Case Analysis - Ebay Essay

Words: 2147
Pages: 9


I. Background of the Study
A pioneer and a market leader in the online auction industry, eBay has been able to grow the business significantly in the last decade amidst turbulent times for many contemporary dotcom companies. EBay’s strategy to focus on a niche market and differentiate itself through strong brand management and continuous improvement in the value-added services has enabled the company to defend the market leadership in the industry. While many new competitors have entered into the industry, eBay continued to set its sight in serving and growing.
From its no-registration, no-fee, grassroots trading company called Auction Web established in 1995, eBay has grown to be in a league by itself. It
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There are numerous auctions which could either be fake or illegal. Its inability to control the contents of the auction facilitates a large sale of copyrighted and not for resale items. This may affect the credibility of the company. b. Problems in customer service which may negate customer confidence in eBay. One if which is the lack of standardized method of payments which can lead to buyer-seller disputes. Despite its acquisition of PayPal, sellers can still enforce their preferred method of payment. Scammers may choose a payment method that offers no buyer protection. Shipping, on the other hand, can also be considered a weakness of eBay. The cost increase brought about by the additional shipping costs may lead to buyers fleeing away to other retail stores for a better deal. c. The EBay model forms a reliance on technology which can result in alienating some demographic groups. Developing nations may not appreciate the online trading platform that is offered by eBay since they have limited access to technology and may encounter some problems in pursuing their transactions. d. System breakdowns could also affect the trading activities of eBay. If the system is unreliable, customers may eventually seek better websites.

Opportunities a. The company has a broad strategic alliance portfolio. Its acquisition of PayPal to support its online auction helped facilitate its payment methods. Another strategic acquisition is the Skype Technologies whose