eBay is an online marketplace

Title: Consultancy Report for eBay based on Market Analysis
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Executive Summary
eBay is an online marketplace that is counted as one of the biggest e-commerce companies
worldwide. An efficient business model enabled eBay.com to be successful in the retail business.
However, there is some space available in the model for changes and improvement to strengthen
the value proposition of the company. This consultancy report has given a market analysis of
eBay by using SWOT Analysis and the PESTEL Analysis. This report is suggesting a new
business canvas model to eBay based on the market analysis with some changes in the value
proposition, customer relationship, cost structure and revenue streams. Additionally, some
recommendations are suggested to eBay to increase its productivity and effectiveness at the
company level. In the first section, a brief introduction of this report and about eBay is presented.
After the introduction, the business model of eBay is discussed and some recommendations are
suggested. In the last section of the consultancy report, a brief justification of the proposed
recommendations and the source references are presented.

Table of Contents
Executive Summary………………………………………………………………………………………………………….2
1. Introduction………………………………………………………………………………………………………………4
2. Justification of selected topic………………………………………………………………………………………4
3. Consultancy Report…………………………………………………………………………………………………..4
i. Business Model of eBay………………………………………………………………………………………….4
ii. Market Analysis of eBay…………………………………………………………………………………………5
a) SWOT Analysis……………………………………………………………………………………………….5
b) PESTEL Analysis…………………………………………………………………………………………….7
4. Feasible Recommendations………………………………………………………………………………………..9
i. Business Canvas Model…………………………………………………………………………………………..9
ii. Practical Recommendations With Justification…………………………………………………………10
5. Conclusion……………………………………………………………………………………………………………..11
6. References………………………………………………………………………………………………………………12
7. Appendices…………………………………………………………………………………………………………….14
List of Figures
Figure 1: SWOT Analysis of eBay; Source: Self-made…………………………………………………………..5
Figure 2: PESTEL Analysis; Source: (Gregg and Parthasarathy, 2017)………………………………….7
Figure 3: Proposed Business Model Canvas for eBay; Source: (Eisape, 2019)………………………10
1. Introduction
The report on eBay aims to analyze and determine if the actions taken in the past by eBay to lead
the growth of the company have been correct and the repercussions that these have had over time
on the strategies and action plans prepared by the company. the business has allowed the
sustained development of the business within their environment. eBay’s objective of constantly
updating and acquiring new business proposals increasingly represents a latent challenge within
the company’s strategies (eBay, 2020). In this report, the current business model of eBay is
discussed in the first section and after that, a consultancy report is made to improve the weak
areas of the model. Different models are used for the market analysis of eBay. The last part of the
report consists of recommendations and their justification. This consultancy report of eBay also
aiming to improve the value of a company by focusing on the key points of the business model.
2. Justification of selected topic
eBay is an online retail company that has shown some serious growth in the previous 25 years of
its work. It is the leading online e-commerce firm dealing with about 32 different countries. eBay
is a giant platform with 13,300 workers and produced a revenue of US$10.8 billion per Anum in
2019 (eBay, 2020). The organisation manages the shopping and auction through the online
website in which vendors and customers connect and deals with a large variety of goods. The
website does not charge buyers because they are paying for goods but sellers are charged fees for
posting items. eBay does not charge new sellers and after giving some free listings, sellers pay
charges to sell those goods
(eBay, 2021). The purpose of selecting eBay is to provide some
recommendations for improvements to fight with its competitors and the business model they
used could stay in the market.
3. Consultancy Report
i. Business Model of eBay
Every company is a collection of some operations (sometimes referred to as company
procedures) designed to create profits. Most e-commerce sites do not hold any control over
inventory and because of that, they have to trust vendors (Dragomirov, 2020). eBay can offer its
product price lower than other shops because eBay does not need to suffer shop cost and other
cost associated with a physical shop. According to Chen (2005), a new feature like “Buy It
Now”, automatic bidding and different payment methods give an advantage to eBay over its

competitors. The major source of generating revenues for eBay are advertising, commission and
PayPal fees. According to Black (2007), the average age of eBay customers are 25 years and the
age of non-eBay customers are 24 years. Business model and business strategies are two
different things but at some point business strategies becomes a business model.
ii. Market Analysis of eBay
For any business analysis environment analysis is mandatory. The environment analysis can be
divided into two different categories, external and internal environment (Altaweel and Hadjitofi,
2020).
a) SWOT Analysis
Figure 1: SWOT Analysis of eBay; Source: Self-made
Strengths
Largest internet
market
Strong customer ties
Weakness
Accusition of fraud
System breakdown
Opportunity
Tapping non-internet
markets
Business in powerful
countries
Threat
Competitors like
Amazon
Online frauds and
cyber threats

According to Hassan, Sistani and Raju (2014), SWOT Analysis is a significant tool for eBay to
find its strength, weaknesses along with opportunities and threats. Therefore, eBay can
effectively build competitive strategies for their operations.
Strength:
eBay is a well-known internet company that attracts customers from all over the world, has more
than 100 million buyers and the largest internet market which makes it more successful than its
competitors. Moreover, eBay offers a variety of integrated solutions in one convenient location.
Purchases, fare monitoring, deposits, and money transfers can all be done online (Hassan, Sistani
and Raju, 2014). Besides, strong customer relationships are a strength of eBay for which it
provides quick feedback to its customer to maintain strong ties with them.
Weakness:
eBay can be charged by people with fraud activity as there are a large number of false or
fraudulent sellers on eBay. Despite the company’s best efforts, these types of sellers continue to
exist. That is, in reality, a significant brand vulnerability that hurts the brand’s reputation (LeNguyen and Guo, 2016). In addition, any technology disruption will have a significant impact on
the eBay business and is a major flaw of eBay.
Opportunity:
The eBay platform normally goes untapped in markets that aren’t connected to the internet. The
company should figure out how to incorporate them into the platform, as it would be a massive
opportunity for the company. Moreover, the growth of eBay in other powerful countries like
China and India is an opportunity for its expansion (Le-Nguyen and Guo, 2016).
Threats:
According to Hassan, Sistani and Raju (2014), Native organisations like Amazon and new online
market competitors are posing a significant challenge to the company. Besides, online fraud can
occur on the eBay website and cyber threats can harm the eBay company.

b) PESTEL Analysis
The PESTEL framework analyses macro-environmental factors to look at the big picture and
understand the organisational operations. PESTEL analysis is essential to take advantage of the
opportunities and to avoid risks and threats.
Figure 2: PESTEL Analysis; Source: (Gregg and Parthasarathy, 2017)
Political Factors: Political factors refer to government regulations, political security,
foreign trade policy, law, trade limitation and so on (Citilci and Akbalik, 2020). Every
organisation must obey the rules and laws of its country. Through this policy, eBay can correctly
approach its main challenges and think big about all its future actions. The analysis of public
policies, behaviour and the environment of each area of the company must contribute to defining
what the present policies must do to prevent such threats from affecting the performance in
achieving the new challenges in the market (Gregg and Parthasarathy, 2017).

Economic Factors: Economic factors refer to external factors related to cost matters
(Citilci and Akbalik, 2020). eBay’s growth strategy focuses on investing in customers intended to
improve the experience of users and sellers by offering good products and services, improving
trust, security and customer service, expanding the offer of products in new formats, categories
and geographical areas, as well as the application of innovative prices and buyer retention
strategies. The international expansion of the business brought with it a growing complexity in
legal and economic matters for eBay, in addition to this the price was also impacted by the action
on Wall Street with the inclusion of new categories in the eyes of sellers and net income in the
pockets of eBay.
Social Factors: Social factors belongs to the behaviour and beliefs of consumers. These
factors include population attitude, customer awareness, and common beliefs and so on (Issa and
Chang, 2010). These factors play an important role in an organisation to understand consumers
and their needs.
Technological Factors: Over time, everything will be shifted to the internet whether it is
shopping or anything else. eBay seems to understand the power of technology to bring people
from all over the world united. It provides online payments via PayPal, transaction security tips,
and the development of programs within eBay.com for society (Statista, 2021). If eBay has
technical problems and cannot get your site online, it is doomed. That is why eBay is
characterised by having cutting-edge technology, the latest generation.
Environment Factors: The demands of the external environment on the company must
be covered with the resources of the organisation. In an environment so influenced by foreign
currents as we are living in today, a business like eBay cannot be left behind and must always be
at the forefront (Issa and Chang, 2010).
Legal Factors: According to Citilci and Akbalik (2020), eBay has created the Intellectual
Property Rights Program and Databases, Verified of Property (VeRO) with all the content hosted
or made it possible for the holders of the Intellectual or Industrial Property rights to report
advertisements that infringe their rights. The conditions of use and sale are regulated both to
protect merchants and buyers by providing guarantees to the customer, after-sales service
systems, solution of problems with payments and a system to recover the money of the articles in

case of error. eBay allows you to decide how the platform uses your data and its data and cookie
privacy policy guarantees protection using technical and administrative security measures.
4. Feasible Recommendations
i. Business Canvas Model
Figure 3: Proposed Business Model Canvas for eBay; Source: (Eisape, 2019)
Business model canvas is a framework that describes all the building blocks of a business. Using
this canvas, an organisation can be able to monitor its business models. It will lead to

understanding about the customers, value propositions, cost and profit. eBay is one of the largest
online e-commerce company and over time it will expand in other countries as well. Figure 3
here is showing a proposed business model canvas for eBay by Eisape (2019) which is discussed
below.
Value proposition refers to how the company’s services and goods satisfy the customer’s needs.
eBay here first provides 100% genuine and quality products to the customers to fulfil their
demands (Black, 2007). The company increases its value proposition by giving trust and safety
to the customers. The revenue stream of eBay includes commission, advertising, PayPal fees and
others. eBay can buy products and later sells to customers and create profit but instead they act
as a middleman between buyer and seller. According to Song and Baker (2007), eBay generates
its revenue and profit by getting a commission on the selling products, the advertisement and
other services offered to sellers.
E-commerce companies know very well about their strengths, weaknesses and market trends
(Comberg and Velamuri, 2017). The cost structure of an organisation defines the expenditures of
a company to manage businesses. eBay invest its money in product development, sales,
marketing, administration and so on. Today is a world of smartphones and everything is shifting
online on the internet. eBay group made an android and IOS app for their mobile customers and
that’s how they are investing and generating revenue. According to Chen (2005), a new feature
like “Buy It Now”, automatic bidding and different payment methods give an advantage to eBay
over its competitors.
ii. Practical Recommendations With Justification
In this section, some practical recommendations are suggested with justifications based on
SWOT and PESTEL Analysis.
According to Comberg and Velamuri (2017), the security system is very good but when a
seller posts an item for selling, a very large verification is required on e-commerce
websites and it takes a very long time. eBay has two payment platforms which are PayPal
(international) and Bill Me Later which is a platform that is only useful for users in the
United States. eBay is expanding this platform to offer other payment options to users of
other countries, without neglecting the country risk of each market. Since, these payment

solutions allow online commerce to be more efficient and create a safer, faster and easier
online shopping experience for users (Le-Nguyen and Guo, 2016).
In the wake of fierce market competition, eBay should implement mitigation techniques
to close the gap. According to Calvano and Polo (2021), innovation is an effective way of
mitigating competition. Mobile devices, for example, are progressively used for ecommerce as a social and economic phenomenon. eBay needs to create better
applications and improve users’ mobile and multi-screen experiences to keep up with
rapid technological change.
In terms of product and service growth, eBay can form long-term strategic relationships
with reputable third parties such as delivery companies and software engineering firms to
render operations more reliably and risk-freely (Gregg and Parthasarathy, 2017).
5. Conclusion
Through the analysis of this case study, we can conclude that eBay has relevant factors for the
market, which allows it to remain positioned among users and attract new members of its
community. The main factors that have helped eBay to stay at the forefront and concern for
technological security and for being constantly updated on its platforms to provide an optimal
service to its users, thus generating trust and reinventing how people buy and sell items and
services. Through this strategy, eBay is managing to position itself around the world, increasing
its profits and its penetration in the market. By becoming a globalized business, it has greater
opportunities but also faces different challenges within each country such as tax rates and local
direct and indirect competitors. Conclusively, the main goal of every company lies in
maximizing the wealth of shareholders, which translates into increasing the value of their share,
which eBay has achieved through planning and making good decisions.
6. References
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nonconsumers
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Calvano, E. and Polo, M., 2021. Market power, competition and innovation in digital
markets: A survey.
Information Economics and Policy, 54, p.100853.
Chen, E.T., 2005.
LEVERAGING IT FOR A COMPETITIVE ADVANTAGE—CASE OF
eBay
. Issues in Information Systems, 6(2), pp.77-89.
Çitilci, T. and Akbalık, M., 2020.
The Importance of PESTEL Analysis for Environmental
Scanning Process.
In Handbook of Research on Decision-Making Techniques in Financial
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Comberg, C. and Velamuri, V.K., 2017. The introduction of a competing business model: the
case of eBay.
International Journal of Technology Management, 73(1-3), pp.39-64.
Dragomirov, N., 2020. E-Commerce Platforms and Supply Chain Management–
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Economic Alternatives, 2, pp.250-261.
eBay, 2020.
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eBay, 2021.
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[Accessed 26 March 2021]
Eisape, D., 2019. The Platform Business Model Canvas a Proposition in a Design Science
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Gregg, D. and Parthasarathy, M., 2017. Factors affecting the long-term survival of eBay
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Issa, T., Chang, V. and Issa, T., 2010. Sustainable business strategies and PESTEL
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7. Appendices
Figure 4: SWOT Analysis of eBay; Source: Self-made
Figure 5: PESTEL Analysis; Source: (Gregg and Parthasarathy, 2017)
Figure 6: Proposed Business Model Canvas for eBay; Source: (Eisape, 2019)