Role of e-Commerce in Strategy of eBay

eBay is a company that could not exist without the World Wide Web, and it greatly expanded the way in which consumers and companies think about the Web. eBay succeeded in creating a new business paradigm at a time when the "dot-com" revolution was well underway. Unlike many of the other companies that came into existence at that time, eBay survived and even thrived in the new electronic market, and did so without establishing a physical brick-and-mortar presence first. Today, eBay has evolved its business model to the point that it not only includes the traditional auction site, but also includes the ability for consumers to "buy it now" without engaging in the auction process. New products are offered on the site as well as used products, and corporate sellers are actively recruited to use eBay as a way to market their products. In this way, the company is providing an additional method of distribution that bypasses not only traditional brick-and-mortar stores, but also corporate retail portals. The company has tried and failed to establish physical presences through acquisitions such as Butterfield & Butterfield, and today, the company has returned to its eCommerce roots. This research considers the role of ecommerce in the strategy of eBay.

Although the World Wide Web was, at one time, expected to bring about a revolution in management--resulting in the so-called "new economy," companies learned that old-fashioned attention to profita

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ion. The company quickly worked to form strategic alliances with corporations, and implemented its Buy It Now feature that allows consumers to avoid the challenges of the auction and purchase items at a predetermined price, generally higher than most bids for a particular item. The company continues to innovate and to strengthen its corporate ties. In mid-2003, for example, eBay announced its Anything Points, a program that is similar to frequent flier miles in that customers of eBay's partners--including Hilton and Sprint--can use points accrued at those businesses to make purchases on eBay. Some companies may not feel that they can justify a standalone loyalty program, which can be expensive to administer and unattractive if the required points are too difficult to achieve, but a joint program such as this can help attract new customers, or encourage current customers to return. This program has the potential to reach 69 million consumers--the number registered with eBay at the time the program was announced (Conhaim 29). When looking at the marketing mix, eBay continues to provide essentially the same product--a forum for selling goods and services--although it has expanded that product to include auctions, traditional sa

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