Ebay
Question 1
What are the competitive advantages that contributed to the success of eBay using the value-chain analysis or RBV concept?
In 21st century the internet population started rising across various countries of Asia and eBay is the largest and leading provider of online auction for consumer-to-consumer in the world. Using the Resource-Based View concept, we will first identify the three key types of resources that eBay possess, and these are the competitive advantages that contributed to the success of eBay. 1. Tangible Resources a) Financial Resources • Revenue growth: between 2004 and 2006, net revenue grew between 30 and 59 percent per quarter. By 2006, revenues reached $5.9 billion, up from $3.2 billion in 2004. For 2007, consolidated net revenues expected to be in the range of $7 to $7.3 billion • Acquisition and partnerships in related and unrelated businesses to increase market share and revenue: $2.6 billion acquisition for Rent.com, Skype, Shopping.com and Stubhub.com; $318 million acquisition for Half.com; acquired Latin American auction sites; 25 percent stake in Craigslist, an online central network of urban communities; invested $2 million in the meet up social networking site • eBay alliances with large and international companies creates more opportunities to reach more potential customers, eBay already has international cooperation with Google – largest search engine company
b) Physical Resources • eBay has a wide variety of product categories from collectibles to household products, which give them a competitive advantage among the entire online auction provider. eBay also offers a range of pricing formats such as fixed pricing, which a new for the company by establishing a fixed pricing format it allows eBay to compete directly with major competitors and penetrate new market space • eBay does not have any stores or warehouse as they do not carry any inventories.
What are the competitive advantages that contributed to the success of eBay using the value-chain analysis or RBV concept?
In 21st century the internet population started rising across various countries of Asia and eBay is the largest and leading provider of online auction for consumer-to-consumer in the world. Using the Resource-Based View concept, we will first identify the three key types of resources that eBay possess, and these are the competitive advantages that contributed to the success of eBay. 1. Tangible Resources a) Financial Resources • Revenue growth: between 2004 and 2006, net revenue grew between 30 and 59 percent per quarter. By 2006, revenues reached $5.9 billion, up from $3.2 billion in 2004. For 2007, consolidated net revenues expected to be in the range of $7 to $7.3 billion • Acquisition and partnerships in related and unrelated businesses to increase market share and revenue: $2.6 billion acquisition for Rent.com, Skype, Shopping.com and Stubhub.com; $318 million acquisition for Half.com; acquired Latin American auction sites; 25 percent stake in Craigslist, an online central network of urban communities; invested $2 million in the meet up social networking site • eBay alliances with large and international companies creates more opportunities to reach more potential customers, eBay already has international cooperation with Google – largest search engine company
b) Physical Resources • eBay has a wide variety of product categories from collectibles to household products, which give them a competitive advantage among the entire online auction provider. eBay also offers a range of pricing formats such as fixed pricing, which a new for the company by establishing a fixed pricing format it allows eBay to compete directly with major competitors and penetrate new market space • eBay does not have any stores or warehouse as they do not carry any inventories.
References: 1. Strategic Management – Text and Cases, 4th Edition, George Dess, G T Lumpkin, Alan Eisner, McGraw Hill, 2008 2 3. eBay, http://news.ebay.com/about.cfm, 1995 – 2009 4