...Summary of the case facts The eBay auction site was started in 1995 under the name Auction web. Auction Web made no guarantees; there were no fees, no security, and very few items. The site changed drastically when the creator posted the site listing on the National Center for Supercomputing Applications’ What’s Cool list. After the posting on the list, traffic began to increase and the business turned a profit in 1996. By 1998 the Auction Web site had taken on the name eBay and it went public. Constant growth in the following years has made eBay the gateway for many shoppers, collectors, and sellers to all exchange consideration. In 2000, users listed more than 265 million items on the site, a 104% increase from 1999. Ebay provides a portal for peer-to-peer selling where the seller can set a fixed price, using the “buy it now” feature, or they can opt to have the item available to the highest bidder. The seller can also set a “reserve price” so they can be exempt from fulfilling the order if the bidding does not meet their desired minimum revenue. In a time where the economy has become weak and many retail segments have suffered losses, eBay has continued to grow at a rapid rate. Unlike in a retail store, regardless of the item, all buyers and sellers must be eighteen to bid on or list items. The reason for this is that each transaction is basically nothing more than a contract between two private parties. The buyer and seller agree upon and arrange for payment and shipping...
Words: 1398 - Pages: 6
...sell their own personal items to anyone with internet access at any time. eBay is full of much strength such as their ability to globalize their brand. This is also one of their main weaknesses. Since eBay is an online business, anyone with internet can access the website. While they have the potential to reach out to everyone, not everyone uses the internet. One of the issues eBay faces is that the internet usage in Asia is very low especially considering over half the population resides there. E commerce was growing everywhere which definitely helps eBay’s business. One of eBay’s great accomplishments is their ability to acquire several other successful businesses. They don’t just take over random businesses because they can; they acquire businesses that can help them out with their own business. For example, PayPal goes hand in hand with the type of business eBay runs. It gives users a more secure way to use their website which consumers definitely appreciate. Along with their feedback forum which allows consumers to voice their opinions, the fact that both sides (buys and sellers) feed off one another and cause the popularity of the other side to rise really makes consumers feel like they are a part of the business. This is part of what makes eBay such a great success. Although they have their share of challenges with globalization and competition, they do so many things right. The idea of eBay originated from French born Pierre Omidyar, a computer science graduate from...
Words: 2598 - Pages: 11
...EBay and the Existence of Firms As a global online auction market, eBay provides people a new way to do online shopping, not only by purchasing a product at a certain price, but also by the unique auction format. Through auction procedure, sellers can earn more than the base price in their mind and buyers can bid the price up to the most they can afford. By setting up a convenient platform to gather sellers and buyers together, eBay reduces lots of searching costs as other websites expend. However, there are still two major problems which can lead to transaction costs for an unregulated online auction market: Adverse selection and moral hazard. Adverse selection occurs when information asymmetries appear before both sides signing a contract. In some cases, sellers exaggerate the value of the product or even build some fake bids in order to set a higher price. Under this situation, buyers have no idea of what the item’s condition truly is and may take the risk of buying a disappointing product. On the other hand, moral hazard takes place when a buyer doesn’t want to pay and break the contract after receiving the products or seller refuses to ship items after money has already been paid. Through unregulated online auction market, it’s hard to write a complete contract between sellers and buyers, people on both sides have the opportunity to break the rules. In order to overcome these problems and reduce unpredictable transaction cost, eBay did a lot to enhance auction’s...
Words: 660 - Pages: 3
...EBAY HISTORY eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries. eBay expanded from its original "set-time" auction format to include "Buy It Now" standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji, now eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal) and other services. The online auction website was founded as AuctionWeb in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar as part of a larger personal site. Pierre Omidyar, an entrepreneur, was just 28 when he sat down over a long holiday weekend to write the original computer code for what eventually became an Internet megabrand. The brand has grown tremendously over the decade or so since its conception. Meg Whitman was hired as eBay President and CEO in March 1998. At the time, the company had 30 employees, half a million users, and revenues of $4.7 million in the United States. eBay went public on September 21, 1998, and Omidyar became an instant billionaire. eBay's target share price of $18 was all but ignored as the price...
Words: 1438 - Pages: 6
...Case Study: eBay eBay owns one of the world’s largest online auction platforms. In 2008, the company operated in 39 countries with 276M registered users worldwide. In 2007, the total value of all successfully closed items was $59B with an average $2,039 worth of goods trading on the website every second. eBay makes their money by charging a small fee to sellers who list their product along with a description of the item on the website. Items can be sold at fixed price or by auction. After a bidder wins an auction or a buyer purchases a product, sellers and buyers settle their transactions via PayPal, a money transferring service, also owned by eBay. eBay’s Feedback Forum is where eBay users leave comments about each others buying and selling experiences. Buyers can learn about other buyers’ experience with a particular seller buy viewing his rating and reviews before buying from that individual. Sellers can also vet buyers in the same way. Users with the enough positive ratings receive colored stars, which indicate the highest rating. eBay participants sign user agreements that specify the trading rules and expectations. eBay’s staff investigate alleged misuses such as fraud, trading offenses and illegally listed items. Resolutions include banning a user from future trading on eBay. How eBay Creates Value Value creation is the primary objective of any firm. Value creation occurs when there is additional value being added to the bottom line of a business a result of...
Words: 1167 - Pages: 5
...Key Strategic Decisions: Several aspects of eBay have been specifically designed to support an almost freestanding economy (2000; 2003). eBay built a free market. As a facilitator, users are allowed to decide what they want to sell, encouraging continuous growth. The users or citizens are the ones who control the direction of the site. eBay created a legal system that promotes self-governance. The auction site devised a feedback forum to let users rate one another to discourage fraud. The users are constantly educated; eBay teaches people how to use the site. eBay also has its own banking system. eBay has been bounded by two things: a clear mission to be the world's largest person-to-person online auction company, and a focused strategy with five key elements expanding the user base, strengthening the eBay brand, broadening the trading platform by increasing product categories and promoting new ones, Fostering community affinity and enhancing site features and functionality. The arrival of Meg Whitman ( President and CEO of eBay since 1998) marked a watershed in the effort to build brand recognition at eBay. The company's early growth relied strictly on word of mouth. But as an old hand at consumer product marketing, Whitman made branding one of her first initiatives. In a series of meetings with the senior management team, she broke the problem into two parts. The first was clarifying what eBay stood for. In their judgment, it was a personal trading...
Words: 780 - Pages: 4
...If someone wanted to sell or buy an item, they would most likely visit one of their favorite e-commerce website, most notably eBay. eBay.com has become the world’s largest online marketplace, that enable individuals to buy and sell practically anything including books, antiques, collectibles, electronics, home furnishing, sporting goods and memorabilia, and move and DVDs to nearly every country on earth (Trites &Bortiz, 2003). It operates on a global scale, with its headquarter located in San Jose, California. It was founded in September 1995 by Pierre Omidyar as one of his hobbies, yet to realize he developed a revolutionary new ecommerce model (Trites &Bortiz, 2003). eBay did not follow in the same stepping stones as other ecommerce did at the time. At the time of its establishment, eBay acted as an intermediary between buyers and sellers, unlike others who focused on selling goods and services (Trites &Bortiz, 2003). Since it first started, eBay has achieved numerous milestones for its time duration in the business. It has an established community consisting of tens of millions of registered from every corner of the earth (eBay, 2013). In addition, eBay is globalized to operate localized sites in over 20 countries, including Canada, Australia, Germany, Japan, the United Kingdom, and India (eBay, 2013). eBay was successful during its establishment due to the fact it was the ‘right idea at the right time’, combining the business of auctioning through the means of the internet...
Words: 1455 - Pages: 6
...How has eBay refined OAMs? List 2-3 specific website features that eBay adds that are not found on unregulated OAMs that merely link buyers and sellers? Be specific. When eBay started its business in 1995, online auction got new head starts in many ways. EBay has refined its online auction model by creating a global platform, a model that connects to people, person to person marketplace on the Internet. Before eBay, auctions were limited to garage sales, collectibles shows, flea markets and in-store sales. Some of the “COOL” that makes eBay stand out are it’s varied buying formats and secure and more accessible payment methods. Some of them being Auction-style format which provides options of bidding. Moreover, eBay also features an option called Buy it Now which literally lets the customer buy the product right away without waiting for a long time. Other feature that’s not seen in unregulated OAMs is Motor classifieds, which basically lets a customer find a vehicle that they choose so they can see it online before they purchase it. 3. Two unique features that add value to OAMs, I think will include more secure payment systems and reliable ordering. EBay has been uniquely able to partner up with Banks like Wells Fargo to enhance their payment processing system. For a global payment method, PayPal has always been an integral part of eBay. EBay is a registered online business model unlike other unregulated websites. It features real product and real seller on the other end...
Words: 332 - Pages: 2
...eBay Inc. is an American multinational internet consumer-to-consumer corporation, headquartered in San Jose, California. It was founded in 1995, and became a notable success story of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries. The company manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Case: The Globalization of eBay International Business the Globalization of eBay Case study I. Case Background eBay Inc. is an American multinational internet consumer-to-consumer corporation, headquartered in San Jose, California. It was founded in 1995, and became a notable success story of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries. The company manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. (Wikipedia) Operations eBay created an efficient distribution system that demanded virtually little supervision. Sellers paid eBay for the opportunity to design, set up, monitor, and supervise their particular auctions while buyers used eBay's software to search for products and place bids. After the auction clock ran out, the seller contacted the winning bidder to negotiate payment and shipping terms. For this matchmaking service, eBay charges between...
Words: 2061 - Pages: 9
...that have caused eBay to struggle in Japan, China, and other Asian markets to determine if these mistakes could have been avoided. One factor that has made eBay to struggle in Asian countries was its failure to recognize the differences that existed between the Asian markets and market users and the American markets and markets users. This lack of understanding made eBay to use the strategies it had used in the US to enter the Japanese and the American markets. At the initial launch in Japan eBay set out to use collectibles this strategy was successful in the US market. This seemed to have failed as the Japanese user seemed to have preferred new products. The second mistake was eBay strategy to charge commission on each transaction as it did in the US. The Japanese market did not favor this as they were not used to pay commission or monthly charges. The second factor that made eBay to struggle in the Asian markets is its strategy of attempting to dominate the market by crashing all competition including the local. This proved to be a wrong kind of strategy as local competitors had a competitive edge over eBay. This was demonstrated by eBay earlier battle with Alibaba for the control of the Chinese market which eBay ended up losing badly to the local players. Due to the differences in market and business environments in Asia local companies that are used to these environments usually find an edge over foreign entrants and strategies such as that used by eBay have high probabilities...
Words: 905 - Pages: 4
...October 2 2013 CASE ASSIGNMENT: eBay: Creating Customers on the Move 1. Which stages of the consumer decision-making process are affected most by comparison shopping on mobile platforms? Explain. 1. All stages can be considered affected less or more. In my opinion, most affected stages are: Internal information gathering – eBay application provides consumer with basic information like brand name, color, price, size, location, shipping cost, etc. After comparing this information consumer supposedly will make a rough choice to get more info or refine search by certain criteria. Evaluation of alternatives – is the most affected and difficult stage for consumer. At this point all options needs to be compared: one seller can be more competitive pricewise but shipping will take longer time due to location of the product, another has a better feedback and accepts every known method of payment but has lower amount of days after product will be accepted back or do not accept returns, etc. Purchase of product also can be considered as affected stage. Before actual payment, some sellers can only ask for desired quantity and get consumer directly to the payment page but some can ask for available coupons or gift cards. However, I think this stage has very limited possibilities compared to full site version. 2. Based on the goal expressed by Steve Yancovich, which stage of the consumer decision-making process is eBay trying to influence? How are they doing so? 2. I think eBay trying to influence...
Words: 308 - Pages: 2
...Ebay Case Study Skill Building One Joyce W. Stevens Oklahoma Wesleyan University Ebay Case Study Skill Building One 1. How does eBay create value? eBay creates value by bringing together buyers and sellers. Although, eBay has created a virtual or online market place in an organized and safe way where people can buy and sell wide variety of goods. Thus, eBay has provided a kind of platform for all those people who hate to go out in the physical marketplace and love to shop in the convenience of their living rooms. eBay ensures that all transactions are carried out in a fair way and offers reasonable safety for both, the buyer as well as the seller. 2. What potential contracting problems exist on eBay? Potential contracting problems which exists on eBay are misuse of online marketplace in the form of trading on banned items, selling of damaged products, frauds in the form of non payment of goods after buying or non delivery of goods after selling etc. Also, since it is an online marketplace, it is difficult to judge the authenticity of buyers and sellers in advance. Another potential contracting problem is transport of goods from one place to another. eBay does not have in house transportation system and has to rely on the services which the sellers chose to deliver. 3. How does eBay address these problems? eBay addresses these problems by insuring the buyers for non delivery/ damaged delivery of products, establishment of in house fraud prevention and escrow services...
Words: 794 - Pages: 4
...Case studY chapter 6 EBAY © iStockphoto.com/Bill Noll / © iStockphoto.com/OSTILL Creating Customers on the Move The advent of mobile commerce (m-commerce) has begun to create significant changes in the way consumers make purchasing decisions. The introduction of online shopping first began to draw customers away from brickand-mortar retailers, changing the location of where they made their purchases. The use of mobile devices has expanded the location of purchase decisions even further, so now consumers can make purchases from almost anywhere, so long as they have a mobile device with them. It also has leveled the playing field for consumers in many cases, as it allows them to comparison shop on prices of products that they might find in stores. In 2009, the mobile commerce market generated $18.3 billion in total revenue. By 2015 it’s projected to reach over $119 billion. When it comes to m-commerce, eBay has jumped in with both feet. It is estimated to hold about 3.3 percent of m-commerce, compared to online retailer Amazon’s 1.5 percent. It also was estimated to sell $1.5 billion in goods via m-commerce in 2010, compared to $600 million in 2009. eBay launched its first mobile application for the iPhone in July 2008 and has since produced 14 apps, including eBay Selling, StubHub, Deals, and Fashion. eBay’s core iPhone application has been downloaded 14 million times, and its entire stable of apps has seen over 30 million downloads worldwide...
Words: 970 - Pages: 4
...eBay: “The world’s largest online marketplace”- A Case Study J.Gopalkrishnan* V.K Gupta** Abstract eBay, Inc. is the largest and most popular marketplace on the Internet, allowing members to buy and sell almost anything. Launched in 1995, 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’s online payment service, called PayPal, enables transactions nearly anywhere in the world. eBay proclaims “trust” between buyers and sellers as the key to the success of the marketplace. eBay is the “The world’s Online Marketplace”, which is its positioning statement, and it means many things about the company’s identity. It enables trade on local, national and international basis, with a diverse and passionate community of individuals and small businesses. eBay offers an online platform where millions of items are traded each day. The objective at eBay was to “to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. The company market capitalization had surpassed that of even Amazon.com, making it the “world’s most valuable Internet retailer”. Pierre Omidyar, founder, is focused to achieve excellence in strategic management for improving the company’s strategy, sustaining the company’s growth and business performance, and potentially expanding from online auctions into general “etailing”...
Words: 3943 - Pages: 16
...What eBay has Done For The E-commerce Business? CITN120-Introduction to Networking If you’re a consumer looking to buy or sell an item or maybe catch a fantastic bargain, you have probably heard of eBay. The company’s founder Pierre Omidyar started his journey on September 3, 1995, as a simple home page and a broken laser pointer and created something that had never been done before. Pierre simply intended the listing on his web page of a broken laser pointer to be a test more than a serious offer to sell at auction. He was shocked when he received a response, “I’m a collector of broken laser pointers,” and sold the item for $14.83. When Pierre received this answer back he knew that he had created something big and transitioned from one of commerce, buying and selling things, to one of e-commerce, connecting people around the world together over the internet. In 1996 Pierre and his hand picked business team set out with their vision, which was to create the first online auction website for consumers to buy and sell their items. Since the start up, eBay has become the market leader and pioneer in the on-line auction industry and its brand name has become synonymous with e-commerce. eBay doesn’t actually sell any goods itself, it is simply a meeting place where the merchandise is sold and delivered by third party sellers that are not employed in any way by eBay. This unique e-commerce business gives sellers a place to reach buyers, and gives buyers access to the world’s...
Words: 2424 - Pages: 10
