2 SWOT Example

 

 

eBay is an Achilles of the online auction industry

Source: businessblog.winweb.com

 

eBay Inc. is an American multinational internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries.

 

A company like eBay must always know its strengths,weaknesses, opportunities and threats. And to reveal and evaluate this four things a SWOT analysis is a must. Using this analysis eBay can focus on the good part of the business and focus more on the bad part to make it good.

 

 


Strengths

  • eBay is the worlds largest internet marketplace. It is a giant marketplace used by more the 100 million of people all over the world to buy andsell all things one can possibly thinkof. It is capable of attracting vast audiences with diverse needs.
     
  • The company uses the power of customer relationship management by collecting data of buyers and sellers registered with the company. This is a big strength of the company as the data collected can generate reports and statistics that can make the company better and address its weaknesses and threats.
     
  • eBay gives a whole new meaning to the word middle man business. It does this by providing extra ordinary tools to sellers which, lets the seller target their products to the buyers. It also provides buyers with wonderful search tools, to get to the products they are looking for. eBayhas made a very powerful platform for both sellers and buyers by being seamless and invisible but at the same time facilitating Customer to Customer relationship.
     
  • Diversifying has been a key policy of eBay. It does this by not only diversifying its products but also its market, by branching and localizing in countries like India, China and U.K.
     
  • Staying ahead of the competition has always been a focus of eBay. A fine example wasacquisition of Paypal to support its online auction with a robust payment method. The combination of these two has been a knockout as it has given opportunities to new small startup businesses and helped facilitate enterprise businesses.
     
  • Brand reputation. eBay is a trustworthy brand, known all over the world.

     


Weaknesses

  • High fees. eBay’s fees for the sellers has risen significantly over the years. The firm receives fees on listed goods, sold goods, some adornment fees and PayPal transaction fees. 
     
  • Weak further growth strategy. eBay hasn’t unveiled any plans on how the business is going to sustain its growth. Firm’s top management team is unsure whether eBay should become a retailer or to introduce new products and services and how to do that: developing its own products or acquiring new business. As a result, there is high uncertainty over eBay’s future and business direction.
     
  • eBay does a very bad job of controlling fake or illegal auctions. There are numerous auctions still out there whose main purpose is to scam the buyers or are illegal auctions. A good example would be scammers trying to sell just the packaging box of the product and claiming it to be the real product. These sellers save themselves by claiming that the information about the product being just the packaging box is stated in the auction description, which is true. But the statement is in a very fine print.
     
  • One of the weaknesses of eBay is the sellers being able to enforce the payment method of their choice.This is a big favorite among the scammers as they choose apayment method like money transfers which does not protect the buyers from losing their money and buyers not returning back to eBay.
     
  • Another weakness of eBay is its inability to control the contents of the auction and auction items. Most of the content is checked only after the content or the auction has been posted. Due to this inability it facilitates large sale of copyrighted and not for resale items.




     


 


Opportunities

  • Growing number of mobile shoppers. eBay has a strong payments system PayPal that is widely accepted and used by many online retailers and online shoppers as it is convenient and easy to use. The growing number of mobile shoppers represents a huge growth opportunity for PayPal as its one of the few payment systems that meets the requirements for convenient shopping and payment processing on the go.
     
  • Become a retailer. eBay has an access to hugest online marketplace in the world and is well placed to take an advantage of that by becoming a retailer. The company has its IT and CRM systems in place already and could easily stake out a market share from Amazon and other online retailers.
     
  • One opportunity that eBay saw was, how to sell a product like a normal website, an auction takes three to fifteen days to end. This is a long time and buyers tend to lose their interest. eBay saw a weakness and an opportunity at the same time, thus the Buy it Now button was created. Further more a new tool Make an Offer is now available which gives buyers the power to offer a price to the seller for a product. If the seller agrees the transaction goes forward or the buyer just deny the offer.
     
  • eBay has always believed in diversifying in every possible way so using its diversifying techniques, eBay has now started localizing its website allover the world. A good example would be a personalized eBay website for different countries like UK even developing countries like India and China.This is a big opportunity, as the outsourcing booms in these countries have significantly increased the spending limit of the consumer.
     
  • Increase services portfolio through acquisition. The company has successfully acquired many companies to extend its services offering and should continue adding new services through mergers and acquisitions. In Belgium, 2dehands.be was acquired in 2014


Threats

  • Online security. PayPal stores online shoppers’ personal information, such as bank account details, which is a target for online thefts. The more online customers PayPal has, the more attractive as a target for identity thefts it becomes.
     
  • Regional low cost online retailers. Regional low cost online retailers could outrival eBay on faster and cheaper shipping, more localized product offering and better knowledge about home market
     
  • eBay as it is expanding and diversifying on foreign soil, it may be threatened by local competitors in the domestic market as the auction trends and the way they do transaction might differ locally.
     
  • Increasing competition from Amazon. Amazon’s online presence has significantly increased and now Amazon’s marketplace is just behind eBay’s. Amazon is selling more and more 2nd hand goods. The same product is often offered as "new" and as "used". The integrated logistics and more powerfull e-commerce automation of Amazon become a significant competion for eBay pulling away small e-shop business with more functionality
     
  • In 2014 the activist investor Carl Icahn began pressing for eBay to sell PayPal. eBay confirmed to split of PayPal by 2nd half 2015.











     


Sources

  1. https://www.strategicmanagementinsight.com/swot-analyses/ebay-swot-analysis.html
  2. Scribd (2007) https://www.scribd.com/doc/259894/eBay-SWOT-Analysis
  3. eBay (2013). Company overview. Available at: https://pages.ebay.co.uk/aboutebay/thecompany/companyoverview.html
  4. eBay (2013). Investors. Available at: https://investor.ebay.com/annuals.cfm
  5. Interbrand (2013). Best Global Brands in 2012. Available at: https://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx
  6. Wikipedia (2013). eBay Inc. Available at: https://en.wikipedia.org/wiki/EBay