Case Study of eBay

Case Study of eBay: Running the right play in the right country.

A Brief History of eBay:

The history of eBay started in September 1995 and quickly led to the company becoming one of the top retail sites on the Web. It all started in a little living room in San Jose, California. Software developer Pierre Omidyar, 28, had previously worked with Claris developing software for Apple computer.Omidyar started the site to answer a question: what effect would equal access to information have on the marketplace? His first item, a broken laser pointer, sold for around $15. eBay was originally called Auction Web and hosted on the same server as Omidyar's page about the Ebola virus.

With the help of Meg Whitman from Harvard Business School in 1998, eBay was prolonging its success. Meg collected people from her senior staff at Pepsi Co. and Disney to create a management team. Once this experienced team was put together, a vision was put into place. The vision for eBay is that it's in the business of connecting people, not selling those things.

eBay quickly started moving into a group of upscale markets like GM, Disney and Sun. Sun alone has sold $10 million worth of equipment and it now lists between 20 and 150 items per day. eBay has also hosted fine art auctions and auctions of movie and celebrity memorabilia. Controversy generated by users and media coverage helped to create a list of banned items during the late 1990s and early 2000s, including human organs, Nazi memorabilia, ivory and military ordinance. With vast growth and strong branding, eBay prospered, casting a shadow over many lesser-known auction sites. By the time eBay went public in 1998; both Omidyar and Skoll were billionaires.

About 147 million people now use eBay. An Estimated 430,000 people in the United States make all or most of their living by selling on eBay.

eBay Situation analysis

The online shopping has become more and more popular, the high portion of merchant business have been open their business to online, consumers buying over internet is growing rapidly in recent years. Customer demand is broad based and evolving, the target market is large. There are 3 types of online shopping: Business to business. Business to person, person to person. People prefer to shopping online because its convenience, people can process their purchase with an PC at any their convenience time. Online shopping offers people abundant information of products and service. With online shopping, people have optimum opportunity to sequential research information about price, product…they can easily contact with sellers for more information on products or compare the price, company, product … to the similar online shops. The shopping online people will be limited on social interaction and their purchase decision will not be interfered or Influenced by salesman

                                                                                                                                   
The first time shoppers and those shoppers with less online shopping experience may be reluctant to purchase online because of high risks perception such as credit card security concerns, privacy concerns, lack of website credit.

Brief overview of the Case Study of eBay:

Five years ago eBay had virtually no international operations. Today its global business is surging. The company has 31 sites straddling the globe, from Brazil to Germany to China. They generated an estimated $1.1 billion in 2004 sales (46% of eBay's overall trading revenues) and are growing twice as fast as the company's domestic operations. International trading revenues are likely to surpass domestic revenues in 2005. Of eBay's 125 million registered users, roughly half are outside the United States. These international online shoppers buy a garden gnome every six minutes in Germany, a soccer jersey every five minutes in Britain, a bottle of wine every three minutes in France and a skin-care product every 30 seconds in China. What is the reason behind the success of Case Study of eBay.

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Solutions of the Case Study of eBay problems:

1. Why has eBay become such a successful, fast growing, and diverse online marketplace?

Answer: eBay’s successful strategies have been that it charges a low commission fee for items sold.  It can afford to do this primarily because of the vast number and variety of products that it sells.  eBay has become a household name and one that first comes to mind when we think of internet buying or selling.

2. Why do you think of eBay’s playbook concept? Why do they call it a playbook?

Answer: In most cases, playbooks are notebooks or documents that outline and describe a strategy for a certain sport, organization or activity. For example, video game playbooks may contain tricks and tips for passing through certain levels of each game. In the theater arts, a playbook is a book containing the scripts for one or more plays. The term playbook is particularly associated with football.

1. A notebook containing descriptions and diagrams of the plays that a team has practiced (especially an American football team)

2. A book containing the scripts of one or more dramatic plays; "the 1963 playbook leaves out the whole first scene"

3.  A scheme or set of strategies for conducting a business campaign or a political campaign; "they borrowed a page from the playbook of the opposition"

The playbook analogy refers to steps that need to be taken for success, not unlike a sports playbook.  The playbook model allows existing site managers to take the steps necessary in order for that particular group to grow on eBay as fast as they wish.  The playbook describes how to set the right conditions for electronic trading to flourish in a particular area. eBay playbook concept is a great idea. They have all of this knowledge throughout the company that they have collected over time, and making it available for new employees or employees in new markets will greatly improve the learning curve for these new ventures. It makes me think back a few chapters when we discussed knowledge management systems. E-bay has all of this knowledge, a lot of it would be classified as tacit knowledge, and they are using their playbook to make this information available to everyone company wide.

3. Is eBay’s move into the international arena a good long-term strategy? Why or why not?

Answer: eBay’s move into the international arena is a good long-term strategy. The Internet will only continue to expand to more countries throughout the world, which will further expand eBay’s market share. As stated in the article, “Ebay appears to have cracked the code for one of the toughest tasks in the increasingly interconnected global economy: transplanting a hit business concept into places with vastly different cultures and allowing it enough flexibility to adapt to local conditions.

Ebay’s strategy for expanding to new countries is simple and effective: they first focus on Internet marketing and bringing new customers to the site before perfecting detailed category management or implementing Pay pal. eBay is flexible enough to approach each country differently and to tailor the site to that country’s need.

I think that this was definitely a good strategy.  It will enter the company into areas of tremendous profit potential.  The expansion, although challenging, will add to eBay’s product; online buyers and sellers. eBay promoting the new Buyer Protection Program online .these are 

Spinning shield

The first treatment has the shield logo used in the program that spins around (this definitely catches your eye) and then it has some color stripes and reveals the "You're covered by the shield' message you see here:

Bullet points
The second treatment I've seen is more of a bullet pointed list as you see here.
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