1 The Quantitative Strategic Planning Matrix (QSPM)

STRATEGIC ALTERNATIVES Enhance security features: The sellers details will be provided to the buyer upon payment AS TAS

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Key factors Opportunities 1) The need for substantial resource investments in technology and marketing in order to remain competitive. 2) Buyers and sellers enjoy trading among a wide selection of goods and services in a secure, trusted, and efficient commerce environment. 3) Profitability affected by currency exchange rates. 4) Online classifieds help people meet, share ideas, and offer goods/services 5) If the U.S. dollar weakens against foreign currencies, transactions conducted in foreign currency denominations will increase. Threats 1) Tax compliance will increase costs.

Weight

AS

TAS

0.06

0.18

0.12

0.09

0.27

0.36

0.08

0.08

0.07

0.07

2 2) Weak global economic conditions. 3) Competition is intense in communications services and subject to rapid technological change. 4) Amazons strong growth and satisfied customer. 5) Legislation is in effect which requires collection of taxes beginning after December 31, 2010. 6) Financial measures will be negatively impacted by a rise in the value of the U.S. dollar. 7) Dollar and the lingering weak economy with high unemployment. 0.05 0.05 -

0.09

0.27

0.36

0.08

0.07

0.08

8) Competition is expected to increase in the future because barriers to entry in this 0.07 segment are low and new online sites can be launched at a nominal cost. 9) Declining economic environment. Total Strengths 1) EBays Marketplaces brings buyers and sellers together 24/7. 2) In 2008, eBay.com generated approximately $59.7 billion in gross merchandise revenues. 3) EBay.com offers a sense of community to buyers and sellers. 4) In 2007, eBay sold nearly $60 billion goods, which equates to worldwide eBay users trading more than $1,900 worth in 0.07 0.06 1.0

0.07

0.07

0.21

0.28

4 0.05

0.20

0.15

0.06

0.06

0.18

4 0.06

0.24

0.18

3 goods every second. 5) Partnership with General Motors. 0.04 1 3 0.04 0.21 3 4 0.12 0.28

6) The success of eBay is built on similar customer-centric entrepreneurial business 0.07 models that focus on customer-driven value creation. 7) EBay provides the virtual marketplace auction. 8) EBay compared to Amazon achieved High gross profit margins. 9) As of December 2008, approximately 516,000 online storefronts were listed in locations across the globe. Weaknesses 1) EBays Marketplaces division reported $1.26 billion in revenue, a 14 percent year-over-year decline. 2) EBay may owe penalties from illegal listings of counterfeit and stolen goods. 3) EBay has recently been involved in litigation with Tiffany & Co., Rolex, Louis Vuitton, Christian Dior, LOral, and Lancme. 4) Decreased to almost double for working capital is considered as weakness for eBay. 5) Customer support is challenged from greater trade activity and an increased number of users. 6) If revenue significantly declines, eBay may not be able to meet contractual obligations. 0.08

0.32

0.24

0.05

0.20

0.15

3 0.08

0.24

0.32

4 0.05

0.20

0.15

0.06

0.07

0.08

0.05

0.04

4 7) EBay Revenue Growth of rate has been decreasing for the last 3 years. 8) Increased volume and greater complexity requires additional expensive investments in hardware, software, and personnel. Total 4 0.16 2 0.08

0.04

0.05

1.0

2.87

3.04