- EBay offer the largest sole on-line marketplace operating on a global scale.
- Seasonal sales analyses for on-line retailers in 2007 were concluded with EBay ranking the highest for popularity with consumers.
- The diversity of product categories within the marketplace provides product choice and caters for multiple demographic groups within the marketing mix.
- EBay have demonstrated a use of technology to innovate the on-line retailing function. From first developing the on-line auction idea to challenging the status quo and use of technology within consumer transactions in order to make the EBay experience a customer focused and friendly one, this is to be introduced with the use of Skype technology to introduce a new interface between buyer and seller relationships.
- EBay have a strong brand which is coupled with strong marketing at key times through many media outlets both on-line and through mainstream media streams to market.
- The EBay model forms a reliance on technology which can result in alienating some demographic groups although this is suggested will diminish over time and will see minimal impact to the overall success.
- EBay recognise there is a potential for counterfeit products to be listed which can result in legal issues for EBay and potential negative perceptions from consumers due to the nature of the model in which the seller who lists the product is responsible for the item.
- As a system which relies on technology EBay acknowledge there can be potential for abuse from either the buyer or the seller which affects both the business (EBay) and the consumer (Buyer or Seller) therefore steps are necessary to safeguard both parties through protected policies and procedures.
- Due to the nature of the on-line buy/sell relationship within EBay the ability to increase activity within the marketplace is limited and there is a reliance on those involved in the transaction to drive the sales unlike traditional retail models in which control can be flexed from the retailer.
- The acquisition of Skype moves the business into communications and further multi channel operations which can develop the current model to promote change and drive growth whilst developing new strands for the business.
- Growth through the financial sector can be developed within the PayPal function owned by EBay.
- Current practice for the EBay model places focus on the domestic market however there is the potential for wider business to business transactions which with potential large contracts could see a larger participation return for the business.
- Coupled with the current domestic market EBay dominates there is the oppourtunity to move into specialist markets although this may require a partner in the form of an established auction house.
- Overall the business has the opportunity to grow income in 2008 due to the impact of the £1.4b goodwill payment associated with Skype in 2007.
- As with all retailers the current general economic conditions will react as a potential threat to the forthcoming trading year, with less disposable income for the domestic market.
- Levels on on-line retail promotions will serve to act as a threat to the EBay model with low sell prices across the mainstream retail function there is less uniqueness within the overall marketplace to drive low prices.
- Low consumer confidence in on-line systems can lead to a decrease in participation also linked to the increasing media coverage of identity fraud and transactional fraud online.
- Given the global nature of the business the impact to changing exchange rates will impact the business directly.
Source: ChinaStones - http://china-stones.info/guides/swot-analyses/ebay-swot-analysis.php