EBay - External and Internal Analysis - Case Study Example

You copied everything in red colure change it now I will give you 10 mins not more that tis time Introduction Technology has been on the rise going to certain heights that most companies are now trying to move parallel with. All this is achievable by diversification. By this I mean that in order to avoid being scraped out companies have to go electronic which means deal more with the internet. That itself is a strategic move. In this case study the main business is a virtual interface that allows the buying and selling of commodities in the internet. This has really helped a lot, eBay is a virtual company that deals with a lot of selling on the World Wide Web and this has risen to help people have an easy time, but this does not mean that it’s the only company which does this, or rather an easy thing but a means to sustain it is also a task that eBay has to go through some strategizing here and there and so this paper will try to explain the different kinds of decisions strategic management, how to implement these ideas and how they have worked well where implemented, whether positive or negative. External and Internal Analysis The company can well be analysed through a number of processes. SWOT analysis has been used to analyse the company’s external and internal environments according to the case study ‘A simple (SWOT) analysis would clarify the way eBay has been doing and where it should concentrate on. When it comes to strategizing as shown below; Strengths EBay has achieved Market leadershiphas really put itself out there having a wide range of products hence brand awareness. And to add to that if there was any product in the market the company would be in the best position in the market (Fred R & David Francis, 2010). Intellectual property, eBay’s intellectual dealing with registered trademarks, copyrights, patents and domains is likely to give the company a bitter competitive edge and as result increased sales and rocket high profits and a greater market share. EBay as a brand has done so well in the past and it has established itself as a virtual auction website which is becoming known in the international market. And soon mainstream, due to this the brand eBay has caught the attention of buyers and now if anyone wants to shop the first place one could think of is eBay being an advantage, and eventually maximizing sales. EBay’s The business modelis a very unique company that happens to have no inventory with a very low capital requirement hence all that it does is making profit, this makes it on top and gives it the competitive advantage that it has hence strength. Weaknesses EBay’s advertising costs in the resent past have not been doing well due to the 2% recorded return on advertisement. (Jill Shepherd, Simon Fraster University. 2012) it still shows major weakness. As indicated; increased expectations in the sense that whereby the company has been rising hence attracted a lot of competition, hence investors come in and with rise of investors it has to keep on innovating and meeting financial goals raising a weakness. Litigation is an act against the community or legal suite against the company. EBay though doing well does not mean that everyone is proud and happy, there are those characters that are willing to sue the company for various acts such as, patent infringement, this would be a huge blow to the company since its not able to control it hence a (Fred R & David Francis, 2010) Opportunities Loop holes that the company can capitalize on in order to maximize profits of the share holders and be successful in the long run. Such opportunities are like; Market penetration where eBay has the opportunity to engage itself in any market since the only thing that it does act as a medium of exchange between the buyer and the seller, all that it has to do is maximizing the number of eBay users (Fred R & David Francis, 2010). The usage of the internet and online shopping is said to be on the rise and at a very high rate and due to this. EBay has the opportunity to capture new users since its well established already. New markets, Diversification into new markets since its not all countries that is well operating country’s like Japan where it does not operate in. It can choose to diversify into these new markets and thus generate great profits. Threats It has seen in the past that new company are coming up trying to copy where now it shows that companies coming up and proving to be a threat to eBay and be the second movers, this is a standing threat the company since it is something it cannot control though well up in the business (Fred R & David Francis, 2010). Foreign exchange rates is one threat that is really haunting eBay since eBay operates in different countries, the company is likely to handle different currencies and with the fluctuation in the different currencies it is likely to affect the company earnings. Customer confidence in eBay has been doing well in the past, one thing that the company has been going through is maintaining customers and that has posed as a threat since it must work its best to maintain its customers so that. It can remain in the market. (Fred R & David Francis, 2010). Seasonality of shoppers is another threat or hindrance that the company has been going through is the presence of seasons where there are days or times that shopping goes does and hence decrease in revenues, days like holidays, Christmas if the company does not sell well during the 1st quarter and the forth quarter of the fiscal year then those days are a threat to the company. (Walker, Gaelle. 2006). Strategic choices Mergers and acquisition is one strategic tool that has been used by the company, this strategy entails one company coming together with another company either under the first one ore a new name. the reason as to why company’s acquire or merge with another it because they want to increase their client base and attain a larger market share. eBay’s choice strategies range from a number of things, market leadership, to being more competitive or even profit maximization. And to ahieve that it had to come up with strategies where seen in different parts of the world like asia (china in particular) where it acquired shops and turned them to eBay shops, the same was seen in parts of Europe ( germanyin particular) where the same was experienced, all this in the name of market leadership and profit maximization Employing experts In 1999 the site was still facing a challenge in the changing of technology and due to unpreparedness, EBay shut down for 22hrs which was a blow to the company since they lost some of their clients, they come up with strategies of getting experts who would make sure that it would not happen again. They lined up experts and employed Meg, who was an ex- consultant who now headed the Us-business and as a result EBay became data metric driven.(Jill Shepherd, Simon Fraser University, 2012 ). Employing of the president Maynard Web who changed the systems to work well with the current technology (Jill Shepherd, Simon Fraser University, 2012). Strategy implemented Mergers and acquisition lately mergers and acquisitions have been on the rise since completion has grown to top heights, and as this case study eBay is a very competitive company also included itself in merging and acquisitions where we see the online operating company strategized to be to as market leaders. It acquired. (Jill Shepherd, Simon Fraser university, 2012) The implementation took part in the payments method where the money transfer was controlled with the same firm. Hence client satisfaction due to good security in the case of Skype the company has enhance the one on one interactions between the buyer and the seller and with these interactions the site has got more advanced and profits all thanks to the acquisitions eBay engaged in with Skype and papal PayPal was acquired by eBay in October 2002, (PayPal. 2008) where now who ever has an email address can send and receive money easily. Skype brought about easy communication between the buyer and the seller to make the seller and buyer agreement faster Horizontal integration A good example of a horizontal acquisition strategy implemented by eBay was when acquired Alando which was in Germany and was later changed to eBay later tat year. Going out to china and acquired more companies and eBay dominates in china markets, eBay not stopping at that joined other countries like Sweden Korea, which has brought fruits to the company. Now eBay controls most of the online auctioning of products. (Hill, 2008) Evaluation Under the strategy has been seen that most of the that the company implemented did help boost the company in more than one ways, an area that improved includes the market share of both the home company and the other branches in the different parts of the continent and so when put on a scale it’s a strong move by the company. But eBay's another dark period, the pay department continues steady growth in the previous quarter, PayPal contributed revenues of $ 1.37 billion, accounting for more than 40 percent of eBay's total net revenue. Its revenue grew 22%, to some people, PayPal is expected to become eBay's largest business is just a matter of time. Although this case do not know when and whether it will happen, but it is clear that 10 years ago, investment, eBay's make it immensely (PayPal, 2008). The team up was to work together where EBay helped since they joined to use the china portal which really helped in opening new markets in china now EBay fully operates in china where it has gained great profits from that market (Jill Shepherd, Simon Fraser university, 2012). The horizontal integration that the company implemented Overseas has led to expansion outside the state. The portal was opened has really opened up new markets close to it making the work of connecting the united states to other place easier like Africa where it has recorded a rise in the online purchasing .(Hill,2008). The strategies used did help in the place intended and they showed a strong reaction hence very successful. Conclusion It’s safe to say that in general strategic management is very vital in any line of business since it helps the company acquire more in what they want. According to this case study on EBay the company is seen to use more than one strategy in its management, and due to this it has acquired a number of advantages which may take it to a leading position in the industry, in order to be competitive one has to use one or another strategy in order to be completive. It’s important to analyse ones strengths and weaknesses in order to know where to concentrate on and where to maintain. To finalize, eBay is seen to be extremely competitive. Mostly sharp to correct mistakes and strengthen weaknesses and use all the opportunity available. References Austin, T. (1992). ‘SAS will cut losses in Intercontinental hotel stake’. Reuters News, 5 March. Economist (2006). ‘Time for a new, improved model’. 20 July. Financial Times (1993). ‘Airline merger hopes dashed by rift over US link’. 22 November: 1. Fred. R.,&David Francis (2010). Marion University strategic management Florence, South Carolina. Huddart, A. (1993). ‘SAS airline, after third year of loss, seeks partners’. Reuters News, 10 March. (Hill,2008)http://en.wikipedia.org/wiki/Strategic_management Lin, X. (2002). ‘SAS bogged down by neighborly turbulence’. Dow Jones International News, 18 June. (Jill Shepherd, Simon fraster university 2012). strategic solutions Canada. Plunkett, Jack (ad). 2006. Plunkett’s Retail Industry Almanac 2007: Houston: Plunkett Research, Ltd 16 , accessed 28 May 2005. (PayPal, 2008)www.x.com/developers/paypal Walker, Gaelle. 2006. Online failing to deliver: The Grocer (William Reed Publications). Read More