The concept of envelopment is critical to this case

Note: the concept of envelopment is critical to this case. Platform providers that serve different markets frequently have similar components and overlapping user bases. By leveraging these common components and shared user relationships one platform provider can enter another’s market, offering a bundle that includes both platforms’ functions. The targeted platform provider is vulnerable to a share loss because it cannot match the attacker’s offer.
eBay vs. Amazon Prep Questions:
1) What are eBay’s market segments? What are the key drivers of profitability in eBay’s business model? Where does their profit come from? Analyze the financials in Exhibit 3 (p. 9, A case) and Exhibit 5 to support your answer.
2) What are Amazon’s market segments? What are the key drivers of profitability in Amazon’s business model? Analyze the financials in Exhibit 2 (p. 8, A case) and also review pp.4-5, A case.

3) How does Amazon’s retail business model interact with eBay’s? What is each company’s approach to merchandise, inventory, fraud, technology? Whose approach is more successful? Why?

4) What were the barriers to entry for the third-party seller market? Do a five forces analysis for the third-party seller market to support your position.
5) As Amazon shifted to an online retail business model, how successful was Amazon in overcoming those barriers to entry? What business choices did Amazon make that were critical in changing the competitive dynamic? What role did envelopment play?

6) What would you recommend for eBay going forward?
7) Where is each company’s current stock price? How would you evaluate their prospects?