Evaluation of Ebay Using Swot Strategic Planning Assessment

EBay is the biggest Internet auction company in the world, and it has the largest number of users, and it still grows now. That is the reason that eBay must realize their strength and weakness to let the company grow more safe.

Information Linked to concepts

Core competencies:

EBay has a large market in the world that eBay had a presence in 28 countries in 2003. Customers can buy and sell other countries’ goods easily in the eBay.

EBay has large number of customers in Internet auction market that eBay does not need to care about its fund that it just needs to charge the sellers’ fee when they sell their goods.

EBay has lots of categories of goods that it can content with most of customers.

These services are other company are difficult to imitate that eBay has biggest auction market that customers can buy and sell most of goods from the whole world. EBay can get huge funds to maintain and grow the company because eBay has large number of customers in the world. EBay just need to charge the fee from sellers and eBay can get huge funds. Other online auction companies are difficult to do this. So, I believe the hugest online auction market, large number of customers, and lots of categories of goods are eBay’s core competencies.

However, these core competencies are also eBay’s weakness. EBay is very difficult to manage their customers because all of people can easy to join eBay, and eBay did not check their customers very seriously. It is easy to get two, three, even more ID in eBay.

Customer perspective:

The way to let all of people see and use eBay’s system is that the system must as easy as they can, let customers feel comfortable when they use eBay. So, the company must realize the customers, and the system must easy and safety to use.

Financial perspective:

The best way is show the growth rate, but it may be a serious part in the future because the Internet market does not have so much space to grow. So, eBay can try to develop other countries’ market.

Internal Business perspective:

EBay have large market and all kinds of goods, in order to nimbly use this strong point, eBay should make a powerful and useful search engine.

Innovation and learning perspective:

To improve eBay’s problems, eBay must check the fake ID to protect sellers control the price and feedback.

Customer:

EBay’s auction style is person to person trading community. There are six types of users use online auction:

• bargain hunters,
• hobbyist/ collector buyers,
• professional buyers,
• casual sellers,
• hobbyist and collector sellers,
• power and corporate sellers.

In these customers, “power and corporate sellers,” who are the small to medium-sized business, are the most important that they responsible over 80% business even if they just counted 4% in eBay. In other word, if eBay lost “power and corporate sellers,” eBay must be bankrupt.

In another way, “bargain hunters” is the largest numbers of customers that there are over 50% eBay’s customers are “bargain hunters.” Lots of them are “visitors,” not buyers. This is the gap about servqual gap 1, and it is a seriously problem that over 50% visitors cannot find what they want, and do not buy and sell anything. “professional buyers” are also the symbol for gap 1 that eBay’s system cannot give the customers enough information to let them become active online users.

I believe there are some fake ID exist that some people will use it to make fake auctions, and some seller will use it to control the price and feedback. I think this is the gap about servqual gap2 that eBay’s management cannot clear improve this problem.

Industry:

Internet grew very soon from 1990s, and it became a part of everyday life. However, Internet was not expected to have same growth in the future. The total growth rate of Internet may lower than 20%.

Opening an Internet retail store is very easy, and there are some excellent search engines, like Google, can help people to find the goods which they want and help them to compare the price.

Do not like retail stores, the auction companies create a stage to let other people or companies easy to trade, so buyers and sellers are the customers of auction companies.

Competitor:

EBay has lots of competitors in the world, so it is very important to realize the strengths and weakness to compete with its competitor.

Strength:

EBay has the largest online market in the world, so people can find and easy to buy and sell their goods from other countries.

The systems in the eBay are very easy to use, and everyone can become a buyer and seller in eBay.

EBay’s brand power is strong, so it attracts lots of people to join eBay.

EBay does not charge the fee from the buyers, and it just charges a little fee from sellers.

Make feedback system that help buyers and sellers to build solid reputations.

Use all kinds of way to get and analyze the customers’ information.

Weakness:

EBay has too many customers, and it is difficult to manger the ID and check the ID is true or not.

Without the checking the ID, the fake and illegal auctions happen easily. Sometimes, some person will sell the stolen goods, and it is difficult to differentiate the goods is stolen goods or not.

Some sellers will create the fake ID to control the price and feedback. First, they many a fake ID to compete with other buyers and let goods prices up to as high as they except, so they can earn more money. If the fake ID wins the auction, they will use fake ID to control their feedback. It can let they have more positive comment. The fake ID will let eBay lost the credit in Feedback system.

Some companies have more powerful search engine than eBay.

Over 50% of eBay’s business depends on power and corporate sellers which are only 4% in eBay customers.

The auctions take time to finish the trading. These actions may take 2~3 days to complete, but it takes too much time for some people.

EBay’s transactions are person to person, so the auction’s credibility may be lower than the business to business’s and business to person’s transaction because people do not have any information from each other.

Distribution/ Supplier:

EBay develop its market not only in the U.S.A., it also developed its market to Europe and Asia, make a largest online market in the world. When it made new market in other countries, it tried to develop the system that other countries’ customers easy to use. For example, it made a system that can exchange dollar and Japanese yen. This system let Japanese users use eBay’s system comfortable.

They also collaborated with PayPal and UPS. With the PayPal people can more safely, and they can check their package by UPS very easily. These are very well supplier for eBay.

Now, eBay tries to challenge and create the new trading like accept large sellers, they also warm about the companies which have strong search engine like Google, Yahoo!, MSN, etc.

SWOT

With the information, now people can start SWOT to analyze eBay.

Strengths:

1. EBay has the biggest online auction market around the world that most people can buy and sell the goods.
2. EBay has strong brand power that it can attract lots of customers.
3. EBay collaborates with PayPal and UPS to reduce the risk, and make feedback forum to let customers feel safely.
4. EBay not only developed the online auction market but also develop U.S.A. online market.
5. EBay can create the big market that it is large enough to develop the U.S. online market and U.S economy.
6. EBay has lots of auctions, so people most can find the goods which are cheaper than normal transactions.
7. Use the power to analyze the customers and creating the service what the customers wants.

Weakness:

1. It is easy to make fake ID and control the price and feedback, and fake auction happened easily because the users’ number is too large.
2. The transactions finished too slowly.
3. Some companies have more useful and stronger search engine than eBay.
4. Person to person’s transactions’ credibility may be lower than the business to business’s and business to person’s transaction.

Opportunity:

1. With the biggest auction market,
2. EBay develop the U.S. online auction market, and it also can develop other countries’ online auction market.
3. EBay can make new transition ways which is like normal web stores which finfish the transition fast.
4. Creating other way to finished payments safely. Collaborating with PayPal is a nice skill, and eBay could make a unique system about the payments.
5. EBay Can Collaborate with the companies which have the unique skills which can help eBay grows.

Threat:

1. If sellers can control the price and feedback easily, eBay will lost its credit.
2. The company security becomes very important. If the information of customers follows out, the indemnification will be very huge.
3. The Internet will be except lower than before, so the competition will become more seriously than before, and may difficult to expect the company can grows fast like before.
4. EBay caught the great chance to grow fast and became the largest online auction company, but it does not ensure eBay can also grow like before, and it may serious if eBay does not create other core competencies. EBay’s managers and leaders try to create new way and grow eBay. But eBay still have some seriously problems in their system.

Conclusion

Before growing eBay’s market, there are several serious problems that eBay must be improve. EBay must start to manger the customers, sellers especially, more seriously. I believe that there are lots of fake and illegal happened in eBay, so it is important to manage the customers and make security programs controlling the to block certain illegal and fake auctions. At least, eBay should check the sellers’ ID. It might need lots of cost, but it is the really way to improve the company’s credit and reduce the auctions’ risks.

EBay’s main servers’ security programs are also important, too. In these servers, it saves more than 90 millions users’ personal information and it also save some important information, like credit cards’ information. If these information is leaked out, there will be an astronomical liabilities happened, and eBay might be forced into bankruptcy. So, make a complete and safe security system is the first, but most important process that eBay must do before it grows.

Internet market’s growth rate is expected under 20%, so the new entrants and small companies may difficult to compete with the big online company, like eBay, because they do not have enough market share to compete, but it is dangerous if these companies collaborate with the companies which have strong search engines, like Google. It may become a huge threat that it may have the power take the place of eBay. One of the ways to improve this problem is collaborated with the companies which have strong search engine.

It is easy to find that eBay’s managers and leaders expend large of cost to develop eBay, and they do not hope the eBay‘s grow rate decreasing. However, the time is different than before, Internet do not have so much space to grow and create new market. So, before to think about the way to grow, I believe that eBay must improve the inside problems to make good foundation. If they have good foundation, I think they will grow very quickly and have enough power to compete other companies.