1.0 INTRODUCTION This report will attempt to critically analyse and assess the internal and external factors which effected the strategic decisions made by eBay. These strategic decisions consisted of the acquisitions with Skype and PayPal coupled together with an analysis on why eBay failed may have failed in expanding their online presence in eastern parts on the globe such as China. 2.0 BACKGROUND EBay is an American internet based co-operation with its main headquarters in California. It was first set up in 1995 and has become one of the world’s most successful companies ever with ebay.com being the company’s main area of focus. Ebay.com is an online auction and shopping website where people and business have the opportunity to sell and buy goods and services worldwide. 3.0 THE INTERNAL AND EXTERNAL ENVIRONMENT E-marketing is a fast growing and rapid platform for any form of business. EBay has been highly successful over recent years and this is a perfect example of an online business. The internal and external environments are constantly changing and in order to keep up with these changes, businesses and organisations must make relevant changes, and generate new strategies to keep up with contemporary developments in e-marketing and to also maintain their position in their market in comparison to their competitors. The strategic decision to form an acquisition with Skype in 2005 was made and the deal was said to be worth $2.6 billion. It is argued by eBay that with Skype it is able to create an “un-paralleled e-commerce engine”. This acquisition was a follow up of purchasing PayPal in 2002. Acquiring these prominent companies has allowed eBay to forge greater links on order to dominate specific regions of the world. Thes... ... middle of paper ... ...ount of untrustworthy and reliable sellers. EBay could counteract this problem by implementing a strategy where eBay would have the authority to terminate a user’s account if their rating in percentage dropped below 60%. This strategy may help the organisation to reduce the amount of unreliable seller resulting in a much more safer and reliable market platform where people would be able to purchase products at ease without any hassle. 6.0 CONCLUSION In light of the analysis made above; an attempt has been made construct a critical analysis of the internal and external environment which influenced eBay’s strategic decision to form acquisitions with Skype and PayPal along with its performance in eastern countries. These factors were supported through various forms of research and background reading in order to support the validity of the points raised in this report.
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In terms of PayPal’s corporate level strategies, they have focussed on innovation where they are trying to bring new system and feature into their existing technology or product. The process is to cope up with the growing number competitions such as Apple Pay, Google Wallet and other financial institutions and providers. According to Keith Bossey PayPal was the only alternative web and mobile based payment processing provider among a field of 35 competitors to earn ‘Star’ status in their brand equity. They are the only brand used by a majority (53%) of micro to small medium sizes business and private enterprise owners around the world (Fallon, 2014). PayPal’s another corporate strategies was to connects with financial institutions around the world and allows customers to collects payments using a wide range of payment method such as Visa Credit, Online banking etc. It happens regardless of where the business and seller is being located. Despite the split from their parent company eBay in 2015. They have embarked their payment system journey through strategic acquisitions and growth in their strategies (Nunez Enterprises, 2015). At the same time their innovation and emphasis leads one of the profitable business and trying to do their best to serve consumer their services. The report show that they continue to expend their operations covering all seven continents and trying to reach as many consumers as possible to enable easy and faster payment system. According to CEO Dan Schulman PayPal will be providing “full service” to their
Since its inception in 1995, eBay has become the market leader and innovator in the online auction industry and its brand has accordingly become synonymous with e-commerce. Rapid growth and being the first to market served eBay’s competitive strategy of differentiation well; there was really nothing like it out there: unique service, broad range of products and global reach. In addition, their target audience was quite diverse-on the buyer side you had everyone from hobbyists and collectors to the bargain hunters; on the seller side you had antique dealers, casual sellers, mom-and-pop businesses selling unique items and finally large well-known corporations liquidating their inventory. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category.
After I received your email asking me to give recommendations about the IBazar Brazilian operation and your next expansion in Latin America, I spent the whole week analyzing the eBay current situation, as well as the Latin America e-commerce market, in order to come up with the appropriate solution that guarantees an immediate success of your company in the region. First, I will start with a systematic analysis of eBay's international market-entry strategies. Second, I will exanimate the Latin America e-commerce market. Finally, I will use the precedents analyses to provide you with a set of recommendations concerning the prospective expansion in Brazil, as well as, your extension in the entire Latin America as a whole.
eBay To: Board of Directors From: Management Team Subject: ebay: Facing the Challenge of Global Growth Date: 29 October 2008 Executive Summary: Introduction: The goal is for E-bay to move into more international markets; such as Russia, Denmark, Vietnam, and Turkey. In addition, to focus on fixed-price options and advance opportunities with more sellers and specialty items. Discussed will be the strategic impact on the above identified issues, and the best direction that E-bay should move into for advancement in business growth and operating margins. Industry Analysis: World Wide Internet users are on the rise. People across the world are adapting to using the internet (see Exhibit 1). With a large increase eBay would be able to market across the world. The company would make a considerable investment to expand in countries such as Russia, Denmark, Vietnam, and Turkey. With the current investment in 33 countries, a minute step to invest in more would be a significant gain in market share. The most positive outlook on the international market expansion is that the barrier to entry is relatively low. Competitors will need to enter the market and be able to know how to attract buyers, what will be sold and how much, and how to control their budget. Competitors also lack the knowledge that is developed from years and years of experience of the on-line auction industry. E-bay has the tacit knowledge and experience to continue to grow in the international market. The online auction industry will also give much strength to suppliers. With the decrease in selling costs this will coerce competitors to obtain groundwork to increase the amount of supplier’s and entices new sellers by offering higher profits per sale.In return this will truly benefit E-bay. Competitor Analysis: Amazon, another high competitor, will maintain to deliver more value to the customer in terms of ease, selection, and availability, which in turn will continue its competitive pressure on eBay. EBay to fully win over competition will need to increase the fixed-price options. Yahoo and Amazon both offer products at fixed-prices which bringin a variety of clientele. Some that may be not searching for a bargain, but a particular hard-to-find item. The fixed-price trading is expected to grow to nearly 50% by the year 2010 (see Exhibit 5). This causes for a huge emphasis, because this is a growing market.
As I read through some of the discussion threads of eBay sellers, I realized how technology has allowed us to form international community of consumers with established rules and regulations. Doing business through eBay still seems a little risky but the fact that the majority of people still live ethically has allowed e-bay to succeed. Like in every society there are people that still try to circumvent the system and will try to get away with unethical activities. Through the discussion forum, eBay sellers have established an environment in which anyone can communicate the problems they have encountered and ask for advice for handling those situations. Sellers also have the option to offer suggestions on how to make the selling process better. Some of the issues that I found interesting in nature were how e-bay sellers handle non-paying bidders, feedback concerns, and international selling.
PayPal was launched in 1998 as an online transaction method where users can pay and receive money online. It’s located in San Jose, California and eBay acquired it in 2002. Users can pick their preferred payment methods such as credit cards, bank accounts, PayPal balance, PayPal plus credit cards and PayPal buyer accounts do their transactions without revealing their financial information. It has a user base larger than 152 million globally and available in 24 currencies and 203 markets across the world [source: PayPal]. So PayPal is recognized as one of the fastest, safest and easiest way of doing online transactions and already received a number of global awards (more than 20) so far.
The method eBay has deployed in order to reduce fraud is via a feed back system. This system allows consumers to make comments on sellers that are able to be viewed by all potential consumers. The feedback system reduces fraud by letting all consumers know how the seller typically deals with his or her customers. The feed back generally entails the quality of the product and whether or not the item actually matches the seller’s description. Consumers can also give feed back on the time it took to deliver an item so it can be estimated how long a seller will take to deliver. Once again on quality, this can be also verified by the images of the item posted by the seller, if the actual item does not match it, negative feed back will turn off future consumers from particular sellers.
The purpose of this industry market analysis is to explore Alibaba.com, an internet-based company that provides platforms for consumer to business transactions. The e-commerce industry has become highly saturated however there are only a handful of leaders in the industry including Alibaba. Alibaba’s unique business model is designed to create an ecosystem within e-commerce. Thus, cutting operating costs and reaching a larger demographic. Despite its competition, Alibaba is the leading e-commerce company in China and is expected to continue to grow exponentially.
Finally one very important thing that eBay should focus on is security. Going global means more and more complex knowledge-based work is required. EBay had many issues with security and breaches in the past. Malicious hackers have been attacking eBay’s network. EBay does its best to keep their security to the best possible level however that is not enough (Dan, 2007) personal information is very valuable and should not be compromised at any cost. If these security problems keep going on eBay will loose the trust of its customers. It is very important for eBay to keep in mind that as they expand their market, so should they also invest in the best security possible to avoid any incidents in future or the incident can become a barrier to success in future.
There are two primary issues faced by eBay that it is trying to address. The first and most obvious of which are competitors. Just like practically every industry, there are other players that want a piece of that industry. The second issue has to do with the perception of risk in buying from sales. Because, for the most part, all the providers are unknown to the customers, they cannot be completely sure that the supplier is genuine.
Did you know you can buy items such as a vintage World War Two plane, to a yacht, to a mobile home? It is true. EBay is an online auction and shopping website that is used by millions of people worldwide and offers customers a variety of various types of products to buy. It is one of the biggest e-commerce companies in the world. EBay allows people to sell and buy products from many different countries around the world. There are some people who make an income out of selling goods on eBay. In electronic commerce such as eBay, Information Technology (IT) is used anywhere from the collection and storage of data, to security factors, and to helping customers with their online auction experience. Without the help of Information Technology; eBay
The future of economic competitiveness for most enterprises relies on entrance and active participation in the e-commerce market. An essential problem with e-commerce is that the controls and organization are different for each site. There is no standard way of building t...
EBay as well as its buyers are award that there is a potential for some sellers to try to sell counterfeit products. Which has result in legal issues for eBay and some negative feedback from consumers. Allowing this can affect eBay because they are known to deal with some major companies, direct companies, meaning they sell items that come from those companies and there is no possible way for the items to be counterfeit. However, we do have some sellers that do take the risk and sell things that is counterfeit, not a good image for neither the seller nor eBay.