NHÓM 1

Thành viên:
Trương Thanh Thảo (nhóm trưởng).
Nguyễn Thị Thanh Nhi.
Ngô Phụng Cầm
Cao Thị Bích Ngọc.
Trần Thị Kim Ngân.
CASE STUDY: EBAY

Question 1: Why has eBay succeeded as an online auction marketplace while so many
others have failed?

Firstly, eBay created a site which pleased both buyers and sellers, a win-win
model for businesses and consumers. I mean, eBay is useful for buyers who want to
compare prices among distributors. Additionally, eBay helps businesses reach out to
more new potential customers in the market.

Second, eBay did not position itself as a website for selling like others, because I
believe that at the time, e- commerce was not as popular as it is now. Instead, eBay
established itself as a pioneer of the E- commerce model, where people can find a
reasonable price for any type of product (which was fit the demand of consumers - since
they was confused about the pricing strategy of businesses).

Third, the marketplace provides a fee structure that is advantageous to the

corporation. It helps to attract high-volume sellers, who obviously sell more than small
consumers and contribute to eBay's success by encouraging more sellers and buyers to
join.

Fourth, because of the site's efficiency and wide reach, eBay's success has truly
created a pricing revolution by allowing buyers to determine what they would pay for an
item; the result pleases both sides because customers gain control and receive the best
possible price, while sellers make good margins. Through its Voice of the Customer
program, eBay's millions of ardent users have a say in all major decisions made by the
company.

Finally, any steps of eBay's development correspond with social innovation and
social trend change (acquiring with Paypal for no cash transaction; becoming more green;
diverse in many fields, v.v.), which is also a factor in eBay's continued existence.
Question 2: Evaluate eBay’s fee structure. Is it optimal or could it be improved? Why?
How?

Ebay doesn’t sell or buy anything itself. Due to eBay's pricing structure, which
includes insertion and final value fees, customers may pay less if they sell more, and vice
versa. This pricing structure was designed to encourage bulk sellers who can assist the
company in succeeding by increasing sales and discouraging customers from listing only
a few low-cost products. When eBay charges lower fees to buyers who buy in larger
quantities, this is referred to as second-degree pricing discrimination. This pricing
strategy is effective for attracting higher-volume customers.

However, there are some disadvantages to such a pricing system. One of the most
important is that it has the potential to deter small consumers by drastically reducing their
revenue and profits. Smaller customers sell less than bulk sellers, but they still account
for a significant portion of eBay traffic, and their needs must be met. If this is not the
case, they may seek competitors or simply sell less than they can. Furthermore, such a
pricing system may be perplexing to many visitors. However, when the organization's
profit from the current price structure is considered, particularly from the bulk seller, the
risk of losing small customers becomes less significant. As a result, I think eBay's fee
structure is optimal.

Question 3: What's next for eBay? How does it continue to grow when it needs both
buyers and sellers? Where will this growth come from?

If eBay wants to attract more buyers and sellers, it should expand into new
markets. If they do not expand the market, they can still attract new buyers and sellers,
but the number of sellers and buyers will be small or non-existent. And I believe they
should consider expanding into developing countries. People in these countries will be in
high demand to buy and sell at a good price. As they expand into new countries, they
may face a number of challenges, but this can help eBay gain more users.

In addition to expanding in different countries, they should also expand in

language, which will reduce the language barrier for users and will help the company
quickly reach out to the population.

EBay can develop and invest in mobile applications. The use of mobile
applications will help users easily find what they want, in addition, they can also know
where they can buy, or whether the seller is close to them.

Advertising is also a good way for them to attract customers. They can advertise
on TV and the media, social networks.