Analyze the marketing environment and the forces shaping eBay’s business over the years. What conclusions can you draw? The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well.
Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its competitors was that eBay allowed consumers to bid on items while the competitors allowed for consumers to buy products at barging prices and no shipping fee. The buying trend of the consumers was leaving the bidding arena and entering the traditional buy now at a bargain price type of consumerism. This is when eBay decided a change is necessary to continue to strive but they did not just want to strive they wanted to soar so they began to innovate and jump into the creation of mobile apps for their company.
EBay did what was necessary to be a “big dog” competitor in their marketing niche, if they continue to be innovative and continue to succeed in being one step ahead of competitors, I have no doubt they will accomplish being the number one ecommerce company. How was the change in the nature of eBay sellers affected the creation of value for buyers? EBay began its business as an auction company. Therefore they grew selling peoples possessions at low moderation volume.
But as time pass and consume behavior changed and new competitors entered the market eBay noticed that their competitors were receiving their goods from whole sellers in bulk. “E-commerce causes structural change of the economy and affects lifestyles and consumption patterns” (Fichter, 2003) and they were also receiving what the consumer was buying. Therefore eBay starts to get sellers that also sell in bulk instead of at low volume. This created an environment where consumers were receiving what they desired and also at higher volume creating profits.
We have to create a marketplace where we’re helping our sellers give our buyers what they want”” (Armstrong, 2013). Giving the customers what they desire created profit and growth for eBay. 3. Do you agree or disagree with CEO Donahoe that eBay’s turnaround strategy is the best way to go? Yes I agree with Donahoe’s decision on his turnaround strategy. Change can be difficult but adapting and innovation is the key to success. “ The “power of mass procurement” can be utilized to ensure that only those systems that meet the defined criteria for sustainability are considered for purchase.
Change is something all companies have to go through and the ones that make the transitions the most smooth are the ones that excel. ” Given that expert projections suggest that mobile commerce will top $119 billion by 2015, being on top of this trend s a great place to be” (Armstrong, 2013). This is exactly what eBay did, they found a new leader and he lead them through new changes and it is paying off. Yes at first there was “growing pains” but their profits are increasing in areas do to their innovation and changes they had to make.
We have gone from turnaround to offensive” (Armstrong, 2013) 4. Based on eBay’s current developments with PayPal and mobile apps, what do you predict the outcome for the company will be in five years? PayPal and mobile apps are both booming now and are only going to get bigger. PayPal creates a secure network for wireless transactions between bank accounts and with ecommerce on a rise with no sign of decline, PayPal is a “Star” “Stars are high–growth, high-share businesses or products.
Mobile apps in general are definitely sky rocketing as well, depending on the individual apps convenience and attributes determines if the actual app will be a hit or miss. “the number of users worldwide with mobile Internet access is projected to rise from 16 million in 2001 to almost 500 million in 2005” (Fichter, 2003). Based on how this case explained eBay’s new app it sounds like it will be a hit for those who shop online, due to its convenience and suave. With these two things helping push eBay upward I can only predict in five years positive things for eBay to come. But the way business goes its always a gamble, there may be a product, company, or app more desirable than the one eBay produces and this is just the way business occurs.