketplace. To show how committed the company was to broaden its boarders.Alibaba. network search and communications departments. it announced a joint venture with Japan’s Softbank Corp.com One of its recent strategic moves was the acquisition of Yahoo China. o h T Alibaba is very focused on expanding overseas Mr. chief executive at the company. about 4% of its 400. E-business search technology will also be a main focus because the company believes that developing this technology will lead to greater profits. Restructuring of Yahoo is a step in the right direction.000 users Alibaba have chosen to look more outwardly to Chinese markets.” At present. The company realizes that for optimal results changes within the company has to take place. Wei. This strategy is extremely focused because Alibaba realizes that the acquisition of Yahoo represents an overwhelming opportunity to grow and gain a larger market share because Yahoo is such a recognized company. because according to Wei “more suppliers outside China will look for new markets like China. In turn two new departments: website operating and mailbox departments. a m i L s . Merging of network search and ebusiness and digging into the potential of network search will be the future direction for development within Yahoo! China. continued to explain that his strategic move is to attract more clients in markets including India and Japan.

Furthermore. the company uses its strengths. i r o u q e m . “We believe if we increase our customers. They launched a starter package for Gold Suppliers which offers fewer services for a 60% discount.” This strategy is more of a long-term one that illustrates that the company understands that creating a loyal BUS451 Page 33 o h T Alibaba is constantly working on ways to make business easier for its members. the company can fairly be referred to as a giant global trade market because the company is one of the most active in B2B marketplaces. Europe and South America.com David Wei says that the program is interested in increasing website’s customers even at a risk of set backing its profit margins. western operational techniques and international capital invested in the global market reflect the power that this company manages to maintain in the industry. Its main goal is to make conducting business easier for small businesses around the world which makes sure that each business capitalizes on all the advantages of having an international business. Alibaba understands change and the ever evolving of the external environment in which it competes and thanks to environmental studies and expectation studies the company is well aware of these changes. He stated in an interview. This strategy allows the company to be more flexible and efficient. recently unveiled a new pricing model to draw more members. The company’s leaders have shown that they know how to seize market opportunities and to expand its strategy to the small and medium sized enterprises (SME) economic growth throughout Asia. In order to achieve this.com Another of Alibaba’s main strategies involves capitalizing on its international consumer base and driving a large successful marketplace between businesses.com and Alibaba. Alibaba operating as an Asian company wants to still be known as an inter-cultural organization that has an inter-cultural management team and thus focus.Comparison of eBay. we will increase our revenue later and the process will take care of itself. USA. The combination of Eastern wisdom. Today. It a m i L s . Alibaba.

This is something that the company has capitalized on in the most unique way. access to Alibaba’s portals is mostly free of charge.com is presently the world leader in business to business e-commerce. i r o u q e m .” Most companies in China are these small businesses and Alibaba has put itself in the position to take advantage of this. total sales were higher than what the company usually receives in a month. Most companies exporting in China are not big companies. The country has virtually no printed directories or electronic databases that allow companies to describe their products and help buyers and sellers find one another while still providing a certain level of comfort that these companies are on the up and up. a marketing professor at New York University’s stern school of Business.com customer/supplier base is what’s most important because loyal suppliers will eventually raise profits from the raised sales revenue.com has successfully recognized that it could fill a gaping market need that China has. Alibaba. Citigroup says it expects the company to decline in 2009. BUS451 Page 34 o h T a m i L s .com and Alibaba. According to Yuxin Chen. To continue to provide for this market of small businesses. “Alibaba’s major advantage is that it is located in a country that has emerged as the manufacturing base of the world.” Alibaba. so for these companies Alibaba provides a platform. Alibaba. but 2010 should be a rebounding year because” it should benefit from a more sustainable model.Comparison of eBay. Alibaba.com focuses on small family type businesses in China of which are many in number. signs pointed to a positive result in the first period under the new pricing model. It focuses on buying and selling among small and midsized organizations.com Differentiation Strategy It has already been noted that Alibaba.com targets small to medium sized businesses. delivering a faster growth and higher margins. When this first strategy was introduced. and it has more than five million suppliers. Analysts seem to like the new pricing model.

businesses can launch marketing activities to potential buyers in a economical way. the business buyers and supplier who want to find potential trading partners via e-commerce marketplaces have available to them certain membership packages to appeal to the most varied amount of businesses. Alibaba. Gold suppliers also have more of an advantage with global trade because of the certification Alibaba has provided showing that this organization is authenticated. In terms of the price ( membership fees) paid by B2B clients .com and Alibaba. listing fees and secondarily through advertising avenues. This means much more access to customers than the business man who doesn’t have a paid membership.Comparison of eBay. The marketplaces provide many advantages to businesses. and additionally the convenience which is real time and 24 hours services for both the buyers and the sellers. One specific pricing strategy that Alibaba has put in place is the Gold supplier premium membership. Testimonials from gold suppliers speak BUS451 Page 35 o h T a m i L s . businesses can get access to the active global buyer community and vice versa for buyers. i r o u q e m .com Price strategy Alibaba’s primary revenue is derived from charging customers for value-added services and from subscription fees. Fee-paying members can enjoy “priority placement of supplier storefront”.com Membership fees are charged ranging from $300-$8000 and various membership programs is offered which provide different membership opportunities. Alibaba. buyers can get access to high quality and organizational information on products.com promises price savings that can’t be found through more traditional forms of business. potential sellers. This is a certification that the site offers to specific supplier companies which gives them the opportunity to post an unlimited number of products online.com marketplaces. priority listings in the industry directory and advanced search results at Alibaba.

The realm of possibility is great which makes global trade a possibility for small companies who wouldn’t have this opportunity otherwise. i r o u q e m Page 36 . The gold supplier tag is more prominent still.com and Alibaba. Many spin off’s of the gold supplier membership have provided other services and benefits at lower cost to the customer but with fewer benefits. is a small cost to pay for the services that are available as a registered member.Comparison of eBay. o h T BUS451 a m i L s . Customers believe that the price for the membership.com to the effectiveness of this pricing strategy. Customers are jumping at the opportunity to sign up to be a Gold supplier which gives Alibaba the upper hand and the opportunity to create revenue. which varies.

new entrants could cause external difficulties for this company. this company is concentrated on limiting new entrants into the market because a m i L s . Of course. and it credits fierce competition for helping it to have developed this much. They are also hopeful that the new wave of companies to come will further grow the company from then on. of its goals as a company is build the consumer market in Asia and subsequently in the world.com and Alibaba. but with competition comes the success of being the people’s premier site to deal business.environment: COMPETITIVE FORCES FOR ALIBABA.com Threats of new Entrants Alibaba has always welcomed the idea of competing companies entering the industry. A spokesperson of Alibaba stated this in reference to the news that Chinese search engine firm Baidu.” The consumer ecommerce penetration rate in China is 33% compared to over 90% in developed economies such as the US and Europe. Christina Splinder continued to say that “competition would help grow the entire ecommerce market in China.com is beginning beta testing for an ecommerce site.COM Comparison of eBay. Alibaba has developed quite the reputation for new innovation and its Global influence. o h T Evidently.com Porter’s Five Force model of competition is a key tool for diagnosing the competitive Alibaba. Early competition from eBay is what Alibaba credits for growing the ecommerce industry in China from several hundred million RMB back in 2003 to over 100 billion RMB this year. i r o u q e m BUS451 Page 37 .

buyers can deposit money into a bank account designated by Alibaba Taobao. The sellers receive payment when the deal is verified by buyers. EBay. One of Alibaba’s rivals is eBay Eachnet. AliPay is the payment tool that Taobao. o h T a m i L s . With this AliPay.com The auction ecommerce industry is quite the growing one. Alibaba’s subsidiary uses for business –tobusiness e-commerce website. EBay plans to invest heavily to make sure that it has available a secure system for payment on their site. gained success in the Chinese market quite rapidly but. just like Alibaba.Alibaba. Alibaba has a larger hold on the Chinese market because of its global reach and innovative systems. Both Alibaba and eBay Eachnet operate in the Chinese e-commerce industry. In recent years. EBay Eachnet the fierce competitor it is also announced that it would spend more than 100 million Yuan (Us$12 million) to launch a new online payment system as well.com and Alibaba. Alibaba acquired Yahoo! China as well as other subsidiaries to help grow its company and develop it into the company it is today. EBay Eachnet launched a payment system called Escrow in October very similar to AliPay which was set up to create a more secure online payment environment for members. i r o u q e m BUS451 Page 38 . it has become very concentrated with equally large global companies which have been able to develop core competencies in the industry. so it is understandable that these are close competitors. EBay is a global giant in ecommerce and it has the advantage of owning a recognizable brand that had global attention and had a loyal customer base in the US.com Rivalry Comparison of eBay.

and Para-legal support for contractual purposes. These suppliers are a key to Alibaba’s credibility and quality management efforts. i r o u q e m BUS451 Page 39 .Alibaba. The American International Underwriters China (China’s AIU) provides quality commercial and consumer insurance to the company. Just like if the insurance company doesn’t want to be affiliated with Alibaba anymore. Ecommerce organizations have to have safeguards available for its consumers and companies especially when large transactions are taking place. Each of these supplier companies help to make sure that the consumer is protected.com Alibaba has many alliances with companies that keeps the auction site running and on the cutting edge of technology in the external environment. pre-L/C beneficiary screening.com and Alibaba. This helps companies and consumers all over the world communicate and deal commerce. o h T a m i L s . These organizations have a certain level of power because if A&V decides to not partner with the company another company would have to be sought out to fill the need but it can be done.com Supplier power Comparison of eBay. VeriSign Inc is a well known provider of Internet infrastructure for Networked worlds. The A&V is a product designed and launched by Asian Company Profiles Ltd. It is an application conduct B2B partner screening. it is at that’s company’s own detriment because Alibaba is a growing company that has a reputation of having a large member based which means large insurance dollars for the insurance company.

Alibaba. so buyer with the power that they have would be wiser to choose Alibaba as it is the world leader and the opportunity for growth is great.com These are the core of the organization as an auction site.Alibaba.com Threat of substitutes though ecommerce. i r o u q e m BUS451 Page 40 . there are other competitors. Alibaba is a global company and so businesses from different areas of the world are a key to its success. and they give these owners power to expand and really make their products available to a global customer base quite easily. Alibaba offers small businesses the opportunity to grow through its site. This Alibaba Company is a growing one and already has a large global marketplace the largest B2B one in the world. Yes.com Buyer Power Comparison of eBay. The success of the company is dependent on the customers who are willing to buy online products. more effective way of conducting business on a global arena. Right now online auction is the simplest and most effective ways to grow a small or medium sized business. It’s simple and offers a large global marketplace for transactions to take place.com and Alibaba. No new substitute for the online auction industry has been introduced yet. Any substitute to come along would have to be an easier. but Alibaba has established a loyal customer base and as a global leader in ecommerce it seems like it’s a secure professional site. but the opportunity is there. o h T Alibaba offers one of the easiest ways to conduct a small-medium business and that’s a m i L s .

Development of a more competitive technology a m • • i L s SO Strategies Acquisition of an American company in the internet industry could develop recognition in the US. Page 41 Enforce differentiation strategies using the company’s influence in the marketplace to draw new members from innovation and quality controls. . the world’s largest ecommerce organization. e m WO Strategies Acquisition of a technology company experienced in developing ecommerce sites.com. • • • Possibility for growth in profits. • • low.com and Alibaba. BUS451 . EBay’s new subsidiary eBay Eachnet poses a competitive influence.W organizational structure A bold risk taking sprit.Alibaba. Weaknesses . A international • • • Labor intensive. • • • A strong whole in the Global Marketplace. ST – Strategies WT – Strategies Advertising more in international arenas to strengthen market share in areas of little brand recognition. Opportunities – O Comparison of eBay. Low degree of business e-commerce search technology. is one that generates income from influencing business to buy and sell through their site. i r o u q influence.com TOWS Matrix Alibaba. • • Large Chinese cultural Brand recognition is Profitably is slowing. • • • • • o h T in the US Market share possibility Threats – T China’s Google and the strength of the vertical sites. Global Economic crisis.com Strengths – S • It has a reputation of success and effective growth strategies • Strong alliances and partnerships with leaders in the industry. Large untapped market potential. The sponsoring of international events like the Olympics can help to establish the brand among the other global competitors. Growth of China’s ecommerce industry.

Alibaba. Alibaba.com has much strength. Alibaba also used a great strategy of developing great acquisitions with other leaders in the industry such as Yahoo China. which is one of the largest economies in the world. Although the organization is known as a Global one it is still not well known in the US.com Strengths Comparison of eBay. From my research. Other businesses in the market have more complex and attractive ecommerce sites. It has grown quite rapidly and many great strategies were implemented to facilitate development.com Alibaba. i r o u q e m . More cost strategies need to be implemented to decrease the expenses within the company. This company that operates most of its activities online should be able to limit labor expenses a bit more. Profitability is a definitely a problem for the company. The leaders of the company have shown how committed it is to being a global organization and has a staff and management team just as diverse as its customers. This is always a great thing because the larger the market the larger the profit opportunity. and this is really a detriment to the company. Efforts could be made to develop the brand more by increased advertising efforts and tapping into untapped markets. BUS451 Page 42 o h T a m i L s . it was mentioned repeatedly that this company is a global one that has reach in several large countries in the world. Acquisitions put companies in the position to grow quite rapidly and are generally a great mode for entry in a new untapped market. The company is also very labor intensive. A global reach will only profit an organization especially with a growth strategy. The ecommerce market in China is growing and Yahoo being a global company with influence puts Alibaba is the position to control a large percentage of a Chinese market.com Weaknesses The main weakness that this organization has is its low level of technology.com and Alibaba. It has 4000 employees all of whom are well paid which means a large amount of expenses paid in salaries.

Alibaba. The company isn’t as well known in America.com and Alibaba. Alibaba. so there is an opportunity for growth in this economy where so many other large ecommerce organizations exist.com There is a great possibility for growth within the organization. Alibaba has risen above the Global economic crisis but this remains a threat. but this industry will get more competitive and just like Alibaba grew rapidly another company can enter the market and decrease Alibaba’s market share. The Asian web search/ ecommerce is growing quite rapidly through the penetration by other new companies into the market.com SO Strategy One strategy to get market share in the US by using it global power is to acquire a US recognized company. So far. Google is a very diverse company and so it has many vertical affiliations that are competitive forces for the business that Alibaba runs. This could be very effective entry mode into this economy. It really isn’t BUS451 Page 43 o h T a m i L s . Google China is a becoming quite a competitive force in the industry. Wei has been quoted as saying that he welcomes competition on any scale because competition makes other competitors work harder to improve business and its through competitive market that that industry will see growth. Alibaba. Yes it is the largest ecommerce organization in the world.com Opportunities Comparison of eBay.com Threats The main threats that exist in Alibaba’s external environment is competition from highly competitive company’s CEO. Also EBay Eachnet is a competitive rival and recently has been developing Alibaba’s similar operations as to steal market share from the company. i r o u q e m .

com important if it’s another ecommerce company. Also. Alibaba.com ST Strategy In order to combat competition and to take advantage of the company’s influence in the Global marketplace. this is a growth opportunity for the company as well. they could acquire a small technology company. Alibaba.Comparison of eBay. the company would just have to be US based and have high brand loyalty. technically.com o h T In order to improve brand recognition in the US and strengthen market share the a m i L s . It’s something worth developing especially if being a global company is an important outlook as is the case with Alibaba. A good marketing strategy can be a real turning point for a company and increase profits dramatically. Alibaba could implement differentiation strategies that set them apart from the other global companies in the industry.com WO Strategy In order to improve on the weakness of low technology level and take advantage of the opportunity for growth. A company with experienced staff who are capable of upgrading technology can help to move the company into a more competitive place. Alibaba. Differentiation strategies are extremely effective in developing customer loyalty and grabbing a large market share for growing companies. The growth possibilities are great as well. Gaining resources and information from another successful company can grow a company dramatically. There is a lot of advantages to doing this.com and Alibaba.com WT Strategy company should develop a real commitment to marketing on a Global scale quite like Coca Cola. i r o u q e m BUS451 Page 44 .

these companies have dominated the auction site industry and seen extreme growth levels after only being in the industry for approximately 10 years. Together. EBay considers itself as the company to lead the industry with the introduction of such auction sites. Alibaba entered the market by acquiring the market leader at the time eBay Eachnet.Putting it simply. i r o u q e m . Both companies have a similar mission and that is to promote global trade and make trading easier. They are extremely confident in their competitive advantages. Both companies have their portion of competitors and essentially are each other’s competition. The product lines for both companies are quite similar. communication services. as both companies sell goods and services. eBay and Alibaba. host and buyer. and advertising. Electronic transactions involve the transfer of ownership from the seller to the buyer of that good COMPARITIVE ANALYSIS Comparison of eBay.com or service. but Alibaba thinks it has propelled past the competition because it manages to capitalize on the strategies instituted by EBay Eachnet to a develop a global outlook. are world leaders in the auction ecommerce industry. eBay started as a virtual monopoly in the American market introducing a new large scale way to conduct business. Alibaba focuses more on the business to business sales which can be argued is a more revenue generating route. These two companies. These companies had quite different beginnings.com and Alibaba. EBay operates out of the United States and Alibaba operates out of the People’s Republic of China. e-commerce is a form of business where an online transaction takes place via the internet through a site that links a computer system of the vendor. Both of these companies sky rocketed to success really early with very little competition to affect rapid growth. Alibaba took a hold of the business to BUS451 Page 45 o h T a m i L s .

and so markets to the average consumer and businesses. EBay Eachnet. The company has almost double the a m i L s . but Alibaba has the way in which they will go by doing this clearly outlined with effective ways of entry. EBay’s goals are far reaching and not as concentrated. we as a group think that eBay is the better of the two companies. For this reason. Evidently. 1) an entry into new global markets. was the smartest move they could have made towards growth.com and Alibaba. global acquisitions and aspirations will enable companies to be financial sound.com business segment of the market and took it to another level. eBay has Alibaba beat. Both companies made smart moves in the acquisition of well noted international companies like eBay did with Swedish company. and this company has shown us that smart moves. EBay’s marketing efforts are quite great and recommendable in areas that Alibaba lack. The move. Tradera. Group Investment Perspective revenue that Alibaba had in 2008 at $8. and 2) give them the upper hand against threats of competition. We expect Alibaba to continue to compete because this company is nothing sort of impressive. This is now Alibaba’s niche market of suppliers. Alibaba is a world leader in business to business e-commerce and this was its route to the world and globalization. i r o u q e m . whereby it purchased its own fierce competition. Alibaba has managed to elevate and inspire entrepreneurial spirit BUS451 Page 46 o h T Based on the financials. they have competitors like Amazon which features a rather complex e-commerce environment.Comparison of eBay. both of these companies are smart in their moves to acquire companies that will give them.541.com. EBay however has no real supplier preference. Thus. The main goal of business is to make sustainable income.126. The business model of Alibaba compared to EBay is far more simplified yet focused on achieving particular goals. Both companies seek growth.

We learned what drives these companies technically. It was a tall order to organize a project of this magnitude with our many different schedules and personalities. Deadlines were mostly met (at least by the remaining members).com around the world and make business easier for people that otherwise wouldn’t have the opportunity. we never underestimated the enormity of the task set before us. We gritted our teeth because of the added work. we learned a lot about working in groups and how to compromise to see that all our expectations were met within the timeframe allotted. we couldn’t even agree on the two companies to research we went back and forth between entertainment companies. Group Challenges As a group. BUS451 Page 47 o h T a m i L s . we completed it. to our group. of the quarter we had originally four members: Anca. Choosing these particular companies was definitely a learning experience for most of us. EBay just seems. Early on. Compromise and allowing everyone to vote was important when deciding things. Originally. (our presumption) communication with angelica was cut off. Due to illness. Thomas. airline manufacturers and the online auction companies. so figuring out how to work as a group was definitely a challenge. At the beginning. and so many emails were transferred between the original four group members. we set goals and deadlines for when the work was suppose to be ready etc. to have the best tools for growth in their possession and we think it’s almost impossible to compare two equally very powerful global giants in this rather small industry. In all. Angelica and Danauda.Comparison of eBay. further goals were made until the completion of the project. We had to make a fast decision fast and split the responsibilities between the remaining members. Mostly we were working with three different leadership styles.com and Alibaba. i r o u q e m . but thankfully. and afterward. We knew it would have to be communication that led to success of this project.

com COMPARISON OF EBAY. Berkeley College. i r o u q e m BUS451 Page 48 .com/downloads/eBay/765967544x0x281367/1b773a7c-8c1445b8-915a-1716ca37dda0/eBay_2008AR. Web.com. Web log post.COM WORKS CITED PREPARED FOR BUS451 "Alibaba Company Profile. The Free Tech Company Database. <http://http://galenet. <http://compassblogger. Web." Business Source Premier. <http://www. 26 Nov. Investor." File.berkeleycollege.berkeley.ebay.com. o h T a m i L s .org/servlet/BCRC?vrsn=un known&locID=nysl_me_berk&srchtp=glbc&cc=1&c=1&mode=c&ste=60&tab=1&tbst= tsCM&ccmp=eBay+Inc. Alibaba.&mst=EBay%2C+Inc. 19 Aug.crunchbase.blogspot.pdf>.com. Web. Web. 2009.galegroup.shareholder.com." Review.com and Alibaba. 2009.COM & ALIBABA.edu/webapps/portal/frameset. 19 Feb.com/company/alibaba>.ezproxy. "Alibaba obvious weakness Netsun carry low memeber price breakdown B2B Market. "Alibaba. Web. Compass Blog.shareholder.&docNum=DC441427&bConts=3&final Auth=true>.com Limited.com/2008/08/alibaba-obvious-weakness-netsun-carry." CrunchBase. 2008. "EBay Inc.jsp?tab_id=_18_1>." Business& Company Resource Center. <https://my.Comparison of eBay.library. "EBay annual report.html>. <http://files.

com and Alibaba. Web. "EBay Inc. 09 Dec.ebscohost.org/pqdweb?index=0&did=168 214571&SrchMode=1&sid=2&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VNa me=PQD&TS=1257437448&clientId=11195>.COM & ALIBABA. 01 Dec. <http://http://web. BUS451 Page 49 ." EBay .eBay.com.com "EBay Inc.Seeking Alpha. <http://http://proquest. 12 Dec. Investing Ideas -. 24 July 2006.org/ehost/detail?vid=5&hid=5 &sid=4433627e-29ed-47fe-b3c5- a33c3f4bac0a%40sessionmgr10&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bu h&authdb=dmhco&AN=FCDBE4F6-2C00-4977-BF8F-1865C7FD2F86>. Proquest.New & used electronics. 2009. 2009. i r o u q e m ebay-eachnet-vs-yahoo-taobao>. 2009.ezproxy. sporting goods & more at low prices.WORKS CITED: CONTINUED COMPARISON OF EBAY.com. <http://seekingalpha.library.COM PREPARED FOR BUS451 Comparison of eBay. 2009.com. Opinion & Analysis." Stock Market News. a m i L s .Seeking Alpha.ezproxy.berkeley. "Online Auction Market in China: eBay/EachNet vs." Hoovers. <http://pages. Web.umi. cars. 1 Dec. Berkeley College.com/abouteBay/thecompany/companyoverview. Yahoo!/TaoBao -. apparel.com/article/14162-online-auction-market-in-china- o h T collectibles." Datamonitor Company Profiles Authority.library. Web.berkeley. "EBay: The World's Online Marketplace. Web.html>.