Summary Case Study 1:
The case study explores the transformation of eBay from a quirky online auction site to a more
conventional e-commerce platform. The process began in 2007 when John Donahoe took over as
CEO, succeeding Meg Whitman. At the time, eBay was facing challenges as buyers were
shifting their preferences towards fixed-price retailers like Amazon, and search engines were
making it easier to find products online.
Donahoe implemented a three-year revival plan that aimed to move eBay away from its flea
market image and towards partnerships with established retailers. The company encouraged
small sellers to transition from the auction format to fixed-price sales. Several changes were
made, including adjusting the fee structure, lowering listing fees for fixed-price sales, and
improving the search engine. Instead of displaying ending auctions first, a new algorithm was
introduced to prioritize highly rated merchants based on price and seller reputation.
Despite these efforts, there were complaints from sellers regarding excessive fees and perceived
favoritism towards larger retailers. Many individuals relied on eBay as a source of income, and
they felt marginalized by the company's strategic shift. Additionally, eBay's stock price had
experienced a significant decline, causing analysts to doubt the company's ability to recover,
especially in the face of competition from Amazon and Google.
However, eBay's acquisition of PayPal proved to be a pivotal factor in its endurance and growth.
PayPal's payment services facilitated online money exchanges and accounted for a substantial
portion of eBay's revenue. The acquisition provided eBay with stability during challenging times
and helped the company regain momentum. PayPal's success allowed eBay's stock price to rise
and protected it from weaknesses in its retail business.
To capitalize on emerging trends, eBay made strategic investments in mobile technology.
Starting in 2010, eBay acquired various companies specializing in mobile applications and
payment solutions. These investments paid off, with eBay reporting billions of dollars in mobile
transactions. The company recognized the potential of mobile commerce early on and positioned
itself as a major player in the mobile space.
Furthermore, eBay expanded its services beyond the online realm by partnering with brick-and-
mortar stores. For instance, it introduced PayPal as a payment option in Home Depot stores and
developed PayPal Here, a credit card processing device for small businesses. These initiatives
aimed to bridge the gap between online and offline retail, allowing customers to make purchases
conveniently across different channels.
The case study also mentions eBay's acquisition of Braintree, a mobile payment gateway, in
response to increasing competition in mobile commerce. This move enhanced eBay's mobile
payment capabilities and eliminated a major competitor for PayPal in that domain.
Throughout its transformation, eBay aimed to strike a balance between adapting to changing
environments and staying true to its core identity. While embracing a more conventional
approach, the company also catered to its original user base of collectors by launching eBay
Collect, an online tool for showcasing collectibles and creating wish lists.
The case study underscores the importance of being aware of the evolving business landscape
and remaining faithful to a company's fundamental principles. eBay's strategic shifts,
acquisitions, and focus on mobile and conventional e-commerce contributed to its revitalization
and ongoing success in the market.
Q1. Contrast eBay’s original business model with its latest proposed business model.
Ans: Contrast eBay’s original business model with its latest proposed business model.
eBay's original business model was built around the concept of an online auction platform. It
provided a platform for individuals to engage in peer-to-peer auctions, where users could bid on
various items listed by sellers. The platform gained popularity as an offbeat startup auction site,
known for its unconventional and diverse offerings.
In contrast, eBay's latest proposed business model involves a significant shift towards traditional
e-commerce and partnerships with established retailers. The company recognized the changing
landscape of online shopping, where consumers were increasingly opting for fixed-price goods
from well-known retailers like Amazon. As a result, eBay decided to move away from its
auction-centric approach and encourage sellers to adopt a fixed-price sales model.
The new business model retains eBay's bold primary colors and symmetrical block letter logo,
but it signifies a more reserved and mainstream image. The focus is on providing a conventional
online shopping experience, with a broader range of products available for purchase. eBay has
also ventured into the mobile commerce space, investing in mobile technology and acquiring
companies specializing in mobile applications and payment solutions.
Q2. What are the problems that eBay is currently facing? How is eBay trying to solve these
problems?
Ans: eBay is currently facing several challenges that have impacted its business. One of the main
problems is a decline in buyer interest and engagement. Consumers have shifted towards simpler
and more convenient methods of purchasing fixed-price goods from retailers like Amazon,
which has affected eBay's auction business. Additionally, search engines and comparison
shopping sites have made it easier for buyers to find products outside of eBay's platform.
To address these problems, eBay has implemented several strategies. Firstly, the company has
adjusted its fee structure to make it more appealing for sellers to list fixed-price items. Lowering
listing fees for fixed-price sales encourages sellers to adopt this model, attracting a wider range
of products to the platform. eBay has also improved its search engine algorithms to prioritize
reputable sellers and display relevant products more effectively.
Furthermore, eBay has formed partnerships with well-known retailers like Toys "R" Us, Dick's
Sporting Goods, and Aeropostale. Through these partnerships, customers who spend $100 at
these retailers' eBay storefronts or websites receive a $10 in-store coupon, incentivizing them to
choose eBay as a shopping destination. These partnerships help eBay tap into the existing
customer base of these retailers and expand its product offerings.
Q3. Are the solutions eBay is seeking to implement good solutions? Why or why not? Are
there any other solutions that eBay should consider?
Ans: Are the solutions eBay is seeking to implement good solutions? Why or why not? Are there
any other solutions that eBay should consider?
The solutions eBay is seeking to implement can be considered good in the sense that they
address the challenges the company is facing. The shift towards a fixed-price sales model and
partnerships with established retailers allows eBay to compete more effectively in the
mainstream e-commerce market. This enables the platform to offer a wider range of products and
attract customers who prefer a conventional shopping experience.
The focus on mobile commerce is also crucial, as it aligns with the growing trend of mobile
transactions. By investing in mobile technology and acquiring companies specializing in mobile
applications and payment solutions, eBay aims to capture a larger share of the mobile market and
provide a seamless shopping experience for mobile users.
However, there are some concerns that eBay needs to address. The complaints from sellers about
excessive fees and perceived favoritism towards larger retailers need to be addressed to maintain
a fair and balanced marketplace. eBay should ensure that it continues to support and provide
resources for small sellers, as they contribute significantly to the platform's diversity and appeal.
In terms of other solutions, eBay could consider improving seller satisfaction by enhancing
communication channels and dispute resolution mechanisms. Providing more support and
resources for sellers, particularly small businesses, can help build loyalty and maintain a thriving
marketplace. Additionally, eBay could explore innovative ways to differentiate its services from
competitors, such as personalized recommendations
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and curated collections that cater to specific customer preferences. This can help eBay stand out
in a crowded e-commerce market and provide a unique shopping experience to its customers.
Furthermore, eBay could consider strengthening its focus on sustainability and ethical practices.
Incorporating eco-friendly options, promoting responsible sourcing, and supporting sellers who
prioritize ethical production can attract conscious consumers who value sustainability. This
approach would align with evolving consumer preferences and differentiate eBay from its
competitors.
Q4. Who are eBay’s top three competitors online, and how will eBay’s new strategy help it
compete? Will eBay be providing a differentiated service to customers?
Ans: eBay's top three competitors online are Amazon, Walmart, and Alibaba.
eBay's new strategy will help it compete with these rivals in several ways. By shifting towards a
fixed-price sales model and partnering with established retailers, eBay expands its product
offerings and enhances its competitiveness in the e-commerce space. The partnership with
retailers like Toys "R" Us and Dick's Sporting Goods allows eBay to leverage their brand
recognition and attract customers who are loyal to these brands.
Additionally, eBay's focus on mobile commerce and investment in mobile technology positions
the company to capture a growing segment of online shoppers who prefer to make purchases
through mobile devices. With the acquisition of companies specializing in mobile applications
and payment solutions, eBay strengthens its mobile capabilities and provides a seamless mobile
shopping experience, which can give it an edge over competitors.
Moreover, eBay's emphasis on personalized recommendations and curated collections can
differentiate its service to customers. By leveraging data and implementing advanced algorithms,
eBay can offer tailored product suggestions based on individual preferences, creating a more
personalized and engaging shopping experience.
In conclusion, eBay's new business model and strategies aim to address the challenges the
company is facing and compete with its top online competitors. Through a shift towards fixed-
price sales, partnerships with established retailers, investment in mobile commerce, and
personalized recommendations, eBay seeks to provide a differentiated service to customers,
expand its product offerings, and enhance its competitiveness in the evolving e-commerce
landscape.
Summary Case study 2:
The case study focuses on the success story of ExchangeHunterJumper.com, an online platform
that helps owners and professional trainers sell high-end competition horses in the niche market
of the high-end horse show circuit. The founder and owner, Dagny Amber Aslin, shares her
journey of building the online brand and overcoming various challenges.
Aslin's experience in the horse world and internet marketing played a crucial role in the success
of her business. She understood the challenges faced by professional horsemen and saw the need
for a reliable source to connect buyers and sellers in the industry. She developed an organized
and professional process for preparing online horse sale advertisements, requiring detailed forms,
quality photos, and videos to accurately portray each horse's capabilities.
To build trust and credibility, Aslin personally reviewed all potential advertisers and insisted on
high-quality visuals. She focused on quality over quantity and adhered to strict screening
processes. This approach helped her establish a solid reputation in an industry that traditionally
relied on personal connections and had low trust in internet advertising.
The Exchange's business model involved charging sellers and trainers a fee for premium listings,
which included detailed horse profiles, photos, show records, lineage, and videos. They also
introduced a Sale Barn option for high-volume operations, providing a cost-effective marketing
solution. The Exchange emphasized the importance of regular updates and marketing campaigns
to keep each horse's listing fresh and attract potential buyers.
Aslin recognized the significance of social media and experimented with various platforms like
RSS feeds, YouTube, Facebook, Twitter, and Pinterest. Facebook proved to be the most
successful in generating traffic to the website, and Aslin used Google Analytics and short URL
services to track the effectiveness of her social marketing efforts. She focused on creating
engaging content and determining the optimal frequency of posts.
The Exchange's website played a crucial role in its e-commerce presence. Aslin continuously
updated and improved the design, incorporating user feedback and market needs. She recently
hired a professional web development team to convert the site into a dynamically driven content
management system to enhance functionality and user experience.
In addition to the website and social media, The Exchange used email campaigns, magazine
advertising, and word-of-mouth marketing strategies. They transitioned from printed booklets to
online marketing to reduce costs and increase the focus on digital platforms.
Overall, the success of ExchangeHunterJumper.com can be attributed to Aslin's industry
knowledge, dedication to quality, and adaptation to evolving technology and marketing trends.
Through her strategic approach, she managed to build a reputable brand and effectively connect
buyers and sellers in the high-end horse show circuit.
Q1. Find a site on the Web that offers classified ads for horses. Compare this site to
exchangehunterjumper.com in terms of the services offered (the customer value
proposition). What does The Exchange offer that other sites do not?
Ans: When comparing a site like exchangehunterjumper.com to other classified ads sites for
horses, such as horseclicks.com, equine.com, or dreamhorse.com, it's essential to consider the
services offered and the customer value proposition. The Exchange stands out by providing
unique features and benefits, which include:
a) Targeted Niche: The Exchange focuses specifically on the hunter/jumper market, catering to
buyers and sellers interested in this discipline. This specialization allows for a more focused and
tailored experience for users.
b) Verified Listings: The Exchange ensures that all horse listings go through a verification
process to confirm accuracy and legitimacy. This feature provides peace of mind for potential
buyers, as they can trust the information provided.
c) Professional Network: The site emphasizes its connections with reputable trainers, riders, and
other industry professionals. This network enables users to access a trusted community and
potentially connect with experts who can provide guidance or assistance.
d) Auction Platform: The Exchange offers a unique auction feature, allowing sellers to list horses
for sale via an auction format. This approach can generate excitement and competition among
buyers, potentially leading to higher sale prices.
e) Customized Search Filters: The site provides advanced search filters that allow users to refine
their search based on specific criteria, such as price range, age, height, and location. This feature
enhances the user experience by enabling them to find the most relevant listings quickly.
Q2. In what ways were social media effective in promoting The Exchange brand? Which
media led to the highest increase in sales and inquiries? Why?
Ans: The Exchange effectively utilizes social media platforms to promote its brand and engage
with its target audience. The specific ways in which social media was effective include:
a) Building Awareness: Social media platforms like Facebook, Instagram, and Twitter were used
to create brand awareness by regularly sharing engaging content, such as featured horse listings,
success stories, rider spotlights, and industry news. These efforts helped expand the reach of The
Exchange and attract a larger audience.
b) Visual Appeal: Social media platforms are highly visual, allowing The Exchange to showcase
attractive photos and videos of the horses available for sale. This visual content can capture the
attention of potential buyers and create a desire to learn more about the horses and the services
offered.
c) Interaction and Engagement: Social media enables direct interaction with followers through
comments, direct messages, and sharing. The Exchange actively responds to inquiries, engages
in conversations, and addresses concerns, thereby building trust and rapport with its audience.
d) Referral Traffic: Social media platforms act as referral sources, driving traffic to The
Exchange website. By sharing links to specific horse listings or relevant articles, social media
channels can direct interested users to the site, potentially leading to increased sales and
inquiries.
In terms of the media that led to the highest increase in sales and inquiries, it would require
specific data analysis from The Exchange's marketing team. The impact of social media
campaigns can vary based on factors such as the platform's popularity, the target audience's
preferences, and the effectiveness of the content shared. The marketing team would need to
analyze metrics such as website traffic, conversions, and lead generation to determine which
media channels and campaigns yielded the best results.
Q3. Make a list of all the ways The Exchange attempts to personalize its services to both
buyers and sellers.
Ans: The Exchange strives to personalize its services for both buyers and sellers. Some of the
ways they achieve this include:
a) Detailed Horse Listings: Sellers are encouraged to provide comprehensive information about
the horses they list, including details about their training, competition history, temperament, and
health records. This level of detail allows buyers to make informed decisions based on their
specific requirements.
b) Customized Search Filters: The Exchange's website offers advanced search filters that allow
buyers to narrow down their search based on specific criteria, such as price range, age, height,
location, and discipline. This feature enables buyers to find horses that align with their
preferences quickly.
c) Concierge Service: The Exchange offers a personalized concierge service, where buyers can
work directly with a knowledgeable representative who can assist them throughout the buying
process. This personalized service ensures that buyers receive guidance and support tailored to
their individual needs and preferences.
d) Buyer-Seller Communication: The Exchange facilitates direct communication between buyers
and sellers, allowing them to discuss specific details, ask questions, and negotiate terms. This
direct interaction enables a more personalized and transparent experience, fostering trust and
facilitating successful transactions.
e) Featured Listings and Recommendations: The Exchange may feature select horse listings or
provide personalized recommendations based on a buyer's preferences and search history. This
feature helps buyers discover relevant options that match their interests and requirements,
enhancing the personalized nature of the service.
f) Community Engagement: The Exchange aims to foster a sense of community among its users.
They encourage buyers and sellers to share their experiences, success stories, and testimonials.
By creating a supportive and engaged community, The Exchange enhances the personalized
experience by connecting individuals with shared interests and experiences.
g) Educational Resources: The Exchange provides educational resources such as articles, guides,
and videos related to horse care, training, and competition. These resources aim to empower both
buyers and sellers with valuable information, enabling them to make informed decisions and
enhance their overall experience.
Overall, The Exchange emphasizes personalization through comprehensive listings, customized
search options, direct communication, concierge services, and community engagement. These
efforts cater to the specific needs and preferences of both buyers and sellers, enhancing the
customer experience and establishing The Exchange as a trusted platform in the horse trading
industry.
