EBay Case study

EBay's business is the global online marketplace. The business has made a podium for sale of goods and services to the community of persons and businesses. It receives millions of products in a day for sale and fixes the trading prices on local, national and international basis. It has also claimed over hundreds of millions members who have registered with the firm, has employed over 15000 employees and estimated returns are over $8 billion EBay's is attractive model because it is a really virtual business that sells advertising space. The transactions are conducted through software rather than people. It is designed to serve that purpose. EBay's business has invested on software that has designing on the web server. Additionally, the customers, both the buyers and the sellers, can operate the software for business transactions. This is what has made EBay succeeded in the market. Sellers do the task of setting up their own auction while the buyers use the EBay software to lay their price or bids.

After these transactions, delivery of items and settlement of payments are organized between the sellers and the buyers. EBay then intervene taking between 17 and 18 percent of the transaction's commission for the use of its software (Blacharkis, 2007). EBay holds no stock and its intervention in the transaction between the buyer and the seller is actually minimal in terms of charges. The transaction between the buyer and the seller is confidential through the use of EBay software. How does PayPal enhance this business model? PayPal is a leading provider of internet payments in the world. EBay's business purchased PayPal which was also an online Business, auction Website, in the year 2002. PayPal and EBay firm are merely complimentary implying that they perform the same functions but do not depend on each other. PayPal has enhanced EBay's business model by permitting customers to register with the company their credit card or bank accounts' details, so that they can purchase items online. This is done by entering an email and bank account details to perform the other tasks. The performance of this software relies on the network effect there it does not have to depend on people, thus making it reliable (Blacharkis, 2007). Why does one element of eBay's strategy involve market dominance? EBay's business has laid down strategies to assist in achieving its sets goals and objectives. This has given the company a chance to dominate online businesses worldwide. Before EBay has absorbed PayPal Company, sellers were the only customers to the company who were the main generators of the revenue. EBay dominance in the market has been achieved through use of PayPal which has turned the buyers in the customers. For instance, EBay also dominates the global market of online Businesses by having a share for each new PayPal registration. When the buyer and the seller use the PayPal account to settle their transactions, EBay has a share in that transaction, hence dominant in the market (Blacharkis, 2007). Although EBay seems have achieved a lot and dominating the market, it has a lot of challenges that are pulling it back. For instance, it had failed to expand in Taiwan and Japan companies. It has also a challenge of competition from other firms performing the similar online marketing like Yahoo and Trade Me companies who also seem to dominate online Auction site. References:

'Blacharkis, D., (2007). EBay's secrects Revealved: the Insiders Guide to Advertising, Marketing. And promoting EBay stores. New York: Atlantic Publishing.

Comments? Questions? Email Here

© HowtoAdvice.com