eBay Business Strategy
eBay has been continuously reinventing itself since its founding in 1995 and its strategy places a great emphasis on the first mover advantage. eBay business strategy can be described as service differentiation with the focus on user experience of both, buyers and sellers. Specifically, the most recent changes include “improving the site’s search capabilities making finding items more structured. Instead of listing all available items when a product is searched, there will now be categories such as “best value,” “brand new” and others.”[1]
Generally, for the past few years eBay business strategy has been marked with a shift from a listings-based format toward a product-based format. The pursuit of this business strategy has involved a collection of product-related data from sellers to enhance user experience with the ultimate aim of building machine learning capabilities to process a global, accessible catalogue of things.
In other words, eBay business strategy is attempting to shift the role and image of the company from e-commerce facilitator to an online retailer. While this decision by CEO and President Devin Wenig may reflect the overall tendency in the global market, eBay may find it increasingly difficult to compete with Amazon, taking into account Amazon’s high level of cost-effectiveness and competence in the delivery of goods. eBay business strategy for a medium term perspective also includes improving its ranking in Google search results via employing a structured data.
It is important to note that the business strategy of service differentiation requires systematic financial investments in research and development. From this point of view, it can be argued that eBay may find it difficult to pursue this strategy in the future, since after the separation from PayPal in 2015, eBay lost a solid source of cash flow and a powerful growth engine.
eBay Inc. Report contains more detailed discussion of eBay business strategy. The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on eBay. Moreover, the report contains analyses of eBay leadership and organizational structure and marketing strategy and discusses the issues of corporate social responsibility.
[1] Froelings, L. (2016) “eBay Plans to Challenge Amazon, Announces Turnaround Strategy” Small Business Trends, Available at: http://smallbiztrends.com/2016/02/ebay-turnaround-challenge-amazon.html