I.

Annual objectives and policies for

the company
Based on the new long- term strategy for EBay, we recommence some more details to keep in
track with the strategy

A. Annual objectives:

- Increase 1 % of market share per year

- Increase up to 10% of total revenue and decrease 2% cost for inventory and
marketing

- Increase 10% the number of registers and limit the number of virtual
customers

- Establish at least two representative offices in nuclear sites such as Shanghai,

Guangzhou, Shenzhen and the target cities in Hong Kong

- Expand the new categories

B. New policies for new strategy:

- Rewards for staffs that reach high performance at work and do not absence
any workdays.

- Every year, the Head of all the Department has to have a special training with
purposes are improving skills and qualifications and update some new
technologies.

- Two weeks training for current staff and one month training for the new stuff.
Employees will be taught English if they do not know and depending on the
department, they will be required about other languages.

- Employees allowed to use their personal e-mail and account to buy items on
eBay website
 - Every month, the monitor of eBay has to have an unscheduled inspection

II. COMPETITIVE PROFILE

MATRIX
A. Matrix

4 means a major strength

3 minor strength

2 minor weakness

1 major weakness

CPM eBay Taobao Yahoo

Critical Success Factors Weight Rating Weight Rating Weight Rating Weight

Score Score Score

Market Share 0.18 1 0.18 5 0.9 2 0.36
Profit Margin 0.08 2 0.16 4 0.32 3 0.18
Variety of Product 0.10 5 0.5 4 0.4 3 0.3
Customer Satisfaction 0.18 2 0.36 5 0.9 3 0.54
Customer Service 0.04 3 0.12 4 0.16 3 0.12
Price competitiveness 0.05 3 0.15 5 0.25 4 0.2
Advertising 0.06 2 0.12 4 0.24 5 0.3
Global Expansion 0.1 5 0.5 2 0.2 4 0.4
Supplier network 0.06 4 0.24 3 0.18 4 0.24
Software Technology 0.05 4 0.2 3 0.2 5 0.25
Brand reputation 0.1 2 0.2 5 0.5 4 0.4
Total 1 2.73 4.25 3.29

strongest
 B. Analysis
From the CPM analysis we can see that eBays CPM value is 2.73 which is the weakest company
compares to the other two in this industry although eBay is the World's largest online auction
website and its aggressive expansion. They just have a few critical success factors such as variety
of product, global expansion, supplier network and software technologies, which are ranked
highest, may lead the China online market. The rest of them, expected customer service and price
competitiveness are in the average are underestimated because they have not enough competitive
in the market. On the other hand, Taobao is the strongest player in this industry because it has the
highest value score in CPM analysis (4.25). 8 out of 11 factors are dominated by Taobao, 3 of
them: market share (80% in market), customer satisfaction (77%), brand reputation is the most
significant factors that help Taobao success in China industry. The other reason for that may
because Taobao is under the management of Alibaba Group- a huge domestic organization, so
they have more benefits and supports from China government and domestic consumption. The
other competitor- Yahoo is in the middle, which is neither so prominent nor overshadowed.
Based on some data from two main competitors, eBay should create their strategies not only to
promote their strengths and it also changes their weakness in order to improve their ratings in the
industry.

III. INTERNAL FACTOR

EVALUATION (IFE) MATRIX
A. Matrix

Major weakness is represented by 1.0

Minor weakness is represented by 2.0

Minor strength represented by 3.0

Strength in average represented by 4.0

 Major strength represented by 5.0

Total score < 2.75 is weak, >2.75 is high

Table 1: Internal Factor Evaluation Matrix (IFE)

STRENGHTS WEIGHT RATING WEIGHTED

SCORE
World's largest online auction website and 0.15 5 0.75
aggressive expansion
Provides variety of products 0.10 4 0.4

The unique of business model 0.05 3 0.15

A strong online transaction (PayPal) 0.15 4 0.6

Feedback process 0.05 3 0.15

WEAKNESSES WEIGHT RATING WEIGHTED

SCORE
Adapt to local needs and customer 0.2 1 0.2
satisfaction

Build a community effect in the country 0.05 2 0.1

Gain market share due to rising costs and 0.05 1 0.05

intense competition

Forming a partnership with former rival 0.2 1 0.2

TOTALS 1.00 2.6 ( < 2.75

=> weak)

B. Analysis
The total weighted score value is 2.60 ( lower than the average point -2.75) which means eBay
internal position is weak but not worst because the difference between the points is not high. The
two major strengths of eBay, which are recognized by the industry, are the World's largest online
auction website and aggressive expansion; a strong online transaction (PayPal). Two of them
account for a large portion in success of the company (total 30%) and are ranked highest.

EBay have 14 international websites and operated in more than 30 countries that 142 million it
potential customers can buy and sell their products internationally.

Then, they all have to pay through PayPal- that makes it become the strongest online transaction
around the world. Over the third of eBay revenue comes from PayPal. The money that eBay
make through PayPal comes through transaction fees form sellers and people who use it to
transfer money. Therefore, eBay should expand PayPal into international market would enable
eBay to provide a simply way to conduct transaction across market borders. It company also
consider the growth potential developing markets would attract many new customers, and thus
increasing eBays revenue.

However, their strengths are not strong enough to fill their weaknesses. The most critical
weakness of eBay is the adaption to local needs and customer satisfaction, which account for the
largest share of internal factor (20%), after that they company has two more weaknesses gain
the market share and forming the partnership with former rival . Fail to adapt customer
satisfaction as well as underestimate the important of marketing that lead eBay lose their market
in China.

Although, they cooperated with Xiu.com, announced a joint-venture with PChome Online and
Tom Online Ic and acquired Eachnet, all of them didnt help eBay to overcome its knots. The
reason is all of the companies that eBay created the partnership are too small, whereas their
competitor is Alibaba group- which have 80% market share and the organization also make a
strategic alliance with Yahoo- the multinational firms which have a few reputation in the world.

IV. Financial Ratio

FINANCIAL RATIO ANALYSIS

Period Ending
EBay Alibaba Industry Summary Analysis
Dec 31 ,2013
 Short -term solvency, or liquidity, ratios
Based on this data, we can see that both
Current ratio 1,84 1,80 N/A eBay and Alibaba have good advantage in
pay off their current liabilities and perform
better than its industry. Therefore, Alibaba
Quick ratio 1,74 1,80 0,64 seems to be stronger than eBay because
they have higher potential in covering its
debt which is faster than eBay in overall.
Cash ratio 0,36 1,27 N/A Alibaba has better advantages than
eBay and the industry