I.

Statement of the Problem

How sustainable was eBay’s original advantage in the auction market? 

II. Strength
 One of the Largest Internet Marketplace
 Economies of Scale
 Localization
 Payment System
 Brand System

III. Weaknesses
 High Fees
 No further growth strategy
 Limited emphasis on innovation
 Limited flexibility to market variations
 Imitable business model

IV. Opportunities
 Growing number of online mobile shoppers.
 Increase services and product portfolio through acquisition.
 Open more online stores in other countries.
 Become a retailer.

V. Threats
 Online security.
 Regional low-cost online retailers.
 Increasing competition from Amazon and other competitors.
 Exchange rates
  Strong competition
 Imitation
 Potential industry disruption through new technologies

VI. Conclusion
eBay Inc.’s strong brand is one of its major competitive advantages. Because of its
popularity, the company’s brand is easily recognizable among consumers and merchants.
This internal strategic factor makes the company competitive against other e-commerce
firms. Even though results-oriented excellence is the focus of eBay’s organizational
culture, innovation is not the top priority of the company. This internal factor is a
weakness that limits the growth and competitiveness of the global e-commerce
corporation because innovation is a major growth driver in firms with trading websites or
operations chiefly through the internet. eBay has an opportunity to expand its online
operations to other markets. Currently, the company’s marketplace, classifieds, and ticket
exchange revenues are generated mainly in the United States and some European
markets. This external strategic factor can increase revenues and spread risk among more
varied e-commerce markets. In relation, the company has an opportunity to improve its
innovation for competitiveness through product development. Strong competition is a
major threat for all companies. For example, the company faces rivalry with big e-
commerce companies like Amazon, as well as smaller ones. This external strategic factor
is a growth barrier in the industry environment. On the other hand, imitation is a threat
because other firms or new entrants can copy eBay’s business model using available
technologies for website operations. Also, the company faces potential industry
disruption, which is based on technological trends. This external factor can drastically
change the company’s business performance. Managers must ensure continuous
improvement of competitive advantages to address the external strategic factors in this
aspect of the SWOT analysis.