Example research essay topic: A Corporate And Financial Analysis Of Ebay.inc – 1,602 words

… .com, one of its major competitors, and with
industry standards, it is evident that they are in
a strong financial position. This fact is proven
through analyzing its financial statements and
ratios. The financial statements show that eBay
has continued to grow in net income as well as
total assets, demonstrating its overall success
and growth of as a company. The growing increase
in liabilities is mainly in part of investments to
continuing growth and advancing technology. By
looking at eBays financial statements, and
comparing them to its competitors, it can be
concluded that eBay has been continuing to grow in
all aspects of its company, advancing its
competitive advantage, and increasing its overall
profits.

After calculating and analyzing the
ratios it is possible to make many more
conclusions about eBays financial situation. eBay
has a very high current ratio, demonstrating that
it has more than enough short-term assets to cover
its immediate liabilities, but it also shows that
eBay might not be investing enough of its excess
assets. The debt-to-asset ratio for eBay is very
low which means that its assets are financed more
through equity than debt, and not a very debt
leveraged firm. The debt-to-equity ratio is very
low for eBay showing that equity provides a
majority of the financing, but it is also exposing
itself to a large amount of equity. The cash
flow-to-assets ratio over the past three years
portrays that eBay is growing in cash flows and is
less likely to run into problems generating cash
in the future. The increasing ROE is another
example of how eBay is continuing to grow, because
a higher ROE is expected in high growth companies.
And finally the gross profit margin proves that
eBay is generating a very large percent of net
income from each dollar of sales.

This ability to
earn a high profit per dollar of sales is because
of its very low cost to generate income, and this
contributes greatly to the growing of eBays
overall financial strength. Section 2 – Business
Level Part 1 – Business Level Analysis 1. Apply
the five forces model to the industry in which the
business is based. What does this analysis tell
you about the nature of competition in the
industry? The risk of entry by potential
competitors is relatively high due to low barriers
to entry. New competitors can launch new sites at
a nominal cost using commercially available
software. This low barrier to entry will cause
competition to intensify in the future.

Also due
to the broad range of products sold at eBay there
is many more opportunities for new competitors to
enter in more specific market segments. The degree
of rivalry among established companies within
eBays industry is very high. This high degree of
rivalry is very common in discount retail industry
due to the high concentration on being the price
leader. EBays competition is very broad and varies
with each of its different products. eBay competes
closely with many well know broad-based companies
such as traditional department and general
merchandise stores, as well as a large variety of
online retailers. Due to this complex competitive
industry, eBay must concentrate on many
competitive factors such as: ability to attract
buyers, volume of transactions and selection of
goods, customer service, system reliability, brand
recognition, and many others to keep their edge.
The bargaining power of buyers is low because the
seller sets the prices of the products and because
a majority of the sales are in an auction
platform.

This gives eBay and the buyer less
control of the products prices, but in most cases
the large amount of sellers per product keeps the
prices low and competitive. The buyers benefit
from the competition of the sellers, convenience
of a trade environment, and not on the power of
price bargaining. The bargaining power of
suppliers is relatively high because eBay must
keep its fees and commissions low in order to
attract and keep loyal sellers. Sellers are the
suppliers of the products and are able to pick
from different auction companies and select one
offering the lowest fees and commissions. The
ability for the suppliers to select the company
offering lower selling costs and higher profits
per sale, forces eBay to remain competitive in
selling costs. With the power more in the
suppliers hands eBay is required to satisfy their
needs with higher customer service, more
convenient selling platform, and lower selling
costs in order to keep a large supplier base and
attract new sellers.

The threat of substitution is
high due to the growing number of online auction
and shopping sites. Online retail is a highly
volatile and rapidly growing industry where
substitutes and rivaling competitors can emerge
with relatively minimal costs and in a short
amount of time. This high degree of threat forces
eBay to continuously use its strong finances to
maximize user satisfaction and to acquire high
quality auction properties in order to remain
dominant in its industry. After analyzing the
forces of this industry I believe that the
competition is very intense. In order to succeed
in this industry a company must continuously
improve all of its aspects of business. If the
company becomes content or satisfied with its
success it will be quickly surpassed or replaced
by another competitor.

This industry is extremely
volatile and it is imperative to invest in
improving your company in order to remain
competitive. 2. In what stage of its life cycle is
the industry in which the business is based? eBay
is obviously in an industry in the growth stage of
the life cycle. The online retail industry is
exploding right now due the low prices and
convenience of an at home search and buy
environment. The high degree of demand in this
growing industry has attracted many new online
retail companies and caused many offline retailers
to develop online sites as well. The industry is
relatively new and expected to continue to grow
not entering the shakeout stage any time soon.

3.
What are the implications for the business of
being in this stage of the life cycle in terms of
the intensity of competition both now and in the
future? eBay clearly recognizes its industry as
rapidly growing, and has made numerous plans to
keep up with the demand and continue its
dominance. It realizes its presence highly
competitive market and concentrates heavily on
leading the competition. eBay believes that if it
continues to focus on attracting a larger user
base, increasing customer service, developing
strong brand recognition, improving its technology
and system reliability, and preserving quality of
its products and services, it will continue to
lead the growing competition in the future. I
believe that eBay is well aware of its environment
and has been successful in keeping up its
competitive intensity and has made substantial
plans to continue its success. 4. What are the
core competencies of the business? eBays core
competencies include many of its principal
competitive factors.

These factors include: brand
recognition; ability to attract buyers; volume
of transactions and selection of goods; customer
service; community cohesion and interaction; system reliability (technology); reliability of
delivery and payment; website convenience and
accessibility; level of service fees; and quality of search tools. 5. What is the generic
competitive strategy pursued by the business?
eBays objective is to build upon its position as
the worlds leading community-commerce model and
the most compelling commerce platform on the
Internet. Its vision is to help practically anyone
buy or sell practically anything in the world.
Some of eBays key strategic elements include: broaden the eBay trading platform; foster eBay
community affinity; enhance features and
functionality; expand value added services; and continue to develop US and international markets.
6. Does the business possess the appropriate set
of competencies to pursue the generic competitive
strategy identified above? I believe that eBay has
the resources and competencies to strive for its
overall generic strategy. If eBay continues to
utilize its resources and capitalize on its
competitive advantage then it should continue to
achieve success in the future.

eBays generic
strategy is very broad which I think is important
because they compete in many different markets.
Constantly striving for their overall strategy, as
well as, improving and expanding their core
competencies will help eBay to remain ahead of its
competition. 7. Does the business have a
sustainable competitive advantage? eBay is
involved in many different markets such as
business-to-business, specific categories of
goods, broad-based goods, and other online auction
sites. This wide variety of markets makes it
difficult to dominate each one, but eBay is the
leading online auction site. eBay is also near the
top in competition in all of its other markets. As
eBay continues to expand its user base and product
selection, it will continue to strengthen its
competitive advantage.

eBay is involved in many
volatile markets prominently based on price
leading and product selection, and it must strive
to constantly improve all of its aspects of
business in order to remain competitive. Part 2 –
SWOT Analysis 1. Identify the businesss key
strengths. Why are these strengths? Marketing
Brand recognition Ability to attract users Dynamic
Pricing Format 2. Identify the businesss key
weaknesses. Why are these weaknesses? Low control
over product quality Ability to accommodate for
growth 3.

Identify the businesss key
opportunities. Why are these opportunities?
International market Half.com (fixed price) 4.
Identify the businesss key threats. Why are these
threats? Hackers Rapid user growth Competitors
Legal cases, regulations Consumer
acceptance/confidence in the Internet 5. Is the
business as a whole dealing effectively with
environmental threats? 6. Is the business as a
whole effectively exploiting environmental
opportunities? 7. Is the business as a whole in an
overall competitive position?.

Research essay sample on A Corporate And Financial Analysis Of Ebayinc