Ebay: King Of The Online Auction Industry Essay

494 WordsFeb 4, 20122 Pages
eBay: King of the Online Auction Industry (on the class website in 3 parts, download all 3) When eBay started in 1995 it created the online auction industry. Going into 2000, eBay had created the world’s largest Web-based community. eBay listed over 3 million items in over 3,000 categories that allowed people to buy and sell almost anything without having to meet face-to-face. However, the online auction industry was changing, with new competitors, more business participants, and greater expectations for security and service. eBay had put together a management team that had produced exceptional growth, but would they be able to face the challenges of a maturing, competitive industry? This is primarily a problem case. It is concerned with the difficulties firms face when trying to secure the benefits of success and rapid growth. eBay is the first and most successful online auction center, but now has to face increasing competition. It is easy for competitors to copy eBay’s basic model, but so far eBay has maintained their market leadership. The question is what is the source of eBay’s competitive advantage and is it sustainable. The case is interesting because, as a company, eBay challenges some basic assumptions about business organizations. (Who is eBay’s customer? Who are its suppliers? How does if create value?) The Lincoln Electric Company, 1996 (on the class website) Lincoln Electric is a classic 20th century firm. They have been around for more than 100 years and are one of the world’s largest producers of arc-welding products, not exactly a cutting edge technology. However, LE has been recognized as one of the ten best managed factories in the country, comparable to GE and other 21st century firms. What sets LE apart is their innovative and thoroughly modern compensation plan. Their incentive management plan has been studied by firms and students

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