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EBay By: Dan McLindon Kyle McDaniel Jeremy Smiley Tom Anderson Ray Moorman.

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Presentation on theme: "EBay By: Dan McLindon Kyle McDaniel Jeremy Smiley Tom Anderson Ray Moorman."— Presentation transcript:

1 eBay By: Dan McLindon Kyle McDaniel Jeremy Smiley Tom Anderson Ray Moorman

2 Key Question for eBay How can eBay continue to grow as an online retailer?

3 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

4 eBay Company Overview Founded1995 by Pierre Omidyar as an online auction site to bring buyers and sellers together. Vision “Create a place where people could do business just like the old days – when everyone got to know each other personally, and we all felt we were dealing on a one-to-one basis with individuals we could trust.” Strategic Business Units1. Marketplaces – online auction and direct retail sites 2. Payments – PayPal 3. Communications - Skype Organization Size15,000 employees, revenues of $5.9 billion in 2008

5 eBay Key Acquisitions CompanyYearAnticipated Result Actual Result PayPal2002Allow eBay users to make credit card payments. Success within eBay marketplace as well as adoption by other online retailers (57 million registered active accounts ins 2008). Rent.com1 st quarter 2005Natural extension of online real estate mkt. N/A Shopping.com2 nd quarter 2005Bolster traditional online retailer presence. 50 million visitors per month, world’s 3 rd largest internet shopping site. Skype2006Create synergies with Marketplace SBU, enabling buyers and sellers to communicate better had to take a $900 million writedown on value, synergies not realized. CEO indicates potential sale. StubHub2007Synergies with existing ticket business. Successful expansion into adjacent mkt. Conclusion: eBay’s strategy of growth by acquisition in core and adjacent markets has been hit or miss. Major success was PayPal, which was more of a horizontal integration than an adjacent market.

6 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

7 PEST Analysis for eBay

8 Industry Overview (Supply) Porter’s five forces: Rivalry among existing competitors High Threat of substitute products High Bargaining power of buyers High Threat of new entrants High Bargaining power of suppliers Medium

9 Porter’s Five Forces

10 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

11 Registered & Active eBay Users Reg users continues to grow but Active users has flattened out

12 Core Business: Online Auctions # of online Auctions declining during same time frame as users are increasing

13 eBay’s Business Model – 3 Operating Segments

14 Net Revenues By Segment

15 Forrester Research: 2012 Prediction of Internet Sales B2B predicted to be 10x larger than retail sales

16 Worldwide Internet Users in m of NA was from US.

17 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

18 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

19 Internal Analysis – Core Values Core Values An honest, open environment can bring out the best in people Everyone has something to contribute People are basically good Recognize and respect everyone as a unique individual Treat others the way that you want to be treated Conclusion: eBay’s recent changes to their fee structure and feedback forum go against the company’s core values.

20 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

21 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

22 Management Timeline 1996: Founder Pierre Omidyar and Jeff Skoll run operation alone 1997: Meg Whitman hired as CEO : Omidyar recruits top talent to serve on eBay’s board including Scott Cook and Fred D. Anderson 2008: John Donahoe becomes CEO

23 Whitman vs. Donahoe Meg Whitman Took eBay from 30 employees with $86 million revenue to 15,000 employees with $5.9 billion revenue. Experience includes general manager at Hasbro, brand manager at P&G, CEO of FTD, president of Stride Rite, and SVP of marketing at Walt Disney. BA Economics from Princeton, MBA from Harvard. Approval rating of 75% at time of retirement John Donahoe % of eBay’s revenue generated from Marketplace fell from 72% to 56% during that time Started at eBay in 2005 as president of Marketplaces SBU Experience includes consulting firm Bain & Co. StubHub, eBay express, online advertising Focus in Marketplaces SBU has been growth through acquistion of other retail sites, getting away from simple auction. Approval rating at 22%

24 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

25 SWOT Analysis for Dell Strengths Well established brand. Large number of user accounts. PayPal acquisition to support ebay.com. Ability to collect huge amounts of data on buyers and sellers. Weaknesses New CEO John Donahoe. Company culture becoming stale, employees not fully engaged. Skype acquistion. Fee structure has alienated some sellers. Limitations on feedback hurt ability to create sense of trust and community. Moving away from online auction, into direct retail. No attempt to address issues and costs in shipping. Opportunities Find a new revenue stream with online advertising with Skype. Growth in total online retail means more potential users of PayPal. Other competitors, Overstock.com and uBid.com are struggling, possible acquisition targets. Personalize eBay websites for various countries. Threats Sellers moving to other auction sites, taking the variety of items they supplied to the competition. Possible shift in online shoppers preferences from auction-based to traditional online retailing. Scammers and security issues may drive customers to the competition.

26 Secondary Questions What is eBay’s history? What is happening in eBay’s external environment? How is eBay performing today and what does the future look like? Who are eBay’s competitors and how is their performance in comparison? Does eBay still adhere to the strategies and values on which it was founded? (Note: incl. company culture) Does the eBay brand create a sense of trust, security, and community? Should John Donahoe be the CEO of eBay? What does a SWOT analysis show regarding eBay’s position? How can eBay position itself for future success?

27 Recommendations 1. Fire John Donahoe, leverage strong board of directors to find a replacement that can lead eBay into the future. 2. Focus on restoring the eBay brand name. Make eBay.com a 100% auction site. Use Shopping.com and other possible acquisition targets to compete in traditional online retail space. 3. Revamp fee structure to be friendly to both small and large sellers. Tier the structure based on monthly or annual trade volumes.

28 Recommendations 4. Look into acquiring either or both Overstock.com and uBid.com 5.Introduce “Merchant Rewards” program Allow merchants to earn rewards points per transaction. Rewards can include shipping credits/codes, free boxes, packing supplies.


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