Explain ebay case-ebay revolutionized

Assignment Help Marketing Management
Reference no: EM1330231

Explain EBay Case and how eBay Revolutionized the Auction Business

In the 1990s, many entrepreneurs attempted to use new information technologies and particularly the Internet to provide new or improved services to customers. Their goal was to use the potential of the new technology to find ways to obtain a competitive advantage over existing firms in a particular industry environment. Nowhere has this been more evident than in the auction industry.
Traditionally, auctions have been places where buyers and sellers meet face-to-face to determine the fair market value of a product. Auction houses range from the most prestigious ones, like Sotheby's and Christies, which sell fine art and antiques, to small local auction companies that sell the contents of someone's house.

In the early 1990s, Pierre Omidyar had an idea for a new kind of auction company, an online auction company, which he believed would revolutionize the selling of all kinds of products-not just fine arts and antiques but any kind of collectibles, from cars to Beanie Babies-by bringing buyers and sellers together by using the Internet. He left his job at Microsoft and began to write the software that would provide the platform for an online auction service. The result was eBay, which was launched on Labor Day in 1995.
On the eBay web site, sellers describe their product electronically, post a photograph, and set an initial price, which buyers can then bid up: the highest bidder wins. eBay charges a modest fee to list the product plus a low percentage of the final sales price. Sellers have the advantage that their product appears before buyers in every part of the United States and abroad-anywhere where someone as a computer and can log on to eBay's online auction site. Buyers enjoy access to a huge array of merchandise that can be quickly scanned by using the appropriate keywords on eBay's search engine. eBay thus provides a low-cost forum in which buyers and sellers can meet to buy and sell products. It makes it money from the sheer volume of products that it sells. Every day, millions of items are listed, so that even with low fees, it generates high profits.

As you can imagine, eBay's low-cost approach has generated many imitators; after all, it is relatively easy to write a software program and develop an online auction site. However, eBay's early start has also given it another major competitive advantage: being the first in the online auction business, it has attracted a loyal audience of buyers and sellers who will not switch to other online auction companies, even when they provide the service for free. For example, by 1999, Yahoo and MSN, and hundreds of small, specialized companies had developed their own online auction businesses and decided to charge users nothing for their services. However, many of these, including Yahoo's auction site, have not attracted many buyers and sellers. The reason is that sellers know that eBay's site attracts many more buyers than does Yahoo's so that they are likely to obtain the highest price, and eBay buyers know that they will find the greatest selection on eBay and so focus their search there. Thus, eBay has not only developed a low-cost competency; it also has developed a substantial reputation that has given it a differentiation advantage as well.

Other online companies are not content to give away the lucrative online auction market to eBay, however, and are searching for ways to fight back. In June 1999, bookseller Amazon.com announced that it was forming an alliance with Sotheby's to create an upmarket online auction service, and other companies are also searching for partners. In October 1999, Yahoo, Amazon.com, and other announced that they were banding together to combine their auction businesses to offer a credible alternative to eBay.

After this announcement, eBay's price, which has soared several thousand percent because investors thought that its strategy had given it a sustainable competitive advantage over its rivals, fell back. Through his innovative use of new information technology, Omidyar has brought increased value for millions of buyers and sellers and in the meantime has created over a billion dollars of value for himself in his eBay stock. The question now is whether eBay can maintain the value it has created.

Case Discussion Questions

1. Describe the nature of competition and the industry environment of the online auction industry.

2. Go to eBay's web site, and analyze the strategies it has been pursuing to protect its competitive position (for example, different kinds of auction sites and services).

Reference no: EM1330231

Questions Cloud

Backing up the email data : How would you go about backing up that type of data?
Explaining conceptualizing as prime leadership talent : Greenleaf refers to "conceptualizing" as the prime leadership talent.
Write down a java application that reads from a text file : give exception handling for opening and reading from the input file. Also, provide exception handling for checking the input file format. Your program must explain to the user the reason for each exception and terminate if one is thrown.
Effect the organization external competitiveness : Provide the different levels of pay and total rewards, how may an organization create a sense of internal equity and Does the extensive use of contingent workers effect the organization external competitiveness as it relates to attracting top level ..
Explain ebay case-ebay revolutionized : Explain EBay Case and how eBay Revolutionized the Auction Business
How can blockbuster increase the value-added components : Do you think customers would be willing to incur price increases due to these value-added services? Explain How can Blockbuster increase the value-added components.
Recruitment, selection and onboarding : Recruitment, Selection and Onboarding - Give private-sector employer examples of HRM programs, systems, processes and/or procedures as you address the above assignment requirments. Provide names of the employers.
Strategies and interventions for motivating people : Discuss the various strategies and interventions that you have found successful in motivating and influencing people to accomplish certain goals.
Make use of a constructor to initialize employee information : make use of a constructor to initialize employee information. A payroll program that calculates the employees weekly pay after employee's name, hourly rate, and number of hours worked.

Reviews

Write a Review

 

Marketing Management Questions & Answers

  Explain market participant

Explain Market Participant and Exception to the Dormant Commerce Clause Is such discrimination justified

  Give answer to the ''discussion question''

Give Answer to the "Discussion Question" and What are the differences between two-sided platforms and the more traditional merchant sales process

  Research which is most beneficial for company

From the e-Activity, evaluate the lessons learned in this chapter to determine which single lesson would be most beneficial to the company you researched. Provide specific examples to support your response.

  Explain important information about managing e-business

Explain Important information about Managing e-business and what metrics are used to track and reward success in an affiliate program or network

  Explain exchanges in the digital business environment

Explain Exchanges in the digital business environment and what is the difference between the concept of exchange and the concept of transaction

  Explain will hardening the punishment for cyber-attacks

Explain Will hardening the punishment for cyber-attacks have any effect on the attacks and any effect on the attacks

  Explain benefits of b2b e-commerce

Explain Benefits of B2B E-Commerce and List at least five potential benefits of B2B e-commerce

  Explain globalization and key informaiton

Explain Globalization and key informaiton and summarize your findings from previous assignments about the company doing business in Israel

  Explain how would you define e-commerce

Explain How would you define E-commerce and What makes something an e-Business

  Explain e-business explained in this solution

Explain E-Business explained in this solution and Develop and implement an EDI system to receive requirements/orders from large customers and send requirements and orders to vendors

  Explain b2b or b2c technology applications

Explain B2B or B2C Technology Applications and the purpose of every e-business is to utilize technology in a way that enhances communication and the company's profitability

  Explain the part of an expert system that automatically

Explain The part of an expert system that automatically executes a line of reasoning is called

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd