eBay: A Case Study Analysis Letter to the CEO

Dear CEO:

The face of ecommerce has been changed by the creation of a global online marketplace. eBay has provided consumers an opportunity to not simply survive, but to thrive. eBay has established a forum for buyers and sellers to untie in and form a community. The online marketplace has established a safe and secure online marketplace where traders can exchange goods and services in a secure environment.

eBay provides an exceptional model for continuing service to consumers. The company is continually expanding and growing into new regions. The online marketplace created by the corporation is one of the most well-known and well trusted globally. eBay is unique in that it provides consumers with a means to explore a variety of products and services without limitation; the community does not focus on the interests of one group vs. another; rather it promotes the best interests of the community at large. Product offerings on eBay range an incredible scope, from artwork to vehicles and services. Many consumers have found such tremendous success in their community relationships that they no longer rely on individual ecommerce websites, but instead market their products and services solely through the online community provided through eBay.

eBay has literally become the global market leader in ecommerce. The reasons for the tremendous success of eBay and its affiliates are explored in greater detail below.

INTRODUCTION

eBay is well-known as the "World's Online Marketplace," a well established community of individuals and businesses, formed to provide ecommerce options for buyers and sellers. eBay provides individuals a secure and safe medium through which safe and trusted trading can occur. At present time, there are thousands of categories for sale on the ecommerce mega website, and trading is accomplished on a local, national and international basis via use of customized sites in varying markets throughout the world (eBay, 2003).

eBay now offers payment solutions through a partnership with Pay Pal, and is continually enabling "global e-commerce for an ever growing online community" (eBay, 2003). eBay has in fact; been so successful their business practices should be modeled by like minded entrepreneurs interested in ensuring customer satisfaction and efficient ecommerce solutions.

The company is looking to increasingly expand its influence in the global marketplace, and is continually setting up new local offices in outlying regions such as Hong Kong. Despite questionable economic conditions, the global marketplace leader has continued to succeed as a provider of a vast array of products and services. eBay has successfully developed a competitive environment for online trading to occur in; competition occurs between buyers and merchants (eBay, 2003). Traditional style retailers are fast jumping on the e-commerce bandwagon, as corporations such as Sears continually add more and more of their product line to the world's online marketplace, with great success (Hill, 2004).

COMPANY BACKGROUND

eBay was founded in September of 1995, a community of individual businesses that have formed a global online marketplace (eBay, 2004). The eBay community consists of millions of registered members who buy, sell and trade services. eBay's mission is stated as follows: "to provide a global trading platform where practically anyone can trade practically anything" (eBay, 2004).

eBay provides consumers with a means to buy and sell items in thousands of categories, from antiques and art to cars, tickets and travel (eBay, 2004). eBay serves local sites in the following countries: Australia, Belgium, Canada, France, Germany, Italy and the United Kingdom to name a few (eBay, 2004).

Pierre Omidyar founded eBay while looking for a way to create an efficient market in an auction format style, which allows person-to-person trading (eBay, 2004). The success of the company is due largely to the simple and easy to understand mechanism that allows buyers and sellers to bid and sell items (eBay, 2004).

eBay was initially launched as a hobby. Meg Whitman joined the company as President and...

Brand building has been in part responsible for some of the success that eBay has experienced. eBay has in fact, reformed the way commerce can be conducted throughout the world.
eBay prides itself on its commitment to building trust between buyers and sellers, the user and eBay (eBay, 2004). The success of the company is due in part to its ability to thus far provide users and community members with a safe and pleasant online shopping and trading experience (eBay, 2004).

eBay prides itself on its "community" which is made up of individuals, small businesses, Fortune 100 companies; all of which are buyers and sellers (eBay, 2004). Part of the "community" mindset rests on the idea that buyers and sellers don't just come to eBay to conduct business; rather they "have fun, shop around, get to know one another and pitch in to help" (eBay, 2004). This is accomplished via discussion and chat boards where members get to know one another and share helpful information regarding trading (eBay, 2004). Both newbie's and old hats are encouraged to participate.

eBay has also enabled consumers to build second businesses; Some sell items on eBay as their business, while others have moved their business to operate on eBay, selling and auctioning goods they might otherwise attempt to sell on private websites (eBay, 2004). eBay offers more exposure than a private website might.

eBay has also established unique programs such as "neighborhood watch" groups, whose function is ensuring that all eBay members follow the company's strict guidelines and etiquette to ensure a flourishing and amicable environment (eBay, 2004). Open and honest communication is critical to the ongoing success of the ecommerce company and community. Many members of eBay have in fact formed relationships offline (eBay, 2004).

eBay has also branched to form the eBay Foundation, which was created in 1998 to help build "thriving communities by supporting targeted initiative in the areas of technology, economic development and cultural entrepreneurship" (eBay, 2004). The mission of the foundation is to invest in the well being and social maintenance of communities. The founding principle of the eBay community is empowerment of the people.

CURRENT SITUATION

eBay continues to be successful as a member of the global online trading commerce leader. The company has developed the first "one-to-one trading Feedback Forum," where users are able to submit comments regarding their experiences and dealings with one another (eBay, 2004). Currently a Safe Harbor customer support team also works in house to ensure a safe community for consumers to operate in (eBay, 2004).

In December of 2003 eBay announced the launch of eBay Hong Kong, which will provide a "localized way for individuals and small businesses in Hong Kong to trade goods and services" (eBay, 2003). In October of 2003 the company outlined their global business strategy for 2003 and 2004. eBay outlined plans for growth within the United States and Internationally, via "new user acquisition, activation and activity (eBay, 2003). The mega ecommerce marketplace is also looking into penetrating new markets and expanding on underutilized markets such as eBay motors (eBay, 2003).

Executives at the company expect that expanded sources of revenue will be realized through the European market and growth in two of the top international market, eBay Germany and United Kingdom (eBay, 2003). The company believes that European operations will very soon grow as large as operations within the U.S. (eBay, 2003).

The company has also recently acquired Pay Pal, and is looking to penetrate other websites and businesses to expand upon the local service it provides to consumers in the United Kingdom and outlying regions (eBay, 2003).

As of October 2003, the company expected net revenues to be $590 million dollars for Quarter 4 or 2003 alone, and full year net revenues to top $2.1 billion (eBay, 2003). The net revenues expected at year end 2004 are expected to approach the $3 billion dollar mark, with quarterly consolidated net…