Strategic Analysis of eBay Inc.

Strategic Analysis of eBay Inc. 1
Strategic Analysis of eBay Inc.
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Strategic Analysis of eBay Inc. 2
Executive Summary.
eBay is an international e-commerce that facilitates business-to-consumer and consumer-
to-consumer sales primary through its site. The company manages its website, an online auction,
and its shopping website hence availing people the opportunity to sell and purchase a wide range
of goods and services globally. This essay will critically examine and demonstrate the business
environment and flexibility in strategic management of eBay based on three separated segments.
Furthermore, this report will also provide a significant information on external and internal of
company’s assessment, proficiency and culture.

Strategic Analysis of eBay Inc. 3
Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
External environment analysis.........................................................................................................5
PESTEL analysis..........................................................................................................................5
Industry analysis..............................................................................................................................7
Porters five forces model.............................................................................................................7
Internal Analysis..............................................................................................................................9
SWOT matrix................................................................................................................................9
VRIO analysis................................................................................................................................11
Key directions for future growth of eBay using Ansoff’s Matrix.................................................13
Recommendations and conclusion................................................................................................14
References:....................................................................................................................................15

Strategic Analysis of eBay Inc. 4
Introduction.
eBay, the notable dot-com bubble, after its incorporation in 1995, the organisation has
been continuously redesigned itself in order to go on with its vision, “to be the world’s favourite
destination for discovering great value and unique selection”. By collectively connecting
millions of global buyers and sellers, eBay is one of the leading global e-commerce
marketplaces. eBay is considered the most successful online action and currently has over
twenty-five million sellers, eleven billion live listings, and over $8.98 billion in sales (Wardini,
2018). The success is attributed to various factors. One, feedback. eBay’s ability to provide
feedback to on its services and products has allowed the company enjoy tremendous success
since users are able to post comments, give ratings, and send messages regarding an item. This
helps evaluate a seller hence giving the buyer a better purchasing experience.
Two, huge market. Since the company has a massive global presence, the audience is not
constrained by distance since buyers and sellers are able to make purchases from anywhere in the
world (Wardini, 2018). Three, buyer protection. Since buyers and sellers have access to payment
services such as PayPal, the buyer’s money is protected. This gives them an assurance of
receiving their products if they purchase and refunds if the transactions do not go through.
Lastly, competitive pricing. The competitive prices allow customers to shop more with eBay
majorly due to the bargains and discounts offered in the site. All this success is shouldered on the
corporate business strategies adopted by eBay.
eBay’s corporate business strategies have experienced a shift over the years since the
company has moved from a listings-based to a product-based format as way of service
differentiation. In pursuit of this strategy, eBay has had to collect product related data from
sellers in order to modify user experience with the endgame of designing machine learning
capabilities that process a global catalogue of items (Dudovskiy, 2016). This means that eBay
corporate business strategy is shifting the image and role of the company from an e-commerce
facilitator into an online retailer. to an online retailer. However, eBay is finding it challenging to
compete with Amazon due to Amazon’s competency in delivery of goods and high level of cost
effectiveness.
Analysing eBay’s corporate strategy will help understand the organizations business
environment, areas that may need improvement as well as determine if the corporate business