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  • Essay / Ebay Growth Case Study - 1059

    (Appendices not included) eBay should continue to focus on growth and continue to fight competition from rival companies. eBay has dominated the U.S. online auction market since its founding in 1996. Current market conditions are changing and eBay must position itself for continued growth. eBay has achieved most of its key success factors shown in Exhibit 1, but must continue to focus on them. to support its current growth. eBay's two fundamental challenges include continued growth and an evolving business model. GrowtheBay's growth so far has been exceptional, but with market conditions slowing, eBay needs to attract new customers to continue its current growth. eBay has maintained a competitive advantage in the online auction market, but must now transfer this success to further expansion into international markets. One of eBay's weaknesses according to the SWOT analysis (Appendix 2) is that eBay did not prepare for the slowdown in the US market. With Yahoo exiting some international markets, this leaves a larger market segment for eBay to absorb. LeBay is expected to gain a competitive advantage over other online retail companies by continuing to expand into international markets. The emergence of Asian and European markets (due to increased access to the Internet) creates a good opportunity for eBay to establish itself as the global leader in online retail. By taking advantage of opportunities to capture the market early on, it will be easier for eBay to introduce new products for continued growth. y/eBay should also consider expanding some of its key categories to capture greater market share in this sector. Some of eBay's top categories only capture 1-5% of the total market for that good. For example, eBay's largest auction category (eBay Motors) has less than 1 percent market share in the $7.5 billion auto industry. This represents a significant growth opportunity that eBay can capitalize on. eBay would also take its next two largest categories (consumer electronics and computers) and combine them to create eBay Electronics, which would be a separate site through eBay, similar to eBay Motors. By creating eBayElectronics, eBay can focus more on its most popular categories to offer greater product selection and information about the electronic products it sells. Evolving Business Model Another weakness that eBay showed in the attached SWOT analysis (Appendix 2) is that the company has little experience with fixed-price sales. For eBay to sustain its success, it eventually needs to offer more fixed-price sales to better compete with Amazon.com and Yahoo. eBay must shift its competitive edge in online auctions to fixed-price sales.