eBay To: Board of Directors From: Management Team Subject: ebay: Meeting the Global Growth Challenge Date: October 29, 2008 Executive Summary: Introduction: E-bay is the focus enter more international markets; such as Russia, Denmark, Vietnam and Türkiye. Also, focus on fixed-price options and advanced opportunities with multiple sellers and specialty items. The strategic impact on the issues identified above and the best direction E-bay should move to advance business growth and operating margins will be discussed. Industry Analysis: Internet users around the world are on the rise. People around the world are adapting to using the Internet (see Figure 1). With a large increase, eBay would be able to market worldwide. The company would make a considerable investment to expand into countries such as Russia, Denmark, Vietnam and Türkiye. With current investment in 33 countries, a small step to invest in other countries would result in a significant gain in market share. The most positive outlook on international market expansion is that the barrier to entry is relatively low. Competitors will need to enter the market and be able to know how to attract buyers, what will sell and how much, and how to control their budget. Competitors also lack the knowledge developed from years and years of experience in the online auction industry. E-bay has the tacit knowledge and experience to continue growing in the international market. The online auction sector will also give a lot of strength to suppliers. As selling costs fall, this will force competitors to find ways to increase the quantity of suppliers and attract new sellers by offering higher profits per sale. In return, this will really benefit E-bay. Competitor Analysis: Amazon, another major competitor, will continue to provide more value to the customer in terms of ease, selection, and availability, which in turn will continue its competitive pressure on eBay. To completely win over the competition, eBay will have to increase its fixed price options. Both Yahoo and Amazon offer fixed-price products that attract a diverse customer base. Some may not be looking for a bargain, but a particular item that is hard to find. Fixed price trading is expected to grow to nearly 50% by 2010 (see Figure 5). This causes enormous emphasis, because it is a growing market.