eBay Inc. is an multinational e-commerce platform that focuses primarily on global online auctions and shopping platforms for people (Forbes). eBay has become one of the world’s largest online trading platforms, with more than 97 million members worldwide as of 2011. eBay has become a diverse Internet community where people can make online auctions, buy goods, and e-commerce. eBay Inc. was formed in 1995 and went public in 1998, with the ticker symbol EBAY on the NYSE (Business Insights).
eBay was founded by Pierre Omidyar to help his fiancee collect and trade Pez candy dispensers (Business Insights). eBay has approximately 12,600 employees worldwide, including about 6600 employees in the U.S., and are headquartered out of San Jose, California (10-K). In 1999, eBay started to go global, and now eBay operates in more than 40 countries and territories all over the world, including Canada, China, Hong Kong, France, Japan and so on (Business Insights).
eBay’s products are platforms designed to enable sellers worldwide to organize and offer their inventory for sale, and buyers to find and purchase it, virtually anytime and anywhere (10-k).
The mission for eBay Inc. is, ” to be the world’s favorite destination for discovering great value and unique selection”(eBay). This company is a Internet services and retail industry. This mission is what they are trying to achieve now and in the future. Their main goal is to become the largest and unique market in the world and allow anyone to do any transaction in anywhere. And ebay can not only provide customers with convenient shopping, also bring diversified products to customers. It gives customers a different experience of shopping.
The vision for eBay Inc. is,”one that is enabled by people, powered by technology, and open to everyone”(eBay). With the change of times, technological progress brings more possibilities to people’s life and work. The eBay platform has hundreds of millions of consumers around the world. eBay is not only where can convenient for shopping, it is the place give provides the platform for sellers to start their own businesses online. As more and more people like online shopping, e-commerce will become the mainstream mode of development in the present era. EBay has the best platform, and their goal for the future are to provide people with better cooperation and help.
eBay is one of the largest online marketplaces where anyone can practically sell or buy anything enabling efficient economic growth worldwide. eBay connects individual sellers and buyers all over the world with either small or big businesses. However, while the eBay platform creates the unique trading system, it is the responsibility of the users to build a dynamic and robust trading background. To achieve the vibrant trading environment, the users are guided by the following values when buying and selling goods on eBay.
? Everyone has something unique to contribute
? Honest and open environment brings the best out of people
? People are generally good
? Treat others the same way you want to be treated
? Always respect everyone as a unique individual
Current Business Strategy
eBay has continuously reinvented different business strategies since it was established back in 1995. Currently, eBay business strategy seems to focus on the user experience of both sellers and buying. For instance, the most recent business strategy include improving the search engine capabilities to enable the customers to find items quickly. Specifically, instead of listing items when searching for a particular product, there are new categories which depend on cost, or validity of the products. According to Pantano, Nguyen, Dennis (2016), the pursuit of the eBay business strategy involves collection of product-related data from the loyal customers to enhance user search experience within their system. In other words, the current eBay business strategy is trying to change the role the company from e-commerce corporate to an online retailer.
eBay stakeholders and their stakes (Yahoo financial).
? Vanguard Group Inc. 68,397,719
Vanguard Group Inc. institution investor’s purchased 68.40 million dollars share at the end of September 2017 adding up to a total of 4.35 % of the total share.
? Blackrock Inc. 60,918,117
Blackrock Inc. recorded a total of 60.91 million dollars shares at the end of September 2017 adding up to a total of 5.83 % of the total shares.
? Wellington Management Company 45,421,252
Wellington Management recorded a total of 45.42 million dollars share at the end of September 2017 adding up to a total of 4.35 % of the total shares.
? State Street Corporation 40,077,098
State Street Corporation recorded a total of 40.07 million dollars share at the end of September 2017 adding up to a total of 3.84 % of the total shares.
? Magellan Asset Management Ltd. 36,048,303
Magellan Asset Management Ltd. recorded a total of 36.05 million dollars share at the end of September 2017 adding up to a total of 3.45 % of the total shares.
There are no opposing stakeholders and no holders have the same stakes as well.
3 year revenues overview based on Yahoo financial statistics (2016),
Revenue 12/31/2014 12/31/2015 12/31/2016
Total Revenue 8,790,000 8,592,000 8,979,000
The data above shows the annual net revenue of the eBay corporate from 2014 to 2016. In 2014, the company collected a smaller amount compared to the following year. In 2016, the online marketplace platform net revenue amounted to 8.98 billion U.S dollar a higher amount from the previous year (8.59). In this way, the company seems to increase its net revenue annually.
3 year profit overview based on Yahoo financial statistics (2016),
Profit 12/31/2014 12/31/2015 12/31/2016
Total profit 7,127,000 6,821,000 6,972,000
The data above shows the total annual profit of the eBay corporate from 2014 to 2016. In 2014, the company collected higher profit compared to the following year. However, according to the eBay statistics the online marketplace platform total profit amounted to 6.97 billion U.S dollar in 2016 a higher amount from the previous year (6.82). In this way, the company seems to have experienced slight translation of profit gain in the year 2015 due to the fall of the total profit.
The eBay gross profit margin has been practically stable since 2014 indicating 82 percent of sales made throughout the years. However, unlike other production company, eBay costs are usually not variable but referred as operating costs. Notably, the majority of the eBay costs are used in managing the profit margin. According to the Yahoo financial statistics (2016), the operating margin has increased over the years since the gross profit margin has practically grown much more than the operating expenses. Noteworthy, the growth of the eBay revenues during the years were driven by the stock sales both in the United States and the international communities. The 2015 and 2016 total revenues grew from 8.59 to 8.97 billion U.S dollars through continuous stock performance.
Serving as a long-term business company, eBay capital structures, and solvency ratios develops risks associated with the equity status. The ratios comparing both external and internal financials are typically fundamental as they are related to the risks associated with the investment of the company and issues of debt. As 10-k eBay statements points out, the corporate has strained to eliminate both long-term and short-term debts. Completely throughout the period. Additionally, the stakeholder’s equity has practically increased due to the high revenue resulted from the online transactions. Worth mentioning, most of the eBay debts are as a result short-term liabilities which are developed by the current assets. Moreover, deferred taxes have radically increased over the years usually viewed as a permanent as a debt which cannot be repaid fully.
eBay doestn’t have patents.
Most of eBay’s legal disputes are about products. eBay’s products come from all over the world, and as the diversity of products increases, the range of services is increasing (10-K). eBay has always had a problem with fakes. The company which called Tiffany & Co. sued eBay for selling counterfeit products of its brand (Business Insights). eBay is a network trading service platform. It is not involved in online commodity trading and non-transaction parties, so eBay is a third-party defendant.
Ebay’s strengths include four elements:” presence on online, marketplace platforms, product assortment, and distinguished programs” (Business Insights). First of all, eBay is the world’s most popular online shopping market and it is a huge market for people around the world to buy and sell everything they want. while eBay is also running a variety of classified sites such as “eBay Classifieds, Kijiji, Gumtree , Marktplaats and mobile.de “(Business Insights). This is the ability to attract the majority of customers. The variety is eBay has been pursuing and implementation of the main policy. It could be displayed by the diversity of eBay goods. Also, eBay ensures that their customers receive high quality products. Moreover, payment and delivery systems are well controlled to ensure that online payment is safe for every customer. eBay has built a strong brand name image worldwide that has developed trust among the customers. eBay acted as a middleman, a role in the intermediary, providing a powerful platform for sellers and buyers to facilitate customer relationships.
eBay’s weakness is litigations and lawsuits. eBay, as the largest online shopping platform in the world. Also has a lot of variety of legal issues. eBay is the defendant in many lawsuits. In 2016, eBay has litigated the defendants, because was sued for their product line Close5 is similar to the 5miles app name and logo (Business Insights). Generally, legal disputes can bring about a company’s impact on the company, including economic loss, brand image, and brand reputation.
eBay has recommendable payment methods and provides quality products to the customers an aspect that creates international growth opportunities. In this, eBay could open online marketplaces in other growing regions such as Europe or Asia. And strategic acquisition is also one of the opportunity of eBay (Business Insights). eBay through acquisitions, not only can reap the benefits, also can increase the product, get more bigger market. Such as eBay, after acquisition of PayPal to bring the huge benefits to the two companies.
The three main threats to eBay are:” foreign currency risk, regulation, and expansion by competitor” (Business Insights). Most of the eBay revenues comes from different countries which leads to currency fluctuates due to foreign exchange rates. Amazon, Alibaba and Flipkart competition Competition from other online platforms such as Amazon is one of the primary threats facing eBay. The country’s strict laws and regulations will increase the company’s operating costs. And government regulation and monitoring of goods are very strict.