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eBay StubHub is a online place where customers can buy and sell tickets
for sports, concerts, theatre and other live entertainment events.
Substitute services for StubHub include, but not limited to offline ticket
offices, online forums and websites selling tickets along with other types
of products and services.
For eBay Classifieds, substitute services relate to Yellow Pages and other
similar print advertising mediums. Media advertising, as well as,
advertising on a wide range of media platforms can also be mentioned as
substitutes for eBay Classifieds.
Rivalry among existing firms in industries where eBay operates is
highly intensive. This is primarily due to the impressive rate of industry
growth and increasing numbers of competitors operating in the industry.
eBay competes with a wide range of retailers, distributors, liquidators,
import and export companies, auctioneers, catalogue and mail order
companies, classifieds, directories, search engines, commerce
participants (consumer-to-consumer, business-to-consumer and
business-to-business), shopping channels and networks.
eBays major competitors include Amazon Inc., Alphabet Inc, Alibaba,
Yahoo Inc., Best Buy Co. Inc., Target Corporation, Chemours Co., Family
Dollar Stores Inc., Staples Inc., Priceline Group Inc. and others.
As it is illustrated in Figure 2 below, the number of eBay active users has
been consistently growing during the last six years. This is a clear
indication of eBays share growing in respective markets in the global
scale.
The acronym behind the strategic analytical tool PESTEL stands for
political, economic, social, technological, environmental and legal
factors. eBay PESTEL analysis involves an analysis of potential effect of
above factors on the volume of revenues and growth prospects of the
business. It has to be specified that the range of factors covered within
PESTEL framework are the external factors for the business and the
company has little or no impact on these factors.
Political Factors
Economic Factors
There are many economic factors that may affect eBay revenues and
growth prospects directly, as well as, indirectly. The exchange rate
between USD and other currencies is a major factor affecting eBays
reported profits. For example, in 2015 revenues reached USD8.6 billion,
growing 5% annually on an FX-Neutral basis and down 2% on an asreported basis reflecting strong USD.[4]
A change in inflation rate is another economic factor with implications
on eBays performance in global markets. MercadoLibre is New York
exchange-listed online marketplace based in Venezuela and eBay owns
an 18 percent stake at the company. While MercadoLibre reports rapid
growth in local-currency terms, the vast majority of this is due to
runaway inflation. Specifically, in the fourth quarter of 2014,
MercadoLibre reported revenue increase of 104 percent in its Venezuelan
market. However, taking into account the fact that units sold rose a
modest 12 percent, most of the revenue increase was driven by massive
price hikes.[5]
Apart from above, eBay is affected by an additional set of economic
factors such as interest and tax rates, cost of labour, the rate of
unemployment, and monetary and fiscal policies of governments.
Inbound logistics
eBay inbound logistics refers to ways in which the company acquires and
stores raw material to be used for the business. This includes but not
limited to the purchase of servers, other hardware products and a wide
range of technological items along with office suppliers and other items.
Due to the massive scope and scale of eBay business operations, the
economies of scale can be specified as the major source of value in
inbound logistics primary activities. Moreover, fostering strategic
relationships with suppliers is another key source of value in eBays
inbound logistics.
Operations
eBay operations revolve around technology-enabled commerce.
The full range of eBay technologies and services are divided into the
following three platforms:
1.
2.
3.
2.
3.
4.
5.
6.
7.
8.
9.
10.
eBay does not have to deal with wholesalers and distributors and
retailers. It is the responsibility of eBay sellers to ship products to
customers, but the company has to regulate and monitor the system in a
consistent manner.
Unlike its major competitor Amazon, eBay does not have its own
shipping and logistics system and the company is dependent on external
logistics vendors to ship items from sellers to buyers. Early in 2016 eBay
has announced a close cooperation with Uber Rush as an innovative and
efficient shipment services provider.[2]
Marketing and sales
Sales and marketing expense decreased by USD175 million, or 7%, in
2015 compared to 2014. Sales and marketing expense as a percentage of
net revenues were 26% and 28% in 2015 and 2014, respectively.[3] Until
its separation from eBay in 2015, PayPal a leading global payment
system was a solid source of competitive advantage for eBay in terms of
sales transactions. Currently, solid sources of value for eBay include an
effective utilization of social media marketing and viral marketing and a
sophisticated online sales system.
Service
eBay has a US customer service phone number that anyone can call to
24/7 to address their questions and concerns about eBay services.
Moreover, the company encourages its sellers to offer superior customer
services to buyers in order to maintain the positive reputation of the
brand. It has to be noted that the provision of efficient customer services
does not currently belong to the list of eBays competitive advantages.
Specifically, eBay is often criticized for the absence of live chat, direct
email and unity across international sites[4] among other issues
in 2015, eBay lost a solid source of cash flow and a powerful growth
engine.
SWOT is an acronym for strengths, weaknesses, opportunities and
threats related to organizations. The following table illustrates eBay
SWOT analysis:
Strengths
1.
Brand value
Weaknesses
1. Dependence on products and ser
controlled by competitors
2.
4.
Opportunities
1. Making a disruptive innovation in online
retail industry
Threats
1. Inability to compete with Amazon
retailer
2.
2.
Breach of security
3.
3.
4.
Engaging in acquisitions
1.
3.
4.
1.
2.
categories and this may create difficulties such as users being overwhelmed
with the abundance of offers