Case-Study: E-Bay thrives in global market place

Explain how eBay use different parts of their site to focus on a certain
activities and how this has contributed to continued growth?

The major different parts of their site to focus on certain activities are that
eBay has comprised two major businesses, 1. The eBay Marketplaces: The
mission for the core eBay business is to ‘create the world’s online
marketplace’. For which eBay seeks to manage the functionality, safety,
ease-of-use and reliability of the trading platform. 2. PayPal: The mission
is to ‘create the new global standard for online payments’. To grow
revenue eBay has acquired and developed other sites such as comparison
site Shopping.com in which you can compare the prices and choose which
is cheaper, and StarHub which is used for event tickets. eBay has also
created vertical formats, such as Classfield, Daily Deals, Fashion, Motors
(vehicles parts and accessories) and Electronics which tells that it is
updated per the Trends and it gives everything you need from
motorcycles parts to computer parts. It also has leading trends and
retailers covering merchandise categories, including apparel, sporting
goods, toys and baby, health and beauty and home. The way this has
contributed to continue growth is that eBay Marketplace is well known for
its core services, which enables sellers to list items for sale on an auction
or fixed-price basis giving buyers the opportunity to bid for and purchase
items of interest. With that according to the SEC filling, eBay summarizes
the core message to define its propositions such as that the buyers has
trust, value, selection, and convivences and as for the sellers they have
access to broad markets, cost effective marketing and distribution, access
to large buyer base, and good conversion rates. Also with that there are
some success factors eBay believes are important to enable it to compete
in its market includes ability to attract buyers and sellers, volume of
transactions and price and selection of goods, customer services, and
brand recognition. It also notes that in the context of its competitors,
other factors it believes are important are community cohesion,
interaction and size; system reliability; reliability of delivery and payment;
website convenience and accessibility; level of service fees; and quality of
search tools. That’s how eBay has continued to grow and it will grow if
they follow their believes in some way. This implies that eBay believes it
has optimized these factors, but its competitors still have opportunities
for improving performance in these areas which will make the market
more competitive.

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 Ebay case study (ebook page 511)

1. Why has eBay succeeded as an online auction marketplace while so many others have
failed?

EBay was one of the first online marketplaces on the world-wide web. It was created as an
online auction website, but it has now became the largest online marketplace that exists.
EBay’s success truly created a pricing revolution by allowing buyers to determine what they
would pay for an item; the result pleases both sides because customers gain control and
receive the best possible price while sellers make good margins due to the site’s efficiency
and wide reach. This is what we know as perceived value pricing: The customer’s value
perception is estimated on the image of the product etc., then the price is determined, and
later this will be observed. Nowadays even companies first check items on eBay before they
estimate the price they will charge for their products.

EBay’s success truly created a pricing revolution by allowing buyers to determine what they
would pay for an item; the result pleases both sides because customers gain control and
receive the best possible price while sellers make good margins due to the site’s efficiency
and wide reach. EBay’s business model is based on connecting individuals who otherwise
would not be connected. EBay’s originators did two things well: they worked hard to make
their Web site a community, and they developed tools to help reinforce trust between
strangers. EBay’s millions of passionate users also have a voice in all major decisions the
company makes through its Voice of the Customer program. The result is that users (eBay’s
customers) feel like owners, and they have taken the initiative to expand the company into
ever-new territory. EBay continues to expand its capabilities to build its community and
connect people around the world by adding services, partnerships, and investments.

Asia is different. Asia is different in culture, in economics, in political systems, people argue.
But the problem is, although Asia country is different from the U.S.
Google/Facebook/Yahoo/eBay succeeded in middle-east. They succeeded in Africa, and they
succeeded in Muslim and Arabic countries. Compared to the economic and culture difference
those regions have with US, the gap between Asia and the U.S. cannot be claimed to be
bigger.

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 2. Evaluate eBay’s fee structure. Is it optimal, or could it be improved? Why? How?

EBay doesn’t sell or buy anything itself. It earns its money by collecting fees: an insertion fee
for each listing plus a final value fee based on the auction or fixed price. This pricing
structure was developed to attract high-volume sellers and deter those who list only a few
low-priced items. This price setting is also known as second degree price discrimination:
eBay charges less to buyers who buy in a larger volume. This pricing strategy is a good way
to attract larger volume buyers, but I think that eBay should not forget the small consumer
who will also buy more and more online. It is not a good idea to charge the small consumers
with high fee’s because this can scare them off to other online marketplaces. For example, if
an item sells for $60.00, the seller pays 8.75 percent on the first $25.00 ($2.19) plus 3.5
percent on the remaining $35.00 ($1.23). Therefore, the final-value fee for the sale is
$3.42.This pricing structure was developed to attract high-volume sellers and deter those who
list only a few low-priced items. This fee structure is optimal.

3. Discuss Donahoe’s vision for eBay. Is moving away from online auctions sustainable
for the company?

Online auction (contextual header)

The online auction, also called E-auction, is an auction that takes place over the internet. E-
bay is one of the largest auction sites. The developer of the site was Pierre Omidyar; he
developed the sitein 1995. Donahoe was the president of the marketplace at eBay from 2005
to 2015. During this period, he had a vision of moving eBay from online auctions.

Discuss Donahoe's vision for eBay

Donahoe's vision for eBay was to bring out the best of the firm to the customers. He had an
idea of increasing the seller's opportunities to sell their products and to give the buyers great
selections and values. Donahoe developed technology partnerships and expanded the online
market to

While the listing fees have been reduced substantially, the overall fees for a listing still
includes what ebay calls a final value fee which is determined by the sales price of the item to
be sold. These fees have been simplified but also increased. However, this change in ebay’s
pricing structure could result in substantially lower cost for a lot ebay’s sellers.

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