Ebay Case Study On Growth

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(Appendices not included)

eBay should continue to focus on growth and continue to fight off competition from rival

companys. eBay has dominated the U.S. online auction market ever since its creation in 1996.

The current market conditions are changing and eBay must position itself for continued growth.

eBay has met most of its key success factors shown in Appendix 1, but must continue to focus on

them to sustain its current growth. eBay's two fundamental challenges include, continued

growth, and the evolution of the business model.


eBay's growth this far has been outstanding but with the slowing market conditions eBay

must attract new customers to continue its current growth. eBay has sustained a competitive

advantage in the online auction market, but now must transfer this success to additional

expansion in the international markets. One of eBay's weaknesses as ,hfi*ryrthe SWOT analysis

(Appendix 2) is that eBay has not prepared for the slowing of the U.S. market. With Yahoo

exiting out of some international markets this leaves a larger market segment available for eBay


to absorb.l

eBay should achieve a competitive advantage over other online retail companies by

continuing to expand into the international markets. The emergence of the Asian and European

markets (due to increased internet access) creates a good opportunity for eBay to assert itself as

the global leader in online retail. By taking advantage of the opportunities to capture the market

early on it will be easier for eBay to introduce new products for continu ed growth.y/

eBay also should consider expanding some of its key categories to capture alarger

market share in that industry. Some of eBay's best categories only capture 1-5 percent of the

total market for that good. For instance eBay's largest auction category (eBay Motors) has less

than a 1 percent market share in the $7.5 billion dollar automotive industry. This represents a

significant growth opportunity for eBay to capitalize on. eBay should also take its next 2 largest

categories (Consumer electronics, and Computers) and combine them to create eBay Electronics

which would be a separate site through eBay, similar to eBay Motors. By creating eBay

Electronics, eBay can focus more on its most popular categories to offer greater product

selection and information on the electronic oroducts that it sells.

Evolving Business Model

Another weakness eBay has shown on the attached SWOT analysis (Appendix 2) is that


the company has little experience with fixed-price salesYFor eBay to sustain its success they

must eventually offer more fixed-price sales to compete better with Amazon.com and Yahoo.

eBay needs to transfer its competitive advantage in the online auction industry into the area of

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