Case Analysis
Presented By:
Dhrupad Parmar
Sriram Santosh Bal
Geet Suri
Agenda
• Case Overview
• Advantages & Disadvantages
– Buyers Perspective
– Sellers Perspective
• Future of Internet Auction
• Competitive Advantage Of eBay\
• Comparison with Yahoo! & Amazon
Case Overview
Offerings To Customers:
• Started in 1995
• Pioneer of consumer-to-consumer sales model
• 500 million items listed for sale per year
• 45,000 categories of merchandise
• 2,54,000 online sellers
Business Model:
• Company’s revenue
– Fees Online & traditional
offline auction services
– Commissions
• Online revenues
– Placement fees
Sellers pay
– Success fees
– Bidder registration fees
– Appraisal & authentication
• Company expenses are personal
Competition
• Amazon.com, Yahoo!, uBid, Overstock.com
• Amazon its prime competitor
– Highly regarded brand name
– Substantial traffic on its web site
– USP: No deductible, no-haggle, no third party
money back guarantee up to $250
– Unique feature called Going
– Known for the usability of the site
Advantages
-Buyers & Sellers Perspective
Seller Buyer
• Reduce surplus inventory • Convenience
• Reduce distribution costs • Full information
• Sell surplus inventory • Time saving
• Increase global reach • Choices
• • Fully automated, easy to use,
Collecting information
24*7 browsing
about the product
• No geographical boundaries
• Meager advertising budget
• Unique social community
• Cascades risk
• Measuring statistics easily
& inexpensively
Disadvantages
• Possibility of fraud
• Limited participation
• Security
• Auction software
• Long cycle time
• Information security
• Overpaying
• Fakes
• Scams
Future of Internet Auctions
• Growth in developed markets like US has
become limited
• Internet auctions have huge opportunities in
emerging markets like India
• Road ahead looks bright though presence are
some challenges
Growth Drivers
– Internet penetration
– Plastic money penetration
– Mobile penetration
– Growth of organized retail industry
Internet penetration
– Internet connectivity is oxygen for this kind of
business model
– It is expected to grow to 96.8 mn users from current
62 mn by 2013
Plastic Money Penetration
– Widely used payment mode for online purchase is
credit card
– Credit card users in India – 18.3 mn (as on March,
2010)
– Credit card market is expected to grow rapidly in
future
Mobile Penetration
– Mobile is expected to be the killer tool for internet access
and payment
– It is expected to reach 60 crores base from current 40
crores by 2013
Source: http://www.zdnetasia.com/telecom-growth-lifts-indian-
market-62046175.htm
Growth of Organized Retail Industry
– Online purchase not only provide conveyance of
home shopping to consumers but advantage of
savings on the costs managed by the organized
retailers.
– Future group came up with futurebazar.com to
serve the tech savvy Indians.
Challenges For The Industry
• Low entry barrier and hence high competition
– The internet is not only growing, but changing rapidly
—which, in turn, changes the rules of the game for
any business relying on it.
– The barriers to entry are still low compared with those
for most offline businesses, which means that just
keeping track of your existing rivals is not enough.
– These may not represent the greatest competitive
threat tomorrow or the next day.
– That could come from a number of directions - a
firm in a different type of online business; one that
does not yet exist; or even from one of your own
customers.
• Changing consumer behavior demands
continuous reinvention
– The behavior of many consumers is constantly
changing as well, as individuals discover new
ways to shop and interact with each other via the
web
– Hence, keeping close eye on the change and
meeting them is the key of the business
Competitive Advantage Of eBay
• eBay is the leading global brand for online
auctions
• Exploits the benefits of Customer Relationship
Management (CRM)
– B2C : Registration of buyers & sellers and
company collects data
– C2C : when buyers & sellers leave feedback for
each other
• “eBay” has become a generic word
• Network effects
SWOT- Amazon.com
STRENGTHS WEAKNESS
35 million users, 150 Free shipping
Countries policy
Well known name
1.1% web traffic to
Extensive reviews of
each item listed on site auction sites
A9 search tool Expanding globally
Alliances with other pushed them out of
companies number one spot
OPPORTUNITY THREAT
Continuing strategic
alliances EBay’s success
Continuing in the global
globalisation market
Acquiring smaller New entrants to
auction sites to
broaden and diversify
the online
their product auction industry
SWOT-Yahoo!
STRENGTHS WEAKNESS
Numerous alliances to Failure in many
generate traffic
Investment in technology foreign markets
to improve sites overall Decreased use
aesthetic feel after change in list
Well known name
Offering of extra services
fee requirements
to users such as the Little advertising
Premium Sellers Program and marketing
THREAT
OPPORTUNITY Globalization of
Diversificatio online auction
industry
n of products EBay’s commitment
offered to building a sense
Joint ventures of community to
keep customers
Thank You!!
