NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote
Executive Summary Section One - Corporate Level Part 1 - Brief History of the Corporation eBay was founded by Pierre Omidyar's in his San Jose home in September of 1995, under the name Auction Web. From its early beginnings it was meant to be a marketplace for the sale of goods and services for a variety of interested individuals. It was incorporated in 1996, and has since grown to become the worlds largest most financially successful online auction company. After realizing the overall potential of his idea, Pierre and his cofounder Jeff Small brought on Meg Whitman, as CEO, to efficiently handle the growing popularity, and sustain e Bays success.
Meg earned a MBA at Harvard Business School, and had gained high acclaims and top-shelf experience at the successful company of Hasbro. With the addition of Meg Whitman's expert experience eBay soon expanded rapidly to service a wide variety of buyers and sellers, and in September of 1998 the company went public. The shares were initially offered at $ 18 and immediately rose to $ 47 by the end of the day. The company has not faltered since, rising to revenues exceeding $ 700 million by 2001. In its short history, eBay has chosen several different paths than traditional companies to get to where it is. Most all of e Bays advertisement was done through word of mouth and through agreements with a few Internet companies such as AOL and Disney.
The large portion of savings from low advertising costs is invested in innovative marketing strategies to keep them ahead of its competitors. I believe that eBay is has achieved such an incredible amount of success in such a relatively short period of time because of its beginning philosophy of giving power to its users. With that foundation of loyal users it is able to expand its name by word of mouth and continue to grow to service a wider variety of users and their products. Also e Bays ability of provide access to such a broad variety of products at relatively low prices will continue to attract more users and profits in the future.
Part 2 - Corporate Level Analysis 1. Does the corporation have a mission statement? Does it define the business, identify the major goals, and articulate the corporate philosophy? Yes, eBay does have a mission statement. I believe that this mission statement defines the business as broad and simplistic as possible. It is very broad and short, not identifying any of its specific goals.
It is very short and simple e Bays mission is to develop a global online trading platform that will help practically anyone buy or sell practically anything. The statement describes the ultimate goal of the business without describing any other goals of the company. I think it demonstrates how e Bays philosophy is simple and down to earth, creating a very inviting environment to it users. 2. Is their mission statement appropriate for them? Explain.
I believe that eBay thrives on its image of providing a simple way for its users to get the very best deals on trading online. Although short, I think that their mission statement describes not only the ultimate goal of the company but some of their character as well. After researching more about the company it seems to fit perfectly within their overall values and philosophies. Also because their market is so broad it helps to have a very broad mission statement to allow them to make changes in their focus without altering their overall goal. 3. How vertically integrated is the corporation? If it is vertically integrated, is it pursuing a strategy of taper of full integration?
eBay is not vertically integrated. It is a company that simply supplies a medium for person to person trading. It connects the buyer to the seller and allows for an easy transaction between the two. The products are registered and displayed on the site by the sellers, and when an item is purchased the seller ships it to the buyer, and eBay earns a commission from the sale. 4. How diversified is the corporation? It is highly diversified in the types of products it provides.
The range of products varies from collectibles to cars, almost anything that a user is willing to sell. The site makes it easy for the buyers to locate the products with everything divided into categories and a convenient search engine for quick access to a specific item. Although it provides a wide variety of products e Bays area of business is relatively simple; it only offers a stable connection between the buyer and a seller. I believe the overall concept of business for eBay is simple, to provide the most convenient, reliable, and cheapest way for users to buy and sell products on the Internet. 5. Is the corporation transferring skills, realizing economies of scope, and / or achieving supply chain efficiencies through strategic alliances? eBay has many different alliances with a variety of major companies.
Many of its partnerships have provided it with a vast amount of resources allowing it to grow more rapidly. It has various marketing alliances, which associates major brand names with eBay, and helps to attract new users through advertisement and name recognition. Also a recent alliance with Microsoft has allowed eBay to dramatically upgrade its technology of API (application programming interface), which allows them to fully integrate into other sites across the Internet. These partnerships are key to e Bays overall success and it offers a variety of benefits to it allies as well.
Many of its partners receive benefits such as brand name recognition, increased user base, and strategic networking opportunities. This vast network of partners is allowing eBay to continue its rapid expansion, creating new markets, increasing technology, and bringing on a broad range of new users. 6. Which division / business contributes the most to competitive advantage? e Bays key factor in gaining competitive advantage is its marketing division. eBay has made arrangements with over 13, 000 partners which has helped it to drive user growth by putting eBay in front of more people than any of its competitors.
Its powerful marketing promotions with such diverse brands such as AOL Time Warner, Disney, Visa, The History Channel and General Motors is critical in bringing in new users and user retention. e Bays heavy concentration on expanding its promotions and partnerships has continued to draw new users away from its competitors, develop strong user loyalty, and increase brand recognition. 7. Which division / business , if any, detract from competitive advantage? One of the major aspects of eBay that detracts from their competitive advantage is their limited operating history. The company was formed as a sole proprietorship in 1995 and was incorporated in 1996. This causes eBay to be competing with companies with such longer histories, larger customer bases, and greater brand recognition.
Most of their competitors have significantly greater financial, marketing, technical and other resources than eBay due to their rapid growth. I believe that this significantly short operating history puts eBay a considerable competitive disadvantage. This disadvantage may cause eBay to be forced to make decisions that may harm its firm in order to stay competitive. 8. Is the corporation involved in international operations? Yes, eBay has expanded its operations to various countries worldwide. eBay is expanded is online trading platform globally to many countries that generate a majority of the worlds e-commerce revenue.
In 2000 it entered the online trading market in Japan, Canada, France, and Austria. In 2001 eBay expanded to Italy, South Korea, Europe, Ireland, Switzerland, and New Zealand. With its global expansion eBay has acquired strong leadership positions in 15 of the top 20 global markets. Part 3 - Financial Analysis 1. Provide a full financial analysis of the corporation over the past three years, including comparison to industry averages or leading competitors. eBay.
com, Inc. Amazon. com, Inc. Year Ended Dec, 31 Year Ended Dec, 31 1999 2000 2001 1999 2000 2001 Income Statement Revenues $ 224, 724 $ 431, 424 $ 748, 821 $ 1, 639, 839 $ 2, 761, 983 $ 3, 122, 433 Cost of Revenues (57, 588) (95, 453) (134, 816) (1, 349, 194) (2, 106, 206) (2, 323, 875) Gross Profit 167, 136 335, 971 614, 005 290, 645 655, 777 798, 558 Operating Expenses (170, 509) (300, 977) (473, 579) (896, 400) (1, 519, 657) (1, 210, 815) Operating Income (Loss) (3, 373) 34, 994 140, 426 (605, 755) (863, 880) (412, 257) Other Income 23, 833 46, 337 41, 613 45, 451 40, 821 29, 103 Other Expenses (10, 893) (33, 037) (91, 591) (159, 664) (588, 214) (184, 123) Net Income 9, 567 48, 294 90, 448 (719, 968) (1, 411, 273) (567, 277) Balance Sheet Assets Cash $ 221, 801 $ 201, 873 $ 523, 969 $ 133, 309 $ 540, 282 $ 822, 435 Other Current Assets 243, 506 473, 591 359, 836 878, 869 667, 638 538, 694 Total Current Assets 465, 307 675, 464 883, 805 1, 012, 178 1, 207, 920 1, 361, 129 Other Investments/Assets 504, 518 506, 939 794, 724 1, 459, 373 429, 627 774, 040 Total Assets 969, 825 1, 182, 403 1, 678, 529 2, 471, 551 1, 637, 547 2, 135, 169 Liabilities & Equity Accounts Payable $ 32, 133 $ 31, 725 $ 33, 235 $ 463, 026 $ 444, 748 $ 485, 383 Short-term Debt 15, 781 15, 272 16, 111 14, 322 14, 992 16, 577 Other Current Liabilities 45, 127 90, 445 130, 793 261, 587 461, 674 472, 996 Total Current Liabilities 93, 041 137, 442 180, 139 738, 935 921, 414 974, 956 Long-term Debt 15, 018 11, 404 12, 008 1, 466, 338 2, 156, 133 2, 127, 464 Other liabilities 7, 637 19, 797 57, 244 0 0 0 Total Liabilities 115, 696 168, 643 249, 391 2, 205, 273 3, 077, 547 3, 102, 420 Total Equity 854, 129 1, 013, 760 1, 429, 138 266, 278 (1, 440, 000) (967, 251) Total Liabilities & Equity 969, 825 1, 182, 403 1, 678, 529 2, 471, 551 1, 637, 547 2, 135, 169 Analysis Ratios Current Ratio 5. 00 4. 91 4. 91 1. 37 1. 31 1. 40 Debt-to-Asset Ratio 0. 12 0. 14 0. 15 0. 89 1. 88 1. 45 Debt-to-Equity Ratio 0. 14 0. 17 0. 17 8. 28 (2. 14) (3. 21) Cash Flow-to-Assets 0. 23 0. 17 0. 31 0. 05 0. 33 0. 39 Return on Equity 0. 01 0. 05 0. 06 (2. 70) 0. 98 0. 59 Gross Profit Margin 0. 74 0. 78 0. 82 0. 18 0. 24 0. 26 2. Is the corporation in a strong financial position? After calculating and thoroughly analyzing e Bays financial data and comparing it to Amazon...
Free research essays on topics related to: ultimate goal, gross profit, vertically integrated, mission statement, competitive advantage
Research essay sample on A Corporate And Financial Analysis Of Ebay Inc
