eBay, Inc. and Amazon.com (A)
Situation of the case: eBay is now faced with a direct competitor, Amazon.com. Even though Amazon.com has received most of the hype and publicity surrounding e-commerce, eBay has also built an innovative business truly sited to the internet. Initially, Amazon’s goal was to be the “Earth’s Biggest Bookstore” Since then, the company also entered music, video, toys and electronics business, extending the retail capabilities it had developed for books. Meanwhile, eBay aims to offer online marketplaces for the sale of goods and services, supplemented by other e-commerce platforms and online payment solutions. This case briefly explores the situation faced by both Amazon and eBay as they compete with each other for sales revenue. In addition, this case also explores the business model as well as the different types of strategies in which both companies utilize since the day their company was founded. Lastly, this case also provides two businesses strategy in which eBay should improvise on in order to better compete with Amazon.
What industry is the company in? eBay offered a marketplace that connects buyers and sellers. It started out as an online auction and shopping website mainly targeting people and businesses, allowing them to buy and sell a broad variety of goods and services worldwide. The company generated revenue from sellers through fees for listing items and commission fees on completed transaction. Since the day it was founded, eBay had expanded to include a “Buy-It-Now” feature, thereby enabling buyers to won an auction at a seller’s pre-established price. In addition to that, it had also introduced online money transfer for example Paypal as well as a rating system, allowing buyers and sellers to rate each other and a Bill Me Later option which also allows buyers to take out a loan and pay within thirty days. As of writing this case, eBay’s market share of revenue, operating income and net income had...
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