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eBay vs. Amazon Team Presentation

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Bryson Seed

on 16 March 2011

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Transcript of eBay vs. Amazon Team Presentation

Profit Formula vs. Online
Industry vs. Prepared By: Jessica Lee Bryson Seed Farhin Zaman Industry
Overview Global Market No barriers for new market entrants Increased availability of substitute products Highly competitive industry Two major industry participants 1 2 3 4 5 Value Proposition Endless Variety
Low Price
Integrated Payment Process
Feedback Forums Focused Variety
Low Price
Reliable / Free Delivery
Considerable Product Details
Convenient Revenue Model Cost Structure Margin Model Resource Velocity Two Revenue Streams:
Marketplace (eBay)
Payments (PayPal) Mostly fixed
Salaries, data centers
No inventory Both have millions of transactions Cost-driven volume operations model Business Strategy Become leaders in providing an e-commerce platform that provides customers with the best shopping experience available
Innovate into mobile ecommerce
Reduce cost structure by $2 billion over the next three years 360 of 452 goals centered around improving customer experience
Maximize long-term free cash flow with high rates of return Product / Market Focus Offers products from vendors as well as 3rd parties
Specialized selections
Revenue from sale of products and Kindle, as well as fees from 3rd party sellers
Available worldwide No central product focus
Endless categories
Revenue from eBay platform and PayPal / Bill Me Later
Available worldwide Product / Market Focus Auction Process
Peer Review
Payments Retailing Process
Product Review Both eBay and Amazon rely heavily on: Core Activities R&D Marketing HR Three Revenue Streams:
Developers Mostly variable
COGS and fulfillment
Most assets in inventory Value-driven volume operations model Quick
Comparison Business Model Goals Key Resources Global Facilities Strategic Alliances Key Resources of Amazon and eBay includes: Human Capital Technology Brand Strength Differences Similarities Key Processes Protection of intellectual property rights

Regularly track metrics indicative of long-term profitability

Develop intuitive user interfaces, customer tools and transaction processing tools
January 2011:

Amazon’s annual # of unique visitors increased 12% eBay's has dropped by nearly 14% eBay.com Amazon.com Amazon.com has surpassed eBay.com in both Daily Reach and Daily Traffic Rank in 2010 Effectiveness of
eBusiness / Website Website Performance Metrics Customer Satisfaction
Buyers Amazon takes customer service seriously and holds 3rd party sellers to high standards Customer Satisfaction
Sellers January 2011 AuctionBytes report surveyed 2,800 sellers : Great customer service but low profitability 7th 13th Poor customer service but high reach and ease of use Financial Performance Amazon achieves high growth in revenue but operates at a low profit margin Comparatively, eBay’s revenue is much less than Amazon’s, but eBay retains considerably more of its revenue as profits Prognosis appears to be more viable in the long run compared to
Continuous emphasis on customer satisfaction

High market capitalization

Capital intensive business model is difficult to imitate

Improved buyer protection provided by Amazon compared to eBay’s constant issues with buyer and seller fraud. Questions ? Amazon appears to be more viable in the long run compared to eBay due to:

High market capitalization

Continuous emphasis on customer satisfaction

Capital intensive business model is difficult to imitate

Improved buyer protection provided by Amazon compared to eBay Annual goal setting based on value driven metrics

Talent acquisition

Customer relationship management
Prognosis Internet Retailer Top 500 Guide: Netflix lost 1st place in Q4 2010 to Amazon eBay's score improved the most amongst e-retailers
Increased 3% in score to 87 / 100
Full transcript