Ebay Objectives And Strategy Information Technology Essay

eBay Institution, launched in 1995, is one of the most successful and popular online auction and shopping web sites, supplying market places for Sellerss and purchasers to name, sell, command and purchase merchandises and services. With 100 1000s of the United States citizens make their life by purchasing and selling on eBay, and with more than 56 million active users, in 2009, acquired many companies, e.g. PayPal, Skype, shopping.com, wishes to remain as a leader in on-line distribution channels. eBay asserts “ trust ” between purchasers and Sellerss as the key to the success of the market place.

“ The universe ‘s Online Marketplace ” statement declares the company ‘s place in the planetary market places. eBay has built a successful concern theoretical account either within the national boundary lines or internationally and attracts diverse communities of persons and little concerns. The company attempts to spread out the work ethic and civilization of eBay as an unfastened and swearing environment to increase its day-to-day 1000000s minutess.

eBay market capitalization had exceeded that of even Amazon.com, and has brought it to the visible radiation as the “ universe ‘s most valuable Internet retail merchant ” . Despite environmental dangers and rivals menaces, eBay ‘s direction desires to do usage of the chances and change the company as the “ universe ‘s largest online promenade ” . This research paper aims to analyze eBay concern theoretical account and to verify challenges the company might face.

Introduction ( 120 )

In the late 1995, Pierre Omidyar established “ Auction Web ” , as an on-line auction web site which had few visitants during the first yearss. He desired to supply a ocular market place for persons to advertise and establish their goods and services. Auction Web was more successful during the following two old ages, when more visitants were attracted and eBay entered into its first third-party licensing trade to sell travel merchandises. In September 1997, the company ‘s name changed to eBay Inc. The company ‘s mission, moreover, strengthened to make on-line person-to-person market places, where clients bid on the listed points, provided by Sellerss.

Procedure / Research ( 350 )

The instance study research method, defined as a instance survey of a specific Institution. It is the most frequent qualitative method applied in information systems context. Yin ( 2002 )[ I ]describes the range of a instance survey as “ an empirical enquiry that investigates a modern-day phenomenon within its real-life context, particularly when the boundaries between phenomenon and context are non clearly apparent ” . Obviously, the instance study research method is peculiarly well-suited to Information System research, and since the involvement of this research was to analyze of Electronic Commerce in eBay Institution, the involvement has shifted from proficient to organisational issues.

The chief intent of this research was to verify a successful ecommerce concern theoretical account, from a strategic position. eBay Inc. , therefore, selected to carry through the research demands, i.e. an accessible database, equal research works, and most significantly typical concern theoretical account.

In order to follow with research necessitates, empirical stuffs collected from trusting modern-day frogmans beginnings. Most of research documents found via Infolinx available in university computing machine bunch, by choosing find database, concern and direction and e-journals. Then concern beginning complete ( EBSCO ) , advanced hunt of Science direct, and Emerald direction Xtra severally selected to happen the best consequences. The keywords used differed from e-business and ecommerce for debut portion, to eBay aims, schemes, strengths, client to client, etc. for analysis portion. Google Scholar besides was an alternate hunt engine, although, more accurate and related consequences are acquired by utilizing Infolinx. Another trustable beginning of pull outing informations was eBay.com, where valuable empirical stuffs, such as FORM 10-K Annual Report, and accurate informations, e.g. Fiscal Statements, were archived.

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Findingss / Analysis ( 825 )

Soon after the earliest success, eBay set pes into other markets with higher mean gross revenues monetary value ( ASP ) . The higher the ASP, the more net income eBay obtains. In other word, its dealing fees are based on a per centum of gross revenues. Presents, eBay has become one of the most successful and profitable international automatic auction and shopping web sites all around the universe. The on-line market place enables Sellerss to categorise their merchandising points by a few proceedingss and facilitates purchasers to happen the best points through 1000s of merchandises.

Business Model

eBay enables its website users, i.e. purchasers and Sellerss, to offer and shop freely. As an point is being sold, seller would be charged eBay dealing fees. There are two kinds of dealing fees, “ interpolation fee ” and “ concluding value fee ” . Insertion fee theoretical account charges seller harmonizing to the gap command one time an point is registered on eBay. The later is charged when the auction is ended.

Figure – eBay Marketplace Business Model

eBay informs both marketer and purchaser via electronic mail when the auction is ended. The dealing so would be completed by their verification.

As it is shown in Figure 1, eBay permits its users to pass on liberally via making forums, single content creative activity, and evaluation. That is, the customer-to-customer side of eBay concern theoretical account, operates alongside of business-to-customer side as a consequence of buyer-seller interactions specifically provided an little concern Acts of the Apostless as the marketer.

Most of eBay ‘s gross additions through the listing and committee on fulfilled minutess. PayPal users have to pay an extra committee fee per purchase. Margin on every individual dealing is singular because when the substructure is built, incremental costs on each dealing is bantam – all eBay is making is conveying spots and bytes between purchasers and Sellerss, Dave Chaffey 2009.


eBay missions could be outlined in uninterrupted e-commerce taking expanded on trust, and motivated by chances.

Presents, eBay incorporate three large-scale concerns, i.e. Online Marketplaces, PayPal, and Skype Internet Telephony. As the biggest on-line market place, eBay ‘s mission is to “ make the planetary online market place ” . Besides, as a subordinate of eBay, PayPal seeks to “ make the new world-wide criterion for trusting online payments ” . Furthermore, Skype Internet Telephony, took over to let purchasers and Sellerss to talk anterior to staying, SEC 2009.

Meg Whitman, former President and CEO of eBay Inc. announced “ eBay, PayPal and Skype are successful concerns on their ain, and together they create extra chances for invention and enlargement. ”

eBay Aims and scheme

As a for-profit company, eBay ‘s nucleus aim is to augment its gross from the eBay market places. First of all, they direct their schemes toward pulling new users and increase the figure of clients, so called acquisition. Then they aim to active more users to offer by enforcing tempting ordinances, such as take downing fees for listings points and offering proper inducements and price reductions for their clients. Finally, they wish to mount up the gross ware volume and value of minutess which are conducted by every individual active user. eBay Annual study ( 2010 )[ two ]showed 90.1 million active users at the terminal of 2009 in comparing with the 56.1 million active users at the terminal of 2007, eBay Annual Report ( 2007 ) .

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These are the chief eBay schemes, although, different local markets desires typical schemes. Category enlargement, new interaction formats, and market place expansion have been eBay cardinal tools of public presentation betterment.

eBay Competition

There are few singular on-line auction web sites in plentifulness of states, although, tonss of indirect rivals threaten eBay market place. Figure 2 demonstrates the assortment of eBay rivals.

Figure – eBay and frogmans range of rivals

Few old ages ago, eBay cancelled its operation in Japan because Yahoo! was more powerful in the market. Its operation is besides being threatened in other Asiatic states ; peculiarly China where Yokel! provides boarder scope of services.

SWOT Analysis

As an on-line auction and shopping web site, eBay provides practical market places for selling goods and services in add-on to commerce, platforms, online payments services and on-line communications offering to persons and little concerns. The strong trade name value and market place, apart from high hazard of cyberspace fraud, are the cardinal factors of eBay success.

Table – eBay SWOT analysis


Efficient concern theoretical account have likely presented eBay as one of the most successful online channels globally. The typical concern theoretical account has moved purchasers and Sellerss in brotherhood and has made a flexible and cost effectual theoretical account. The most of import characteristics of this concern theoretical account are zero stock list and a topographic point for end-of-life and scarce.

eBay has made a strong market place and trade name through the old ages. Harmonizing to Datamonitor 2009, the eBay trade name value rank stood as the 54th trade name, estimated around $ 12.9 billion by the terminal of 2009. In December 2009, eBay had around 90.1 active users and about 150 million listing worldwide. Increasing the figure of clients has brought about worldwide growing, which enables company to show in 39 states and gives eBay significant bargaining power.

From 2005 to 2007, eBay ‘s entire grosss addition by 13 % as a consequence of first-class public presentation and helped the company to maintain its place as the market leader.


The universe ‘s on-line auction and shopping company has continuously been involved in different judicial proceedings. Many companies like Netcraft Co. claims that eBay and its subordinates undermined their patent right. From 2006 to 2007 many cases was filed claimed that eBay Inc. were monopolising markets, about all of these cases are still unfastened.

Up to the present clip, eBay has non been able to test its procedure in order to command imitative merchandises gross revenues. Some Sellerss unconsciously commit conflict the certain merchandise resale, irrespective of knowing fraud instances. Lack of appropriate monitoring has exposed the company in danger of negative public attending and frogmans ‘ quality cheque judicial proceeding. The image of eBay ‘s trade name, accordingly, would be sullied and this influences the gross.

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Internet advertisement grows quickly and is expected to bring forth $ 147 billion by the terminal of 2012. eBay additions singular net income from advertizement and classifieds, specifically after the launch of their ain advertisement service. Thus, addition of Internet advertizements will raise grosss straight from advertisement service provided and selling advertisement infinite.

During the unsure economic periods, consumers are more interested to purchase used goods, as a manner to salvage money. Harmonizing to Securities and Exchange Commission ( 2009 ) , around 75 per centum of grownups economized on money by buying used goods in 2008. Through eBay Marketplace, eBay is able to act upon the consumer ‘s behavior for pre-owned points and get leading in the niche market.


Internet markets are exposed to assorted sorts of fraud, including imitative goods, recognition card frauds, etc. The mean loss was around $ 931 per ailment, harmonizing to the Internet Crime Complain Center ‘s statistics. Approximately 64 per centum of this loss registered as auction fraud, defined as deformed description of the points sold in auction web sites such as eBay. Efficient monitoring is dearly-won as the company has to incur considerable disbursals to extinguish delusory actions.

System dislocations may raise operational hazard for the company during the long term. The break of eBay.com for about a twenty-four hours and PayPal for 5 yearss in 2008 could cut down the service dependability, which is specifically critical for the payments division. eBay marketplace minutess include legion concern daily and system closures might act upon grosss well. Furthermore, frequent system failures make users to exchange to challengers and the company ‘s repute and trade name value would be affected negatively.

Decisions and recommendations ( 470 )

eBay ‘s schemes to supply an on-line market place seems to be chosen right. As the “ universe ‘s on-line auction and shopping web site ” , they have been able to increase clients Numberss, get new companies and develop biding, merchandising and buying methods. Indeed, eBay concern theoretical account has been succeeded to change over yesterday chances to the current strengths and to construct a strong market place and trade name, and to raise gross.

On the other manus, breakability of eBay Inc. endangers company ‘s public presentation and profitableness. eBay should set about more precautious monitoring agreements in order to cut down hazard of fraud, since the company is exposed in danger of negative public attending. Efficient monitoring is dearly-won as the company has to incur considerable disbursals to extinguish delusory actions, although, advanced security processs appears to be critical.In add-on, eBay should take safety steps to do certain that its operations are non farther involved in any judicial proceeding.

In decision, eBay Inc. , who set the gait in practical shopping market around a decennary ago, should see new schemes in order to make the company ‘s aspirations, i.e. “ universe ‘s largest online promenade ” . This research was an effort to analyze an ecommerce concern theoretical account from a strategic position. This analysis requires more information and information to carry through a comprehensive strategic survey. Keeping that in head, this effort has ample range for betterment and farther research will add value doubtless.