ebay case - 4. What does a strategic group map reveal about...

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4. What does a strategic group map reveal about the positions of the major players in the online auction industry? Is eBay in a good position on the map? Why or why not? Who are eBay’s closest competitors?
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5. What does a SWOT analysis reveal about eBay’s situation? Just how attractive is the company’s situation and position? The most significant challenge facing Donahoe, the CEO of eBay was the slowing growth in eBay’s core business of online auctions. The International Data Corporation (IDC), a leading internet analysis firm, estimated that in 2008 there where approximately 1.4 billion Internet users worldwide and that that number would grow to 1.9 billion users worldwide by 2012. IDC predicted that nearly 1 billon of these users would make purchases online in 2012 for a total of $1.2 trillion. However, it was estimated that business-to-business e-commerce would be 10 times larger, for a total of $12.4 trillion in 2012. Online auctions worked in essentially the same way as traditional auctions, the difference being that the auction process occurred over the Internet instead of a specific geographic location with buyers and sellers physically present. There were three basic categories of online auctions: o Business-to-business auctions, typically involving equipment and surplus merchandise o Business-to-consumer auctions, in which businesses sold goods and services to consumers via the Internet. Many such auctions involved companies interested in selling used or discounted goods, or liquidating unwanted inventory. o Person-to-person auctions, which gate interested sellers and buyers the opportunity to engage in competitive bidding. The mission of eBay was to make it very simple for people to buy and sell goods. In order to sell or bid on goods, users first had to register at the site. Once the registered, users selected both a user name and a password. Unregistered users were able to browse the website but were not permitted to bid on any goods or list any items for auction.
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As discussed in Chapter 4, appraising a company’s resource strengths and weakness and its external opportunities and threats, is commonly known as SWOT analysis. IT provides a good overview of whether the company’s overall situation is fundamentally healthy or unhealthy. Just as important, a first- rate SWOT analysis provides the basis for crafting a strategy that capitalizes on the company’s resources, aims squarely at capturing the company’s best opportunities, and defends against the threats to its well
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This note was uploaded on 11/02/2010 for the course BUSINESS 101 taught by Professor Staff during the Spring '08 term at LA Tech.

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ebay case - 4. What does a strategic group map reveal about...

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