EBay & Digital Music Industry

Presented byRebecca Martin

(F12034)Neha Sara Kurian

(F12043)Tom Mathew (F12057)

Tresa Maria Joseph (F12058)

Introduction to ebaY

Started in 1995 -Online Auctioneers

B2B, B2P, P2P model

Sell and buy goods of all kinds including -Collectibles, artwork, cars boats & real estate.

Users grew from 41000 to over 90 million in seven years.

CAGR of merchandise sales b/w 1996 -2003 was 220 %

Selling Formats

Online Auctio

nBuyers bid on items

Fixed Price

Store Inventor

yUsers

manage and

showcase their

inventory

Competitors

Q1) Should the company grow by securing global presence ?

• Yes! – and that’s what they did

• Adopted first mover strategy – beat yahoo, amazon to new

markets

• Acquired other auction formats in international markets

• Perceived as brand with most awareness and geographical

scope

THREATS

• Hard to replicate ebaY credibility on other sites

• Users - Comfort with different platform may be hard to

replicate

Q2.)Should ebaY grow their fixed price model?

• Fixed price gaining popularity over auctions

• Availability of all three formats made ebaY

attractive to users

• Able to generate bigger fees through fixed price

• Shift means direct competition with amazon, yahoo

etc

• Cultures worldwide comfortable with bargaining-

more receptive to ebaY’s auctioning model

• CEO wary of abandoning core competency

What they did 2008: New CEO, John Donahoe states –

will shift focus to fixed price system Continues both formats

Introduction to Music Industry The music industry or music business consists

of the companies and individuals that make money by creating and selling music

Not just musicians but many others

The music industry has been undergoing drastic changes since the advent of widespread digital distribution of music

The largest music retailer in the world is now digital: Apple Inc.'s iTunes Store. 

Digital Music IndustryDriving Forces

Growth in levels of demandPopularly given category of gifts, increase in number of new users due to technological advances Product innovationNew product designs, enhanced functionality and aesthetics, viewed as “status symbols” Format war and rights managementMultiple formats with multiple format owners (i tunes, Sony , Windows Media Audio), Digital piracy

Driving Forces contd….

ConvergenceMore versatile products e.g. iPods able to display and transport pictures, cell phones with mp3, car audio systems

Growing use of the internetIncreasing demand and supply for music, need for portability, ability to download large amount of music in relatively short time

Changes in who uses the product and how it is usedConsumers are less technologically sophisticated and more demanding on functionality, style and priceChange in strategy and tactics employed by major players

Further Analysis

Effect of Driving Forces on demand

Increased competition

Bargaining of industry participants

Higher profitability

Thank you