Can you please give me short 5 intelligent questions about this topic to ask to
ID: 1116505 • Letter: C
Question
Can you please give me short 5 intelligent questions about this topic to ask to the presenter?
eBay & Competition on the Internet
Background of eBay
Created by Pierre Omidyar in September of 1995.
Software engineer working in California’s Silicon Valley
Wanted to use the internet for a trading system
Wrote a computer code over Labor Day weekend
Few users joined at first, trading different items.
By the end of 1995, several thousand auctions had been completed and interest was
growing
Now a global giant with around 150 million users worldwide
More than $40 billion dollars worth of goods and services expected to be bought and sold
this year on eBay
In order to succeed…
Agility
An open mind
The ability to reinvent themselves repeatedly
To listen closely to their customers
What do they want and what do they not want?
Because of the rapid pace
of change and the ferocity
of competition, these are
the things firms need in
order to be successful when
operating online.
Agility
An open mind
The ability to reinvent themselves repeatedly
To listen closely to their customers
What do they want and what do they not want?
Because of the rapid pace
of change and the ferocity
of competition, these are
the things firms need in
order to be successful when
operating online.
Why are these necessary?
The internet is both growing and changing rapidly.
Barriers of entry are still low.
The behavior of many consumers is constantly changing.
While the tips previously
mentioned could be
beneficial to any business,
they are necessary for mere
survival for online firms.
Where can your competition come from?
A firm in a different type of online business
One that does not yet exist
One of your own customers
Due to the nature of online
competition, it can come
from a number of different
directions, these just being a
few.
Pros and Cons
The internet is a dangerous place to do business, but also full of promise. We see both of
these in the history of eBay.
It is safe to say, nothing like eBay could have ever existed without the internet (or grown so
quickly).
eBay Survived
Making it as far as it has is a huge accomplishment for eBay.
Like other online giants, it survived a brutal shake-out.
In less than a decade, the number of internet users jumped from less than 20 million to 150 million.
Dot coms were being formed every day.
Thousands of firms were swept away when the technology bubble burst in 2001.
In order for the survivors to flourish, the firms have had to remake their business over and
over again.
Examples of Business Remakes
eBay: no longer solely an auctioneer
Google: now more than just a search engine
Yahoo!: adding more services to its web
portal
Amazon: selling more than just books
New features and strategies
are being put into place as
online firms fight one another in
attempt to gain more of the “ecommerce
pie.”
Google, Yahoo!, and
Amazon now all offer
auctions (watch out eBay
Customers Role
The shifting behavior in
customers drive the strategy
for online firms.
eBay’s managers admit that
customers are shaping their
business more than they are
Example:
Second hand cars now
account for 30% of sales on
eBay’s sites. They only
discovered this possibility
after seeing that users were
listing used cars in the toy car
section of the site
Will Monopolies Emerge?
In theory, it seems that with their ability to aggregate vast audiences, e-commerce
giants such as eBay could easily turn into semi monopolies (like Microsoft).
Not impossible, but for now it is highly unlikely.
With customers playing such a big role in strategy, it is understood that they could at
any time choose to set up their own site elsewhere, should they be dissatisfied at any
time.
Conclusion
Because of the high involvement of customers in shaping strategies, eBay managers are
aware that this means they could choose to do business elsewhere at any time, meaning
they must continuously adapt to the customers wants and needs. Their niche is not secure
nor are they protected from competition.
Low barriers of entry are the biggest threat to any well-established firm.
Also one of the most alluring features of the internet.
Internet competition will always be extremely competitive due to the millions of people
setting up small web businesses, however a few will become the giant-killers of tomorrow
(like eBay has).
Explanation / Answer
eBay created a completely new and revolutionary business platform. How did the company know that consumers would want this business platform? The barrier to entry is low and the competition is intensifying. How does eBay stay competitive? How and why did eBay survive the technology bubble burst in 2001? Is it possible to create a sustainable competitive advantage in Internet-based businesses which are subject to technological disruptions and low entry barriers? How does eBay differentiate itself from other online giants like Amazon?