CASE10_eBay - eBay Inc.: Bidding for the Future...

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eBay Inc.: Bidding for the Future INTRODUCTION This case presents a dynamic and complex external environment within which John Donahoe, President and CEO of eBay Inc., must discover new competitive advantages to regain market share and rejuvenate growth. During and since the successful reign of Christine Whitman, the company has aggressively engaged in acquisition and alliance strategies which have helped the company to achieve substantial growth. However, eBay's recent growth rate has slowed, and revenues have slipped for the first time in the company's history. eBay is losing market share to key innovative competitors and faces a host of strategic issues which require Donahoe's immediate attention. What are the greatest opportunities and threats existing in eBay's current external environment? What are the company's greatest strengths and weaknesses? Does eBay's stated purpose provide adequate direction for making the important decisions which the company presently faces? eBay's existing strategy is shifting the company from its core users and competencies. Given the situation, is this the right thing to do? How should eBay handle the following issues: In what ways can the company differentiate itself from the competitive pack of online marketplace giants and expanding retail brands? How can an effective corporate strategy help the company achieve its objectives? What should Donahoe do with Skype? Does fit with eBay's portfolio of businesses? What role does international expansion play in meeting eBay's goals? ANALYSIS External Environment The current situation confronting Donahoe is riddled with threats, the most poignant being competitive pressures from aggressive Internet companies. However, the online marketplace is still a growth industry, with opportunities for firms which can distinguish themselves in ways valued by consumers. New technologies and international prospects are particularly promising. The table below identifies the most salient opportunities and threats in eBay's general, industry, and competitor environments. eBay Inc. - 1
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eBay Inc.: Bidding for the Future Opportunities Threats General Environment Global economic downturn - Buyers looking for discounts - Unemployment, mortgage crisis, and decline in disposable income may increase eBay sellers Global economic downturn - Fewer buyers - Lower fees on fixed-price sales (by more than 70%) to compete with and on fees for infrequent sellers will have negative affect on revenues Changing ethnic composition - Hispanic population tripling in the U.S. (over the next 4 decades) - will alter product needs and selection Aging population - Declining consumers expected in eBay's primary customer profile group: Over age 45 (50%) Male (53%) Earnings > $50,000 per year (72%) Introduce new technologies Late mover of new technologies Economies expanding in developing countries International complexities and consumer expectations
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This note was uploaded on 03/22/2011 for the course ACCT 3391 taught by Professor Turpin during the Spring '10 term at Troy.

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CASE10_eBay - eBay Inc.: Bidding for the Future...

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