eBay Phenomenon
About eBay eBay's Phenomenal Success
The eBay Phenomenon
The number of eBay members online today is incredible. eBay has succeeded in redefining the way the general public buys and sells just about anything, as well as how the world communicates with one another. The reasons for the success and popularity of eBay really come down to a few things: membership, choice, value and communication. This paper will discuss the success of the eBay phenomenon, emphasizing how its innovative method of global communication filled a much-needed void in the consumer marketplace
In 1995, Pierre Omidyar, a Silicon Valley software engineer, created website so his girlfriend could find other collectors of Pez dispensers (Avis, 2002). To his surprise, droves of people came to the site wanting to trade various types of collectibles. He slowly expanded the Web site, eventually quitting his job to accommodate the overwhelming pressures of his new and successful site, which was generating thousands of dollars in fees per day.
Today, eBay is one of the highest traffic sites on the Internet, with 41 million members around the world (Avis, 2002). The site generates about 1.5 billion page views per month. eBay provides a source of worldwide communication to buyers and sellers from all markets. According to Forrester Research, eBay reported $15 billion in sales in 2002, as well as a market capitalization of $24 billion (Hill, 2003). Naturally, globalization has played an enormous role in the eBay phenomenon, as international business already accounts for about 15% of eBay's total annual revenue.
About eBay
The sole purpose of eBay is to provide a communication link (Avis, 2002). It is basically a place where buyers and sellers from around the world can meet to trade. However, rather than existing as a huge classified ad site, every sale is done through an auction. Over a given period of time, anyone with an interest in the product that is being sold can enter a bid. The bids are shown in real time and at the end of the auction, the current highest bidder buys the product.
A eBay is an exciting, innovative, and competitive market for communication.
Through first-mover momentum and superior service, eBay has capitalized on the network effect to a greater extent than any other e-commerce company in the market (Hill, 2003). Basically, eBay's huge customer base creates a growing bubble of influence that serves as a magnetic field.
Large and small merchants are drawn to eBay because they know that there is a surplus of buyers, Consumers are drawn to the extensive product selection. The result is a massive communications link that provides something for everybody.
According to Hill (2003), "two priorities dominate eBay's operational strategy: keeping its buyer/seller community happy, and keeping its massive Web site up and running." eBay's leaders operate the company as a community-based business. To do so, eBay maintains a great degree of communication with its customers through posted bulletins, interactive message boards and an unprecedented accessibility of its top-level executives. For example, Meg Whitman, eBay's CEO, is known throughout the community simply as Meg.
In addition to this form of communication, software tools serve to regulate trust in the community (Hill, 2003). The company's feedback system is a secure method of self-regulating that maintains integrity and accountability in eBay's marketplace. Through enhanced communication, eBay members feel secure and comfortable buying and selling through the site.
A eBay's Phenomenal Success
When looking at eBay's phenomenal success, its role in building out certain product categories is an important one (hill, 2003). The company follows its sellers to some extent in determining its product directory. For example, while eBay did not invent Beanie Babies, it enabled a brisk business in trafficking them.
Basically, when eBay determines that there is an excess of activity in a fairly new category, it works to promote it. For example, concentration on eBay Motors resulted in sales of $3 billion...
Human resources The first person employed by the company was Chris Agarpao and the first president hired was Jeff Skoll, in 1996. Ebay employs individuals with a large variety of skills, from technical to customer service. The number is increasing fast reaching 5 digits in 2005 and having a double digit growth. Considering that it is desirable to work for such a successful company, the personnel inflows are likely to be high and
Competitors are a special category of eBay's microenvironment's components. EBay's most important direct competitors are Amazon Inc., Google Inc., and Yahoo Inc. The companies are quite similar, they have similar sizes and number of employees, or quarterly revenues growth level. However, there is little threat of new entrants on the market, as eBay is at a very high level that is very hard to be attained by smaller new entrants,
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It is predicted that dot coms would increase their sales by 21.2% in a year if they were not to increase their employees. Furthermore revenue per employee would increase by 24.47%, gross income by 27.22%, and gross income per employee by 28.4%. The areas in which learning takes place then include selling, fulfilling customer requirements, and providing customer satisfaction to an increasing degree of excellence. This is done without
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