Ebay as an International Business Firm - Essay Example

xxxx College: xxxx xxxx 16 August, Introduction eBay, Inc. stands out as the largest sized as well as most widely used market on the web, providing customers to purchase as well as put up for sale nearly everything. Approximately 430,000 people today in the USA come up with all of or even the majority of their own existing through this web site. eBay’s web based transaction program known as PayPal, facilitates ventures almost everywhere on the globe. eBay proclaims “trust” among purchasers as well as vendors for the key element towards financial success from the market place. The actual goal of eBay was to promote the task ethic and traditions associated with the exciting, wide open as well as trustworthy atmosphere to achieve and maintain the main concerns of the organization. French computer programmer Pierre Omidyar established the eBay on 3rd September, 1995 at San Jose, California. This establishment was actually in the favor of his wife to sale her collectibles. Initially the name of organization was AuctionWeb which was renamed as eBay in 1997 (catalogs.com). A laser printer amounting $14.83 was the first sold item. In November 1996, eBay made its first third-party licensing deal with Electronic Travel Auction to sell air tickets and different travel products. The site hosted 250,000 and 2,000,000 auctions during 1996 and 1997 respectively (Lewis, 2008). In 2002, the company bought PayPal, the leading transaction medium of the world. In 2008, the company’s revenue reached 7.7 billion dollars and the strength of manpower exceeded by 15,000. eBay successfully purchased the rights of Skype in 2009 for an amount of 2.75 billion dollars (Washington Post, 2009) Scope of Business eBay is an international firm which deals a huge of variety of items for sale and purchase. This huge list of items include a variety of collectibles in the field of electronics, fashion, motors, antiquates, sports, household items, movies, music and games etc. The firm uses PayPal for payment which is one of the fastest, secure, and the largest online transaction medium. Key Management of eBay Corporate and strategic planning are fundamentals of this facet of the firm. It includes the Management Information System (MIS) and some other controlling agencies like accounting, electricity, and human resource departments. However, eBay provides a web based environment works which is like newspapers-classified section. It entertains consumer to consumer transactions but does not take responsibility of the custody of sold items. Areas of Operations Presently eBay operates about 30 countries in terms of different categories of its business. The countries include Argentina, Austria, Australia, Belgium, Brazil, Canada, China, Czech Republic, Denmark, Finland, Germany, Greece, France, Hungary, Hong Kong, Ireland, India, Italy, Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, and United States (www.ebay.com). Achievements After launching in 1995, the firm has done tremendous achievements in all facets of business. Today about 147 million people use this site in more than 30 countries across the globe. After 16 years, the company manpower strength has reached about 17,700 (finance.yahoo.com). The company market capitalization had surpassed that of even Amazon.com, helping to make it the world’s most worthwhile Internet retail outlet. In 1997, there have been 40 types of products available; the actual publishing associated with collectibles as well as antiques experienced a significant growth. Other categories with regard to these things were demanded by customers. At social level, the primary concern of eBay had been to ascertain confidence amongst remote control as well as unknown potential traders that could possibly in no way have interaction yet again. This had been done through the review programs pertaining to setting up reputations with online community subscribers who might make use of numerous applications for making their own ventures safe. The majority of acquisitions with auction web sites had been secured through good insurance policies. Top quality deals had been secured through an authorized escrow agency. A technology is definitely a vital strategy to obtain cut-throat edge against the rivalries. eBay managed the web based platform for the purpose of purchase as well as retail. eBay functions web based method to innovate, cut back expenses as well as to shield and preserve economical advantages. This specific achievement comes with internet marketing proceedings, good productions, Customer Relation Management (CRM), along with lots of various other technical advancements. Political, Economical, Social and Technological Challenges P: Government taxes and terrorism, different laws and regulations in different countries E: Custom duties, insurance policies and sales taxes, increasing interest rate in expected recession, Google, Yahoo, and Amazon are main competitors S: Fraud and theft T: System breakdown and poor internet facilities in some parts of the world, various mode of payment in different areas Financial Performance Undoubtedly, eBay has dominated the world market just after its beginning. In 2005 eBay earned 4.552 billion dollars. It earned 6.0, 7.67, 8.84, 8.7, and 9.2 billion dollars from 2006 to 2010 respectively. The company’s net revenue remained 2.5 and 2.8 billion dollars in first and second quarters of 2011 respectively. The graph given below shows the company’s continuous rise of the net revenue for the last seven years. The estimated analysis sheet given as Exhibit “B” in the end defines additional output of eBay in future. The potential of growth is estimated to increase significantly by December 2011 i.e. 17.40% which would be four times than of June, 2011. The latest income statement and Estimated Analysis of 15th August, 2011 has been shown as Exhibit “A and B” at the end of the paper. Conclusions and Recommendations According to CEO Meg Whitman, the organizational vision would be to “transform nations as well as metropolitan areas as well as towns as well as enable individuals to create a residing in methods they might not really before” and then to produce innovative business worldwide which the community has never ever observed (Whitman, 2008). Regardless of whether the actual organization may recognize this particular vision continues to be to remain viewed, nonetheless it's apparent that eBay definitely experienced the transformative result upon market segments with regard to a lot of items within several international locations that's simply most likely in order to increase within the long term. The actual major concern confronting eBay is actually to learn how to broaden simultaneously its regional as well as international scale. eBay must emphasize upon building additional resources which enable vendors in a single region in order to effortlessly work together along with consumers within several nations. This would certainly contain even more progress associated with automated interpretation software program as well as refinements in order to transaction methods that could instantly transfer the payments through the buyer’s currency to that from the retailer. A lot more complicated probability is actually how you can bargain along with disparities within state policies throughout the globe. eBay attempted to prevent policing it's website with regard to exercises which violate regional procedures as well as alternatively offers preferred disclaimers inside a lot more globalized online community. I will turn out to be extremely sophisticated with regard to vendors in order to comprehend and comply with the wide range associated federal government policies which may possibly affect their own conditions. In order to keep on development, eBay must additionally shell out resources as well as commit considerable assets in order to support dealers to understand these kinds of hard complications. Works Cited August 10, 2007, 10:38AM BST post to eBay announcement board by eBay's staff eBay, January 23, 2008- Meg Whitman to Step Down as President and CEO of eBay Lewis, E. (2008). The eBay Phenomenon. Marshall Cavendish books Skype Sale, Washington Post, November 19, 2009 Exhibit “A”: Net Income Statement (Dollars) Period Ending Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Total Revenue 9,156,274   8,727,362   8,541,261   Cost of Revenue 2,564,667   2,479,762   2,228,069   Gross Profit 6,591,607   6,247,600   6,313,192   Operating Expenses Research Development 908,434   803,070   725,600   Selling General and Administrative 3,418,438   3,686,891   2,880,422   Non Recurring 21,437   38,187   49,119   Others 189,727   262,686   582,369   Total Operating Expenses 4,538,036   4,790,834   4,237,510   Operating Income or Loss 2,053,571   1,456,766   2,075,682   Income from Continuing Operations Total Other Income/Expenses Net -   -   115,919   Earnings Before Interest And Taxes 2,098,447   2,879,151   2,191,601   Interest Expense -   -   8,037   Income Before Tax 2,098,447   2,879,151   2,183,564   Income Tax Expense 297,486   490,054   404,090   Minority Interest -   -   -   Net Income From Continuing Ops 1,800,961   2,389,097   1,779,474   Net Income 1,800,961   2,389,097   1,779,474   Preferred Stock And Other Adjustments -   -   -   Net Income Applicable To Common Shares 1,800,961   2,389,097   1,779,474   (Source: http://finance.yahoo.com) Exhibit “B”: Analyst Estimates Earnings Est Current Qtr. Sep 11 Next Qtr. Dec 11 Current Year Dec 11 Next Year Dec 12 Avg. Estimate 0.48 0.58 2.00 2.31 No. of Analysts 29.00 29.00 31.00 30.00 Low Estimate 0.45 0.54 1.91 1.95 High Estimate 0.50 0.65 2.05 2.48 Year Ago EPS 0.40 0.52 1.73 2.00 Revenue Est Current Qtr. Sep 11 Next Qtr. Dec 11 Current Year Dec 11 Next Year Dec 12 Avg. Estimate 2.91B 3.30B 11.51B 13.51B No. of Analysts 27 27 29 29 Low Estimate 2.80B 3.09B 10.97B 12.68B High Estimate 2.98B 3.40B 11.86B 14.40B Year Ago Sales 2.25B 2.50B 9.16B 11.51B Sales Growth (year/est) 29.40% 32.40% 25.70% 17.40% (Source: http://finance.yahoo.com) Read More