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is the largest and most popular marketplace on the Internet, allowing members to buy and sell almost anything. Launched in 1995, about 147 million people now use eBay. An estimated 430,000 people in the United States make all or most of their living by selling on eBay. EBay’s online payment service, called PayPal, enables transactions nearly anywhere in the world. EBay proclaims “trust” between buyers and sellers as the key to the success of the marketplace. EBay is the “The world’s Online Marketplace”, which is its positioning statement, and it means many things about the company’s identity. It enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses. eBay offers an online platform where millions of items are traded each day. The objective at eBay was to “to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of even Amazon.com, making it the “world’s most valuable Internet retailer”. Pierre Omidyar, founder, is focused to achieve excellence in strategic management for improving the company’s strategy, sustaining the company’s growth and business performance, and potentially expanding from online auctions into general “retailing”, and to become “the world’s largest online mall”. This research paper intends to study the click and click business model of eBay, whose competitive advantage lies in its pure play strategy, a breakthrough from the traditional brick and mortar model, which leads to sustainable growth and a competitive edge over the other retailers.
Introduction: eBay establishes itself as the “The world’s Online Marketplace” .Coincidently, it is also the positioning statement of eBay, which itself means many things about the company’s identity, it enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses, Bay offers an online platform where millions of items are traded each day. According to company lore, the idea for eBay came from founder Pierre Omidyar’s wife, who wanted to trade Pez dispensers with other collectors over the Internet. In
making it the world’s most valuable Internet retailer. lies on the idea that practically anything that can be bought and sold can be facilitated through this Internet retailer. Omidyar launched eBay from his home in mid1995. “We help people trade practically anything on earth and conduct commerce through the Internet on a global basis” is certainly eBay’s business model . the stock was trading approximately b$282 per share. Corporate strategy The whole foundation of eBay. eBay was getting a few thousand hits daily. Today eBay users can bid anything from office equipments to real estate to cars. but others have failed?” Though many of its successes resulted from its adaptive approach. The objective at ebay was to develop the work ethics and culture of eBay as a fun.This model was so effective and efficient in conducting transactions that more and more people preferred to trade online. It is surprisingly true but perplexing that “Why has eBay prevailed.theconcept of an Internet marketplace caught on so quickly that by the end of the year. By early march 1999. and this auction platform provider was implementing the concept of e-commerce even more forcefully. He says that he had been thinking about how to create an efficient marketplace-a level playing field. Ebay went public in September 1998 at $18 a share. where everyone had access to the same information and could compete on the same terms as anyone else. Even more impressive the website was profitable from its inception.com. so that they can enjoy the comfort at home or work-places and still buy things online just by the click of the mouse.” After writing the code for the site. open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of evenAmazon.truth Omidyar had been pondering an Internet auction venture before he was ever aware of Pez mania. An analysis into . eBay’s accomplishments can also be explained by the company’s consistent focus on two long-term goals that is “becoming the world’s largest consumer to consumer online auction house and building out each of the five core strategies”.
The company’s brand building shifted though with the arrival of new top professionals. bay also added dealer to person trading and addresses the fast growing and fragmented small business market by creating a feature called business exchange.these strategies reveal that eBay has applied sound strategic management as adopted from Porter and other Management experts . where businesses could buy or sell new. eBay established relationships with more than 60 websites. that is Establishing a larger user base To attract new users.S markets they deliver distinct regional flavors and give users the convenience of shopping locally for difficult –to ship items such as automobiles or antique furniture. The second strategy is: eBay concentrated on local and international trading EBay has local sites in 53 U. used or refurbished business merchandise and professional tools in their local market. The first strategy is creating an insurmountable customer base.Its whole business revolves around creating an environment where everyone can come and transact without any second thought of being cheated or misguided in any form. including America online which gave eBay the largest access to the largest user base on the internet and prevented AOL from entering the auction arena. The fourth strategy is: . The third strategy is: Creating a strong brand For eBay’s first few years it did not spend a single penny on marketing. relying instead on viral marketing and its ability to piggyback on competitors ceaseless (and expensive) efforts to retain market recognition. The company also built a truly global presence with users in more than 150 nations.
a move that would increase its profit margin dramatically while requiring minimal infrastructure and operating expenditures. allowing users to place real-time bids for items on offline auction house floors. bay acquired a company called Billpoint. the marriage of offline and online auction houses revolutionized the way that fine antiques and collectibles were bought and sold. Sellers need do little more than write a compelling description of the item up for auction. The fifth strategy is: Maintaining a strong community affinity The company believes that fostering direct interaction between buyers and sellers with similar interest had enabled it to create loyal. buying and selling on eBay are made easy for users to manage the process on their own. To enhance the payment component of the customer experience. EBay’s response was to extend its core business into other attractive niches. whose online bill payment service facilitates credit card payment between buyers and sellers. established user bases. an admitted difficulty for mast buyers and sellers. while eBay had the first entry advantage. some including yahoo and Amazon were internet significant players with extensive. provide a suitable photograph. . a host of competitors had entered the online auction market. The only caveat was that the company needed to develop a new skill set-to overcome this obstacle eBay made several acquisitions.Broadening the trading platform By 1999. not all of its competitors were small start ups. Continually enhancing site features and functionality Because eBay’s strategy is to be as hands-off as possible when it comes to transactions. the company has to provide a reliable and straight forward way for users to manage the process on their own. starting with auction house Butterfield and Butterfield. eBay’s fourth year. active community of users. and decide how many days the auction will last. the company introduced higher priced product categories.
a French entrepreneur was just 28 when he sat down over a long holiday weekend to write the original computer code for what eventually became an Internet megabrand. The brand has grown tremendously over the decade or so since its conception. The company exploits the benefits of Customer Relationship Management (CRM). Pierre Omidyar. However the strong customer relationships are founded on a Consumer-to-Consumer (C2C) business model. Buyers and sellers register with the company and data is collected by eBay on individuals. The company is a giant marketplace used by more than 100 million people to buy and sell all manner of things to each other. The strengths of eBay could be identified like: eBay is the leading global brand for online auctions. This is the Business-toConsumer (B2C) side of their business.' Weaknesses of eBay were as below . and whereby awards are given to the most genuine of eBayers. Today it is common to hear that someone is ‘ebaying' or is an ‘eBayer.' or that someone is going ‘to eBay. The term ‘eBay' has become a generic term for online auctions. Other companies with such a strong position include Hoover for vacuum cleaners and Google for search engines. for example where buyers and sellers leave feedback for each other. where strong interrelationships occurs.SWOT Analysis SWOT Analysis of eBay is carried out to get onto the finer and intricate details that eBay has adopted in such a shorter span of time to achieve profits in millions and is able to maintain a customer base that is again unbelievable.
Even a mammoth organization like eBay faces threats. Opportunities that eBay had were tremendous and invincible. systems breakdowns could disturb the trading activities of eBay. For example.in an effort to increase the number of services it offers to consumers and keep its profits growing. Yahoo! Dominates the Japanese market. Fraud includes counterfeit goods being marketed to unsuspecting (and suspecting!) eBayers.The organizations work tremendously hard to overcome fraud. It should be pointed out that fraud and theft are problems with individuals.6 billion. New and emerging markets provide opportunities (Market Development). which can be like as below: As with many of the global Internet brands. Attack by illegal practices is a threat. eBay has been buying up firms . eBay’s latest venture is it has agreed to buy online telephone company Skype Technologies in a deal reported to be worth $2. However they are designed so that you input private information that the thieves can use to take passwords and identifications. consumers are becoming richer and have more leisure time than previous generations. Skype's software lets PC users talk to each other for free and make cut-price calls to mobiles and landlines. For example e-mails are sent to unsuspecting eBayers pretending to come from eBay. Other forms of theft could include the redistribution of stolen goods. They are: Acquisitions provide new business strategy opportunities. However. the eBay model does leave itself open to a number of fraudulent activities. In the past both eBay and its payment brand Pay pal have encountered shutdowns and outages. In fact eBay has found that it has met with other USA based Internet companies when trading overseas. success attracts competition. International competitors competing in their domestic markets may have the cultural experience that could give them a competitive advantage over eBay. Aspirating consumers are growing segments in many developing nations.including payment system PayPal . As with weaknesses above. As technology improves such a weakness is less and less of an issue. The weaknesses that unscrupulous individuals can exploit the C2C business model. - . Logos and the design of the pages look authentic. not eBay. There. Often the company deals with such activities very quickly. the brand is attacked by unscrupulous individuals. As with many technology companies. Countries include China and India.
• A fee is charged for additional listing options to promote the item.Ebay business model eBay has built an online person-to-person trading community on the Internet. which ranges between 30 cents and $3. The items are arranged by topics. using the World Wide Web. such as highlighted or bold listing. collectibles shows.30. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering.25% to 5% of the final sale price. depending on the seller's opening bid on the item. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale. and who build . which has traditionally been conducted through such forms as garage sales. This fee generally ranges from 1. Browsing and bidding on auctions is free of charge. but sellers are charged two kinds of charges: • When an item is listed on eBay a nonrefundable Insertion Fee is charged. eBay has both streamlined and globalized traditional person-to-person trading. and the seller and buyer finish the transaction independently of eBay. flea markets and more. where each type of auction has its own category. many of whom keep buying and selling for years at a time. A Final Value (final sale price) fee is charged at the end of the seller's auction. The binding contract of the auction is between the winning bidder and the seller only. Why is eBay so successful? What is it about eBay that attracts millions of registered users from all over the world. buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. with their web interface. • eBay notifies the buyer and seller via e-mail at the end of the auction if a bid exceeds the seller's minimum price.
On the usual e-commerce site. I’ve seen surveys indicating that the average eBay user spends more than 47 minutes on eBay. eBay ended up making lots of money. The reason eBay is so successful is because the site gives buyers and sellers plenty of reasons to stay for long periods of time and revisit on a regular basis. and people go to eBay looking to make some extra money or save a few dollars. collectors. Users often meet and greet each other in the same spots on eBay. But eBay has done well when the economy is booming and also when it’s slow. or at the same each day. Both buyers and sellers are encouraged to post comments in the Feedback Forum describing their dealings with one another. either in a weekly. Antique hunters. and thus generate some revenue for eBay. Look at all the things eBay members can do other than buy or sell: Post feedback. It goes back to the vision that eBay’s founders had in the beginning: eBay would create the environment and give users ways to interact. By focusing on creating a community of users rather than simply on finding ways to make money. In contrast. the more likely they are to actually complete a transaction. and bargain hunters of all sorts love to talk about their common interests. and heads to the checkout area as quickly as possible. visitors to catalog stores and other commercial Web sites might spend only ten or twenty minutes there. . just to say “hello” and share opinions about the news of the day. The longer they stay on eBay. prearranged chat. The need to establish and maintain a good reputation gets people involved with the site.good part of their daily lives around the site? Some might think it is because the economy is slow at a particular time. “Talk” to others in message boards. picks out one or more items. someone does a little shopping.
Being in a market with huge network externalities makes it extremely difficult for a competitor to get a large share of the user base.) This tremendous switching cost has the effect of locking in customers to a single auction service provider — in this case eBay. Internet) is universal. The faster it grows. since most users tend to gravitate towards the service which already offers the most users (since it will presumable have the greatest number of offerings. . it’s part of their daily lives. and gross merchandise sales are growing 135% faster. This gets them personally involved with the sales. What comes stronger into play is the network externalities effect. Sellers can open eBay Stores. and the physical assets required to setup an auctioning site are all commercially available. the more securely will it hold its top position in the auctioning service market. which is exactly what Amazon and Yahoo have done. as was mentioned before. eBay's Position in the Industry Because access to the online trade channel (i. Given network externalities and the relative ease one company can mimic and duplicate another company's innovations online. eBay is gaining users 50% faster in Europe than in the United States.e. eBay sellers and buyers can create About Me pages to tell people something about themselves. the main tact rivals can deploy is to lower the price of their service. Currently eBay is extending to markets overseas.Post secondary information. it is now operating in eight of the top ten countries by online market size outside of the United States. In Asia eBay is in 80% of its largest e-commerce markets. barriers to entry in the auctioning industry are minimal. it’s not just a business.
Customers who don't know you exist will know about you. Helps Create New Relationship Opportunities: Expanding or opening an eBusiness can create a world of opportunity and helps to establish new relationships with potential customers. By reaching out to new markets and displaying your site prominently in front of them. you will help to create more word of mouth buzz for your eBusiness. Users who haven't heard of you will discover you exist and help spread the word about you. giving your customers 24 hours a day. The customers you have will become more loyal shoppers each time they visit. in turn helping to promote your brand name and products. you will be available for others to find and approach you about new opportunities. Increases Brand or Product Awareness: Having an Online business means that you can literally reach out to millions of consumers looking for what you sell anywhere in the world. You can literally take orders and let customers shop while you sleep. In addition. Just by being in an easy to find location that is accessible to users all over the world. it's easier to set up and open the store and it's faster to get an online business up. Helps Establish Customer Loyalty: An eCommerce storefront will help create an easier means for your customers to purchase the items you sell and offers a unique way to display and describe your products in a informative. running and making sales. take vacations or from remote locations. product suppliers will request you add their items and other businesses will approach you about partnership opportunities. the costs associated with having your store open 24/7 are much less than maintaining a physical storefront or phone operator with 247 operation capability. but orders can still be made over the weekend and customers can still make contact 24/7 via email. Open for Business 24x7: An ecommerce site basically gives you the ability to have unlimited store hours. The biggest benefits of conducting business Online include a cheaper upfront cost to the merchant. Some merchants choose to limit their hours to 5 days a week. By giving users 24/7 access in an easy to find location. visual and interactive way. Many of these opportunities would not present themselves without an Online presence or site for them to discover you on their own. you will be able to help increase your company/domain brand name and also increase awareness about your product line. potential business associates and new product manufacturers. 7 days a week access to shop and buy items from you. phone or fax. making eCommerce great for improved .Benefits of e-commerce The processes involved with conducting business on the Internet and opening an ecommerce shop to sell from have several benefits to both merchants and the customers who buy from them.
Potential to Increase Overall Business Sales: An eCommerce store that is an extension of a physical storefront is a great way to boost overall business sales and potentially increase company profits across the board. owning an eCommerce business typically means no limits as to who and where you can sell your products. Sales and profits are the lifeblood of any company. It's a great way to increase sales. Some countries outside the United States have additional regulations. More sales. licensing requirements or currency differences. Companies who already do business from a physical location are typically unaware of how much more they could be making if only they were to expand into their Online marketplaces. anywhere. consumers will be able to shop from your catalog more easily.customer satisfaction and visitor loyalty. eCommerce stores can run with less employees including sales staff. phone bills. At the very least. UK. Potential to Decrease Some Costs: In addition to potentially increasing sales and profits. eBusiness owners can also typically reduce the costs of running their business by moving it or expanding it into the Online world. Remember. more profits. but also consider. etc. which can reduce costs related to building leases. Potential to Increase Company Profits: As mentioned above. order fulfillment staff and others. Canada. but generally you will not be limited on the customers you can reach out to. Physical storefronts are limited to the city in which they are located. anytime! Allows for Smaller Market or Niche Targeting: . get updates on new items or product discounts and can shop or buy anytime they wish. just because SALES increase it does not necessarily mean that company PROFITS will increase also. Australia and others. especially if you already have a physical store. Online businesses do have a greater chance of increasing sales and profits by opening up an eCommerce store to sell the items they offer. so it makes sense to increase them where ever possible and whenever possible throughout the existence of your company. Online businesses aren't limited unless you put geographical limits in place. Now that you offer your products for sale Online. customer service reps.S. Selling Online opens up many opportunities for businesses both new and old. opening an Online extension of your store or moving your business solely Online are great ways to boost sales and potentially profits. you should consider targeting U. Expands Geographical or Customer Reach: As mentioned. Sell to anyone. utility costs and other costs associated with running a brick-and-mortar storefront. buyers. eBusinesses also do not need a physical location in order to stay operational. bigger budgets.
you may only wish to target smaller consumer markets and buyer niches for your eCommerce products. In order to start-up and run any conventional business. This is typically done by placing keywords that those niche markets use on a regular basis when shopping for the items you offer. specials. Not only does it benefit your customers.there can be a big time lag before your products are delivered to the buyers and consumers and turned into sales and revenues. Prospects of e-bay business model in Bangladesh A Conventional Business needs a fair amount of both Capital and Time to be established and organized before you can really start trading profitably. real time data and much more information that they can easily find just by visiting your site day or night.then depending on your product design and manufacturing cycle . Currently.Although your customer reach may expand beyond your local area. It saves both your customers and you precious time and can help you to plan more updates or better sales as it will be much easier for you to update and take down. you can target women. a particular race and many more smaller niche markets. And if you were planning to manufacture your own product . company information. Allows for Easier Delivery of Information: An Online store and Web brochure are great ways to deliver and display information about your company and the products you sell. men. promotions. With an Online presence your customers will have direct access to product information. a generation of users. Owning an Online store gives the merchant much control over who they target and reach out to notify about the items for sale in their store. there are certain minimum requirements which must be met before you can open shop and start trading including but not limited to: Capital or Equity . but it's also generally easier for merchants to update their site rather than break down an in store display and put up another for the next event.
4.You . Registration 2. Registration and the beginning of a successful business can normally be accomplished within 24/48 hours with: No overhead or upfront costs . 3. A Valid Credit Card 6. A Computer or Access to a Computer.including your managerial and organizational skills Time . you can begin to sell any product you want at a profit.weeks or months or even years of advance preparation Business Strategy and Plan Financial Plan and Short-term to Mid-term Budget Marketing Strategy Business Premises including Location and Layout Manufacturing Premises if you plan to manufacture your own products Equipment .either manufactured by you or purchased from a supplier A Reasonable Advertising Budget Banking Facilities Trading Licenses and Certificate of Incorporation Customers Other Requirements depending on your country and place of business. But as an Online Auctioneer there are really only 6 easy to meet requirements: 1. Computer Knowledge. A Valid email Address Once you have registered with the online auctions site or sites of your choice. A Good AD 5.Office and Manufacturing Personnel An Inventory of Products to sell .
thus giving purchasers adequate time to search.Online auction sites attracts a large amount of traffic making them an ideal place to capitalize on readily available. decide and bid. Because of the .Buyers and Sellers can participate from anywhere in the world that has access to the Internet. professional dropshippers The future prospect in this business model is clear and beyond dispute: No Time Constraint .Buyers and Sellers can participate from anywhere in the world that has access to the Internet and in their own language.Bids can be placed at any time. widespread exposure for your product and/or company. reduces the cost of "attending" an auction.The social interactions involved in the bidding process are very high as the bidders wait in anticipation hoping to "win" and many bidders bid primarily to "play the game" rather than to obtain the and product. No Geographical Constraints .No Need for Sales Staff or Distributors No Need for Business Premises No initial investment required No need to ship products yourself if you use established. seven days a week and l65 days a year. Items can be listed for up to 10 days at the discretion of the seller. Intensity of Social Interactions . No Language Barriers . reducing costs and the seller's minimum acceptable price. 24/7. This convenience increases the number of bidders. This makes the auctions more accessible. and increases the number of listed items/sellers and the number of bids/bidders for each item. Large Number of Bidders . Also there is no need to ship items to a central location.
the broad range of products and services available. investors and marketers to enjoy booms without much competition. Large Unexplored Markets Bangladesh has a large market that has yet to be explored. The more the spiral operates. Network Economies of Scale . in turn. there are usually a large number of sellers. The market holds great opportunities for innovators. as it represents a potential market.Because of the large number of bidders. which will encourage more sellers etc.The larger number of bidders encourages more sellers which. Large Number of Sellers . Growing Population Bangladesh being one of the most populous countries in Asia is a ready market for both domestic products and foreign brands. the ease of access and the social benefits of the auction process. the larger the system becomes and the more valuable the business model becomes for all participants. there are usually a large number of bidders. Attractive Government Incentives . The high and growing population of Bangladesh is an incentive. will encourage more bidders. in a virtual spiral. the potential for a relatively high price. Thus the market is not as saturated as developed countries. reduced selling costs and ease of access. E-commerce does not operate in a vacuum but requires a large number of customers with the willingness to do business and patronize business.potential for obtaining highly valued items at a relatively low price.
These incentives include tax holidays. Other prospects • Expanded Geographical Reach • Expanded Customer Base • Increase Visibility through Search Engine Marketing • Provide Customers valuable information about your business • Available 24/7/365 . Thus it is expected that the demand for products will increase and the general atmosphere of business will improve and all these mean well for e-commerce. There are also improvements in infrastructural facilities that will ginger the performance of e-commerce.Trade policies of Bangladesh are becoming quite favorable for both local and foreign investors. This results to income distribution and increased purchasing power and discretionary income. Rapid Economic Development The economy of Bangladesh is rapidly growing as a result of efforts being made by the government.Never Close • Build Customer Loyalty • Reduction of Marketing and Advertising Costs • Collection of Customer Data . incentives for ecommerce business.
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