eBay Evolution Paper

Essay by charles_medleyUniversity, Bachelor'sB+, May 2011

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� PAGE �1� Team eBay Evolution Paper

eBay Evolution Paper


May 19, 2011

eBay is a technologically innovative online store that provides worldwide access to buyers and sellers. eBay competes with online giants like Amazon.com and Walmart.com. eBay offers retail goods sold directly by the owners of the good to consumers via the Internet. Both buyers and sellers are the consumers of eBay's services. It is the largest auction clearinghouse in the world selling used goods and overstocked items. The second largest competitor in this market is Craigslist. eBay allows retailers and individuals to post their items on online and deal with buyers directly. Either through an auction period or direct buy. eBay not only provides income to an individual seller, but also makes profit by charging their sellers a fee for each transaction.

Examining the strategies discussed in the text book, a number of strategies are appealing when discussing eBay. First, consider the cost leadership strategy. In the market for second hand goods, eBay may not offer the lowest cost. If I have a bicycle in my garage, perhaps the cheapest way for me to sell the bike is to put a sign in my front yard or to tell friends that I am selling my bike. My cost to sell the bike is near zero. eBay is not cheap, because a seller must pay a fee, but it does give the seller access to the world wide market on the Internet. Differentiation is another possible strategy. Yet, does eBay offer differentiation from Craigslist? Yes, in that eBay is open to buyers world wide and on Craigslist they are listed by city. However, for large items that would be costly to ship such as my bicycle, the local market is the most viable. eBay is innovative.