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eBay
eBay Analysis
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1. Introduction
2. Business Model
3. Value chain
4. Competitive forces
5. Financial Situation
6. Challenges
7. Long-term Growth
8. Recommendations
Table
of
Contents
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Founded in 1995by Pierre Omidyar
#1 in e-commerce, online payment andvoice over Internet
Storenoinventory & Produce noproducts
16,200people (including temporary employees)
eBay
Overview
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81,000,000average monthly visitors
133,096,249concurrent listings
$60,146,000,000 PayPal transactions
eBay
Overview
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eBay:
technology has always been a key
enabler of our growth and a tool toconnect and empower millions of
people globally
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Marketplaces
Provide platforms for online commerce
PaymentsProvide online payment solutions
CommunicationsProvide low-cost connectivity
eBay
Businesses
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Seller Buyer
Product
categories
Communication
Sells
Pays
Feedback
Fees
Acquisition &
PartnershipsNetwork
eBay Business Model
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Strategic Alliance and Acquisition
Legal
Human Resource
Technology
Marketing
Word of
mouth
Partnerships
Classifieds
websites
Product
Categories
Old and
new
Variable
Purchasing
process
Traditional
auction
Buy it now
Fixed price
Communicati
on
Ask a
question
Skype
Click to call
Payment
Variable
Reliable
Peer
review
Customer
services
A Rules,
Trust and
Safety
committee
VoicesCommunity
Wiki
My
Collectible
ValueAdded
eBay Value chain
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New Market Entrants- Froogle
- The industry is very attractive
with no significant barriers to
enter
Substitutions- Traditional
retail
- Switching cost
from online
auction to
traditional retail
is high
Buyers
- Strong buyerbargaining power
with many
options in the
industry
Suppliers-Strong bargaining power for
software suppliers
- Weak bargaining power for
product suppliers
Rivalries- Strong competitors (Amazon,
Yahoo, MSN, FNAC)
- Others (ubid.com, overstock.com,
CQout.com, bidville.com)
eBay Competitive Forces
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Net Income
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
0
100
200
300
400
500
600
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
$ Millions
Net income
Link relative
Year to year
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MARKETPLACES
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
$ Millions
Internet
Auction
Link relative
Year to year
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PAYMENTS
-5%
0%
5%
10%
15%
20%
25%
30%
35%
520
540
560
580
600
620
640
660
680
700
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
$ Millions
Paypal
Link relative
Year to Year
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INCOME FROM OPERATION
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1700
1800
1900
2000
2100
2200
2300
07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3
$ Millions
Total operationincome
Link Relative
Year to Year
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STOCK PRICE IN 10 YEARS
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STOCK PRICE IN 5 YEARS
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STOCK PRICE IN 1 YEAR
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Exposure to large contingent liabilitiesdue to litigations
Insufficient screening process to controlcounterfeit products
Weaknesses
Exposure to internet fraud andsecurity concerns.
Increased business risks because oftechnological obsolesces andreliance on third parties for licenses
Unavailability of services leads toloss of income
Increasing competition
Threats
Challenges
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ValuableAssets
- Strong marketposition
- Effective Integration
of segments- Efficient business
model
- Rapid growth ofinternet display and
classifieds ads
- Increasing popularityof used goods
- Increasing reliance onalternative payment
systems due to safetyissues
- Rapid international
expansion
Rareness
- Strongmarketposition
- Efficient
businessmodel
Imitability
- Efficientbusinessmodel
OrganizationSupport
Can eBay still Grow?
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Make eBay interface easier to use
Improve value and selection by combining
fixed price with auction-stylelisting
Expand Payment segment, i.e. Paypal
Recommendations
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Expand product and service base
Acquisition or mergers must fit strategicbusiness of the company.
Diversify, but unprofitable/unfit businessesshould be closed
Recommendations