Ebay Case

Introduction

In order to understand Ebay's business success, one has to look at the company's history and background first. In the next step, an overview of Ebay's market position provides more current information. The third step will show a general view of the company's strategy. At the end, the paper will outline Ebay's most important success factor.

History

Ebay was established during the dotcom bubble in 1995. The company's first goal was to establish a simple trading and exchange platform (ebay.com) for everyone who wants to sell or buy used or new products. Since Ebay was the first website which provided this kind of service to internet users, the company had a major advantage compared to those who entered the market because it was already an established brand with an increasing number of active buyers and sellers.

Market Position

From its foundation in 1995 to 2012, Ebay has increased its market value to $65 billion. With around 100 million active users in more than 40 countries, it provides the biggest market place on the planet. The company works together with several partners, like GM, Disney, or Craigslist but also small businesses all around the world.

Strategy

Ebay's strategy is based on five pillars.

The first one is Customers value, the convenience of buying and selling products or services from their own home, combined with time efficiency, and the opportunity of price comparisons makes it easy for people to participate in the 'Ebay Market'.

The second pillar is the customer relationship. Ebay provides not only direct personal help over the phone or via live chat but it also established a so called 'Ebay University' where sellers can learn how to build their own online store on Ebay.

The third pillar is a secure payment system. In 2002, Ebay bought PayPal, which is an e-commerce business enabling people to transfer money online without waiting for the bank transaction confirmation, and implemented in on its Website.

The fourth pillar is focusing on marketing. Ebay tries to keep the market leader position through a lot of advertisements. Many of those advertisements show Ebay's key activities especially the social innovations where Ebay raises money for charity or helps to fight pollution.

The fifth pillar is its revenue model. The company generates money not only by commission per transaction from the seller but also by advertisements from other companies.

Success Factor

Ebay used its first mover advantage very wisely. The company launched its trading platform for almost everyone and increased its users as well as partnerships due expansion in to other countries during the years. As a result, Ebay