PAYCHEX BUSINESS SOLUTIONS AND EBAY

Paychex Business Solutions and EBay

Paychex Business Solutions and EBay

eBay

eBay is an online provider of marketplaces for the sale of goods and services. It also provides commerce, platforms, online payments services and online communications offerings to individuals and businesses (Alm and Melnik, 2010). The company generates about 75% of its revenues from the US, Germany and the UK. It is headquartered in San Jose, California and employs 16,200 people. The company recorded revenues of $8,541.3 million during the financial year ended December 2008 (FY2008), an increase of 11.3% over 2007. The operating profit of the company was $2075.7 million in FY2008, an increase from $613.18 million in 2007. Net Profit in FY2008 was $1,779.5 million as compared to $348.3 million in 2007.The increase in profits is attributed to acquisitions and increased revenues from advertising and the payments business.

eBay has a strong market position. Over the years, the company has built a strong brand and by 2009 the brand value stood at $12.9 billion and eBay was ranked 54th in brand value rankings. eBay has focused on a swift increase in the number of users and number of product listings. As of 2009, eBay has 88 million active users and about 150 million listings worldwide and in any given day, has about 14 million listings. Increased number of customers contributed to the growth of the company and it emerged as one of the largest global online auction website with presence in 39 countries. Strong customer base and market position provides competitive advantage and gives eBay considerable bargaining power which will have a positive impact on the top line of the company.

Mission Statement

Company's mission statement is to “provide a global trading platform where practically anyone can trade practically anything.” (http://www.samples-help.org.uk/mission-statements/ebay-mission-statement.htm)

Vision Statement

eBay's vision is to help anyone buy or sell practically anything in the world.

Competitive Strategies

The key elements of eBay's strategy are to broaden the eBay trading platform, develop global markets, enhance features and functionality, and foster eBay community affinity. eBay operates on a unique business model which unites buyers and sellers in an online marketplace. This business model overcomes the inefficiencies of traditional marketplaces, which tend to be fragmented and offer a relatively limited variety of goods. This business model also saves on the transaction costs per sale, due to absence of intermediaries. Further eBay maintains zero inventory and therefore costs related to inventory management are absent. In particular, this model has been successful in addressing markets of new and scarce goods, end-of-life products, and used and vintage items, which would otherwise be difficult to locate and purchase. It is a flexible and cost effective model that enabled eBay to increase the number of members without adding significantly to its cost structure and hence increase the company's revenue base. In order to maintain its competitive edge and continue its growth, eBay will need to identify new marketing strategies and guide the organisation into executing these strategies effectively.

Performance

eBay's inability to expand its systems may limit their ...