MKTG300 Final Quiz
- Analyze the marketing environment and the forces shaping eBay’s business over the years.
The marketing environment of Ebay can be analyzed on the basis of a SWOT analysis that identifies the external opportubities and threats and the internal strengths and weaknesses of the company.
SWOT Analysis of Ebay
Strengths:
- World’s largest marketplace: Ebay is positioned as the world’s largest marketplace that provides a platform to buyers and sellers to sell and buy goods on the website. Ebay is a website where anything can be bought or sold.
- High Brand Recognition: Ebay is a well established brand that is recognized by consumers in different parts of the world. The high brand recognition makes it much easier for Ebay to connect with the consumers for its brand promotions.
- Large Customer Base: Ebay has a large customer base of website users that are registered with the website and visit the website often. Ebay can use this customer base for targeted brand promotions and engage with the users.
- Acquisition of Paypal: Ebay acquired Paypal which is a leading online funds transfer platform which is popular among the customers as a trusted payment transfer option. The joint valuation of Ebay and Paypal has further added to the financial strength of the company .
Weaknesses
- High Listing Fees: Ebay charges its sellers with a listing fees that is depenent on the actual sales price of the products that are sold by the seller on Ebay. The company also charges higher fees from less frequent users. This is a weakness of Ebay as its competitors such as Alibaba.com do not charge any fees from the sellers for listing.
- Online Safety: Ebay has been blamed for security issues of its website as the company reported that sensitive customer data was compromised on the website due to unauthorized access of intruders. Ebay should work on strengthening the security of the website to provide a safe shopping experience to the customers.
- System Breakdowns: Ebay has witnessed frequent system breakdowns that affect the functionality of the website and also cause inconvenience to the users.
Opportunities
- Growing mobile users: The increasing number of smartphone users in the different parts of the world are an opportunity for Ebay as it can take advantage of the growth of mobile commerce through mobile apps and mobile internet on smartphones.
- Emerging economies: The emerging economies of Asia such as India provide tremendous growth potential for Ebay as the purchasing power of the middle class is growing in these regions and the economic growth is also higher.
- Product Diversification: Ebay can diversify its product portfolio through acquisition of technologically advanced companies and applications that will fuel the growth of the company in the future.
Threats
- Intensity of Competition: Ebay faces tough competition from companies such as Alibaba.com and Amazon.com that have substantially grown in market share and customer base over the past few years. The declining revenue of Ebay and the increasing revenue of competitors is a threat to the company. The market cap of Alibaba.com is much higher than that of Ebay and Amazon .
- Data Security: Ebay needs to address the security issues of the website so as to offer a secure shopping experience to its customers. The incidents of data breach negatively affect the trust of the customers in the company.
- How has the change in the nature of eBay sellers affected the creation of value for buyers?
The change in the nature of eBay sellers has positively affected the creation of value for buyers. The fixed price sellers offer high quality and low priced products to the buyers that allows the buyers to choose from a wide range of sellers on Ebay and select the one that offers them best price and value for money.
- Do you agree or disagree with CEO Donahoe that eBay’s current strategy doesn’t mean that certain sellers will lose? Explain.
I agree with CEO Donahoe that Ebay’c current strategy does not imply loss for certain sellers as it is the buyers that are the end consumers of the products sold on ebay and their experience with the sellers is an accurate assessment of the performance of the buyers. Ebay follows a seller evaluation strategy to rate the performance of the sellers on the basis of the customer feedback system. The sellers that provide good quality products and prompt services such as free shipping to the buyers are expected to perform well in the organization.
- Is eBay doing the right thing by sticking to its current strategy? What changes, if any, would you recommend to Donahoe?
Ebay is doing the right thing by sticking to its current strategy However Donahoe needs to clearly formulate and communicate the objectives of the turnaround strategy to the stakeholders. The organization should focus on strengthening its relationships with the existing partners and seller and also expand on building new relationships with the new partners. The main objective of the company should be to provide a superior experience to the customers (buyers) and also ensure that the interests of the stakeholders (including the sellers) are well protected.
Works Cited
Bloomberg. Alibaba market cap exceeds those of Amazon and eBay combined. 21 September 2014. http://www.business-standard.com/article/companies/alibaba-market-cap-exceeds-those-of-amazon-and-ebay-combined-114092000856_1.html. 2 December 2014.
Ebay. THE VALUE OF PAYPAL AND EBAY TOGETHER. 22 January 2014. http://blog.ebay.com/the-value-of-paypal-and-ebay-together/. 2 December 2014.
