Post on 24-Nov-2014
Jose, Katarina, Patrick, Pete
Strategic DecisioneBay purchased PayPal for $1.5B in 2002
Different from other acquisitions at the time Based on a proven and workable model
Significant impact on customer satisfaction Faster and safer transactions Compatible interfaces
Immediate Performance“Our Q4[02] results capped our most successful year ever," said Meg Whitman, President and CEO of eBay.
For the period from October 4, 2002 through December 31, 2002, PayPal recorded net revenues of $74.7 million, driven by total payment volume of $2.14 billion.
The company’s PayPal business had 40.3 million total accounts at the end of Q4-03, a 73% increase from the 23.3 million reported in Q4-02.
eBay’s Strategy Diamond
Economic Logic
Arenas
Vehicles
Differentiators
Staging and Pacing
eBay’s Value Curve
Integrity Quality Prices Convenience Variety1
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Traditional Retailer
eBay’s Value Curve
Integrity Quality Prices Convenience Variety1
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Traditional RetailerAmazon
eBay’s Value Curve
Integrity Quality Prices Convenience Variety1
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Traditional RetailerEbayAmazon
Industry ForcesDegree of Rivalry
Industry Growth
Complementors & Substitutes
Threat of New Entrants Industry concentration Industry Growth
Buyer Power Switching costs
Current Performance
Most popular shopping website by traffic
2010 FYE revenues of $9.2 Billion PayPal produced an approximately $1 billion in
operating profits
Overall the purchase of PayPal played a key role in the survival and growth of the company
Q&A Period