Management of Engineering and Technology
eBay (Firm) -- Management, Technology -- Management -- Case studies, Strategic management, eBay (Firm) -- Strategic planning
The Internet has seen its share of success and failures as businesses try to understand how this new medium is going to be used in the 21st century. The eBay corporation has defined itself as not only a player on the Internet but as founders of a new business concept: online bidding and selling for the masses.
Being first to market gives eBay some of the key strengths to make the most of this new medium. The key success factors such as a large customer base and a compelling environment online are allowing eBay to be profitable and be seen as a legitimate business. While large environmental changes in law and technology change the competitive landscape, eBay remains focused on being the largest and best Internet trading site available to a growing group on online users.
However, the low barriers to entry make eBay an easy target for new competitors such as Yahoo and Amzon.com who are currently marketing in eBays space. Brick-and-mortar retailers and auction houses are attempting to understand this new marketplace where helping a housewife in Indiana trade Pez dispensers online is a profitable business plan. In the future, technological change could make any new business plan successful challenging not only eBay but also any business that doesn't properly scan the competitive landscape.
Current strategy says eBay should focus and grow its customer base through marketing and mergers. To date, the growth of eBay has been amazing with 100% + increases in sales from year-to year are expected. However, risks in managing such growth and maintaining the talent that will continue the growth are always on the minds of eBay's management and shareholders. The slowing of this fast growing market will also be of vital concern as the first wave of the Internet revolution washes over the world.
This group recommends that eBay diversify its customer and product base to minimize risks associated with too much reliance on its current product offering. Focusing on how and where the Internet is going to be utilized best will develop new technologies and markets. Alliances with major players inside and outside the internet will allow eBay to market its abilities to new customers as well as give them insight into what the next wave will look like and how to best take advantage of the changing tide of technology. At this point on the growth curve, eBay can become an industry standard or a memory. The execution and deliberate nature of their current and future strategy will determine if they are a Sony or an Atari.
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Compton, Jerry; Freier, Aaron; Patdu, Archie; Phuvasate, Nantachai; and Rostami, Farhad, "eBay Strategic Analysis and Recommendation" (2001). Engineering and Technology Management Student Projects. 1817.