Example research essay topic: A Corporate And Financial Analysis Of Ebay.inc – 1,377 words

Executive Summary Section One – Corporate Level
Part 1 – Brief History of the Corporation eBay was
founded by Pierre Omidyar’s in his San Jose home
in September of 1995, under the name AuctionWeb.
From its early beginnings it was meant to be a
marketplace for the sale of goods and services for
a variety of interested individuals. It was
incorporated in 1996, and has since grown to
become the worlds largest most financially
successful online auction company. After realizing
the overall potential of his idea, Pierre and his
cofounder Jeff Skoll brought on Meg Whitman, as
CEO, to efficiently handle the growing popularity,
and sustain eBays success. Meg earned a MBA at
Harvard Business School, and had gained high
acclaims and top-shelf experience at the
successful company of Hasbro. With the addition of
Meg Whitmans expert experience eBay soon expanded
rapidly to service a wide variety of buyers and
sellers, and in September of 1998 the company went
public. The shares were initially offered at $18
and immediately rose to $47 by the end of the day.
The company has not faltered since, rising to
revenues exceeding $700 million by 2001.

In its
short history, eBay has chosen several different
paths than traditional companies to get to where
it is. Most all of eBays advertisement was done
through word of mouth and through agreements with
a few Internet companies such as AOL and Disney.
The large portion of savings from low advertising
costs is invested in innovative marketing
strategies to keep them ahead of its competitors.
I believe that eBay is has achieved such an
incredible amount of success in such a relatively
short period of time because of its beginning
philosophy of giving power to its users. With that
foundation of loyal users it is able to expand its
name by word of mouth and continue to grow to
service a wider variety of users and their
products. Also eBays ability of provide access to
such a broad variety of products at relatively low
prices will continue to attract more users and
profits in the future. Part 2 – Corporate Level
Analysis 1. Does the corporation have a mission
statement? Does it define the business, identify
the major goals, and articulate the corporate
philosophy? Yes, eBay does have a mission
statement.

I believe that this mission statement
defines the business as broad and simplistic as
possible. It is very broad and short, not
identifying any of its specific goals. It is very
short and simple eBays mission is to develop a
global online trading platform that will help
practically anyone buy or sell practically
anything. The statement describes the ultimate
goal of the business without describing any other
goals of the company. I think it demonstrates how
eBays philosophy is simple and down to earth,
creating a very inviting environment to it users.
2. Is their mission statement appropriate for
them? Explain.

I believe that eBay thrives on its
image of providing a simple way for its users to
get the very best deals on trading online.
Although short, I think that their mission
statement describes not only the ultimate goal of
the company but some of their character as well.
After researching more about the company it seems
to fit perfectly within their overall values and
philosophies. Also because their market is so
broad it helps to have a very broad mission
statement to allow them to make changes in their
focus without altering their overall goal. 3. How
vertically integrated is the corporation? If it is
vertically integrated, is it pursuing a strategy
of taper of full integration? eBay is not
vertically integrated. It is a company that simply
supplies a medium for person to person trading. It
connects the buyer to the seller and allows for an
easy transaction between the two.

The products are
registered and displayed on the site by the
sellers, and when an item is purchased the seller
ships it to the buyer, and eBay earns a commission
from the sale. 4. How diversified is the
corporation? It is highly diversified in the types
of products it provides. The range of products
varies from collectibles to cars, almost anything
that a user is willing to sell. The site makes it
easy for the buyers to locate the products with
everything divided into categories and a
convenient search engine for quick access to a
specific item. Although it provides a wide variety
of products eBays area of business is relatively
simple; it only offers a stable connection between
the buyer and a seller.

I believe the overall
concept of business for eBay is simple, to provide
the most convenient, reliable, and cheapest way
for users to buy and sell products on the
Internet. 5. Is the corporation transferring
skills, realizing economies of scope, and/or
achieving supply chain efficiencies through
strategic alliances? eBay has many different
alliances with a variety of major companies. Many
of its partnerships have provided it with a vast
amount of resources allowing it to grow more
rapidly. It has various marketing alliances, which
associates major brand names with eBay, and helps
to attract new users through advertisement and
name recognition. Also a recent alliance with
Microsoft has allowed eBay to dramatically upgrade
its technology of API (application programming
interface), which allows them to fully integrate
into other sites across the Internet.

These
partnerships are key to eBays overall success and
it offers a variety of benefits to it allies as
well. Many of its partners receive benefits such
as brand name recognition, increased user base,
and strategic networking opportunities. This vast
network of partners is allowing eBay to continue
its rapid expansion, creating new markets,
increasing technology, and bringing on a broad
range of new users. 6. Which division/business
contributes the most to competitive advantage?
eBays key factor in gaining competitive advantage
is its marketing division. eBay has made
arrangements with over 13,000 partners which has
helped it to drive user growth by putting eBay in
front of more people than any of its competitors.
Its powerful marketing promotions with such
diverse brands such as AOL Time Warner, Disney,
Visa, The History Channel and General Motors is
critical in bringing in new users and user
retention.

eBays heavy concentration on expanding
its promotions and partnerships has continued to
draw new users away from its competitors, develop
strong user loyalty, and increase brand
recognition. 7. Which division/business, if any,
detract from competitive advantage? One of the
major aspects of eBay that detracts from their
competitive advantage is their limited operating
history. The company was formed as a sole
proprietorship in 1995 and was incorporated in
1996. This causes eBay to be competing with
companies with such longer histories, larger
customer bases, and greater brand recognition.
Most of their competitors have significantly
greater financial, marketing, technical and other
resources than eBay due to their rapid growth. I
believe that this significantly short operating
history puts eBay a considerable competitive
disadvantage.

This disadvantage may cause eBay to
be forced to make decisions that may harm its firm
in order to stay competitive. 8. Is the
corporation involved in international operations?
Yes, eBay has expanded its operations to various
countries worldwide. eBay is expanded is online
trading platform globally to many countries that
generate a majority of the worlds e-commerce
revenue. In 2000 it entered the online trading
market in Japan, Canada, France, and Austria. In
2001 eBay expanded to Italy, South Korea, Europe,
Ireland, Switzerland, and New Zealand.

With its
global expansion eBay has acquired strong
leadership positions in 15 of the top 20 global
markets. Part 3 – Financial Analysis 1. Provide a
full financial analysis of the corporation over
the past three years, including comparison to
industry averages or leading competitors.
eBay.com, Inc. Amazon.com, Inc. Year Ended Dec, 31
Year Ended Dec, 31 1999 2000 2001 1999 2000 2001
Income Statement Revenues $224,724 $431,424
$748,821 $1,639,839 $2,761,983 $3,122,433 Cost of
Revenues (57,588) (95,453) (134,816) (1,349,194)
(2,106,206) (2,323,875) Gross Profit 167,136
335,971 614,005 290,645 655,777 798,558 Operating
Expenses (170,509) (300,977) (473,579) (896,400)
(1,519,657) (1,210,815) Operating Income (Loss)
(3,373) 34,994 140,426 (605,755) (863,880)
(412,257) Other Income 23,833 46,337 41,613 45,451
40,821 29,103 Other Expenses (10,893) (33,037)
(91,591) (159,664) (588,214) (184,123) Net Income
9,567 48,294 90,448 (719,968) (1,411,273)
(567,277) Balance Sheet Assets Cash $221,801
$201,873 $523,969 $133,309 $540,282 $822,435 Other
Current Assets 243,506 473,591 359,836 878,869
667,638 538,694 Total Current Assets 465,307
675,464 883,805 1,012,178 1,207,920 1,361,129
Other Investments/Assets 504,518 506,939 794,724
1,459,373 429,627 774,040 Total Assets 969,825
1,182,403 1,678,529 2,471,551 1,637,547 2,135,169
Liabilities & Equity Accounts Payable $32,133
$31,725 $33,235 $463,026 $444,748 $485,383
Short-term Debt 15,781 15,272 16,111 14,322 14,992
16,577 Other Current Liabilities 45,127 90,445
130,793 261,587 461,674 472,996 Total Current
Liabilities 93,041 137,442 180,139 738,935 921,414
974,956 Long-term Debt 15,018 11,404 12,008
1,466,338 2,156,133 2,127,464 Other liabilities
7,637 19,797 57,244 0 0 0 Total Liabilities
115,696 168,643 249,391 2,205,273 3,077,547
3,102,420 Total Equity 854,129 1,013,760 1,429,138
266,278 (1,440,000) (967,251) Total Liabilities
& Equity 969,825 1,182,403 1,678,529 2,471,551
1,637,547 2,135,169 Analysis Ratios Current Ratio
5.00 4.91 4.91 1.37 1.31 1.40 Debt-to-Asset Ratio
0.12 0.14 0.15 0.89 1.88 1.45 Debt-to-Equity Ratio
0.14 0.17 0.17 8.28 (2.14) (3.21) Cash
Flow-to-Assets 0.23 0.17 0.31 0.05 0.33 0.39
Return on Equity 0.01 0.05 0.06 (2.70) 0.98 0.59
Gross Profit Margin 0.74 0.78 0.82 0.18 0.24 0.26
2. Is the corporation in a strong financial
position? After calculating and thoroughly
analyzing eBays financial data and comparing it to
Amazon ….

Research essay sample on A Corporate And Financial Analysis Of Ebayinc