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SWOT Analysis of eBay

Uploaded by dylanb98 on Oct 31, 2011

An examination of eBay’s strengths, weaknesses, opportunities and threats, with a discussion of the company’s position as a middleman, or broker, being one of its greatest strengths due to the fact that it involves much lower costs than a traditional e-commerce business.
Ebay was founded by Pierre Omidyar in 1995 as a marketplace for the sale of goods and services for individuals. Not only was it a novel idea, but it was utilizing an innovative technology – the Internet. E-commerce had not yet been established as an acceptable and understandable method of doing business at that time.
Today, one can find more than 18,000 categories of merchandise on ebay, including big-ticket items such as cars and real estate. Ebay is not so much an e-commerce site as it is a trading community, where buyers are sellers find one another and conduct transactions. Browsing and bidding is free, but ebay charges a fee for listing an item for sale as well as a fee for items that are sold. Additional fees are charged for special features in listings, such as bold listings or extra photographs (the first two are free). Ebay currently has approximately 14,000 registered users around the world.
By far, ebay’s greatest strength is that it was first – the first online auction site – an entirely new concept in commerce. Omidyar jumped in with both feet on the new technology bandwagon, opening up the world to the concept of electronic commerce. His decision to hire CEO and President Meg Whitman turned out to be a jewel of a choice, as Whitman herself is another of ebay’s biggest strengths. Building on her experience with Hasbro and Stride Rite, as well as her Harvard business education, Whitman has led ebay through a number of reinventions to the mammoth site it is today. The company earned a net income of more than $90 million in 2001, which was a 73 percent increase from the previous year. Ebay is hot, and its here to stay.
Whitman’s strategy has been rapid growth through adding new categories.
Yet another strength is that ebay is in the business of connecting people, not selling things. Therefore, it encounters no inventory or distribution costs whatsoever, which is highly unusual for e-commerce businesses. Ebay is only a broker, never actually taking possession of any merchandise, which places the...

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Uploaded by:   dylanb98

Date:   10/31/2011

Category:   Business

Length:   6 pages (1,361 words)

Views:   2614

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