Ebay Case Analysis - Assignment Example

These include SWOT analysis, STEEP analysis, competitor analysis, and financial comparison. These analysis will enable the management determine whether the company has the prospects of growth and success in its operation and will assist in the formulation of policies required in overcoming the threats and the challenges (Campbell and Craig 73). The tools further reveals the opportunities and the strengths that eBay must continue to pursue to remain a market leader. In as much as eBay recorded growth since inception, recent growth rate has slowed and revenues have declined for the first time.

The company growth was achieved because of the strategic alliances and acquisitions that were entered into by the company. Acquisitions and strategic alliances is a faster way of entering new markets and increasing the market share. eBay has started losing market its market share to new innovative competitors and is faced by a host of challenges. Through analyzing the case Donahoe, the company president, aims at determining the following: The greatest opportunities and threats that faces eBay external environment eBay’s greatest weaknesses and strengths whether eBay purpose statement is sufficient in directing the management in making important decisions.

Whether shifting of eBay shift from the core competencies is a right strategy for the company’s success. . STEEP analysis will help in determining the competitiveness of eBay. Factors considered in this analysis are the social, technological, economic, environmental, and political environment. The social factors provide eBay with an opportunity to increase its returns and performance. With an increasing number of people using the internet, eBay is in a position to attract new entrants and increase the number of people buying through the company market place.

The youthful population access most of the information online and eBay management can capitalize on this to market their products on face book, twitter, and even Skype. This will reduce marketing costs and further increase the scale of operation. The increasing aging population on the other hand will likely to hamper the performance of eBay because it reduces the company’s primary customers. Economic factors also influence the operations and performance of eBay. First, the economic downturn provides eBay an opportunity to increase the number of buyers.

With the decline in the disposable income, increased unemployment, and mortgage crisis will make customers look for discounts and therefore prefer eBay as a market place (Campbell and Craig 76). On the other hand, economic downturn also poses a threat on eBay competitiveness as it could result into fewer buyers and force the company to lower the fixed prices by more than 70% to become competitive. This could therefore shrink the revenues and profits of thee business. Furthermore, the fees on charged on infrequent sellers could have a negative impact on the revenues.

In addition, the expansion of developing countries would give eBay an