History of eBay
eBay started life out as Auctionweb, founded by Pierre Omidyar
Brainstorming amongst friends resulted in the overall idea By 1997 maintained its impressive growth but it needed additional funding
Benchmark provided said funding, and more importantly, leadership
Ms. Whitman was installed as CEO and Mr. Swette as COO
First move was to issue an IPO
How does it work?
eBay provides listings and listings support (image hosting etc)
Buyers browse listings for interesting items and place bids
Sellers history is provided
Sellers pay initial fee for listing and then a cut of the final sale
Sellers also have history to buyers history
This in combination with low operating costs results in high profit margins.
Case Study: Question 1
eBay is one of the only major internet-based firms to consistently make a profit from its inception. What is eBay’s business model? Why has it been so successful?
Simple, creative, business model
Works like a flea market. No transaction handling
User Interaction is a key part of its success
Half the companies employees work in customer support
Case Study: Question 1
Not just one way interaction, user feedback is highly
important
Case in point, the June 1999 downtime
User expectations of uptime were revealed
Users expect 100% uptime which eBay at the time was unable to deliver. The management of this incident involved a rather large investment in infrastructure and technology to ensure that eBay was up as much as possible.
The Essay on How does knowledge of the foundations and history of nursing provide a context in which to understand current practice?
In order to be a success in anything, one needs to have a foundation. Children’s foundations are created by their parents. Concrete manmade objects have deep structural foundations. Beliefs such as religious or spiritual beliefs are less tangible. But like nursing, the history and the role models that came before us are the foundations upon which we continue to practice. Through trial and error ...
Case Study: Question 2
Other major websites, like Amazon.com and Yahoo, have entered the auction marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
eBay has maintained its dominant position for two primary reasons
Market savvy
Loyal customer base
Case Study: Question 2
Market Savvy: eBay recognized the fact that its competition would seek to disrupt its growth and
countered with technology. Investments were made in companies such as PayPal (now an almost universally accepted payment system) and Skype Future work? Mobile app by Critical Path Software
Loyal Customer Base: eBay has focused its efforts on satisfying its customers and becoming the dominant trusted online commerce site.
Case Study: Question 3
Why did eBay ban the leaving of negative feedback on sellers? What has been the impact of this change?
The motivation for eBay instituting this ban was a drop in trade volume in 2008
This was identified as being due to a large amount of negative remarks being made by buyers and sellers
The ban was an attempt to stop the retaliatory feedback war that was going on then.
Case Study: Question 3
Issues with Impact: how do you secure transactions or manage fraud? New policies regarding failure to pay Buy it now option can be used to ensure payment Sellers can use reporting hubs
Advantages:
Increase sales
Time saving, PayPal is fully integrated
PayPal Seller Protection
Saving Money
Case Study: Question 4
eBay makes every effort to conceptualize its users as a community (as opposed to, say, ‘customers’ or ‘clients’).
What is the purpose of this conceptual difference and does eBay gain something by doing it?
Increase perceive security
Thus encourage people to buy and sell items using eBay
It also builds safety and trust in the company itself and not just the service
The Research paper on Case Study Questions on eBay
1. Contrast eBay’s original business model with its latest proposed business model. eBay’s original business model was to attract sellers to auction goods, products, and collectibles whether they’re brand new or pre owned. They relied heavily on the sellers to gain their income. Now, eBay’s business model has changed quite a bit. The majority of sellers are now big retailers selling out of season ...
Case Study: Question 4
User community allows for information exchange not just between users but also between users and company
eBay’s community follows five basic values
We believe people are basically good
We believe everyone has something to contribute
We believe that an honest, open environment can bring out the best in people.
We recognize and respect everyone as a unique individual.
We encourage you to treat others the way that you want to be treated.
Case Study: Question 5
eBay has long been a marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set up shop on eBay?
100 million registered members
Most popular shopping destination on the internet
Localized presence in most major markets
All of this provides a healthy customer base
Case Study: Question 5
Trust based system can provide increased popularity if done well
eBay’s shop reduces vendor overhead due to there being no shop
Store goods in warehouse and directly deliver upon order
Simplifies vendors process, saving them money and time
eBay provides easy tracking of sales to manage inventory levels
Case Study: Question 6
Many analysts have argued that by moving to fixed- price sales eBay is risking alienating its traditional community of garage/carboot traders. How can eBay stop becoming just another site for selling?
The auctioning based sale has built eBay
Millions of users were attracted due to it
Thus care must be given to make sure that this section of the userbase does not feel unappreciated
And to make sure that business stays good for them
Case Study: Question 6
Special treatment should be given to them so that the culture can be preserved
Its what makes eBay distinctive
Additional information gathering might be necessary to track usage and needs for traditional traders
Lastly, business model and technology will be required to make sure that eBay doesn’t jut become another online shopping site
Case Study: Question 7
The Research paper on Ebay Case Study 2
One of the world’s most famous dot-coms was founded as AuctionWeb in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar. This was 1995 when the World Wide Web or ‘information superhighway’ as it was known, was just a few years old. On September 12, Pierre Omidyar posts a list of the non-computer related items that are available ...
Given the growth opportunities available toeBay which ones and in which order should itdevelop?
Base everything off of risk and reward
The higher the risk the higher the reward necessary
Order it on investment cost and risk
This naturally creates an order that eBay should take with regards to its growth opportunities
Summary: stick to tried and true first
Case Study: Question 7
Order of Growth:
Product development strategy
Including PayPal
Market penetration
Attraction of additional vendors
Overseas Expansion
Pure Diversification
Extremely risky
