Ebay: Facing The Global Challenge Essay

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Executive Summary:
The e-commerce industry has become a major player in the global retail environment. E-Bay's large operating history has allowed the company to build a social capital of internet buyers and sellers that has now become its competitive advantage. However, intense competition in e-commerce has lead major players to lead expansion efforts in foreign markets where growing economies exist and the number of internet users is abundant. As a facilitator of online buyer-seller transactions, the only obstacle the company needs to overcome is quickly introducing its presence in new foreign markets where growth opportunities have been identified.
Industry Analysis:
The online auction industry is currently in the growth stage of
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However, their large population levels relative to the number of internet users show low internet penetration levels (See Exhibit B). Such countries are considered potential for future growth in e-commerce as their infrastructure develops with technological innovation.
Competitor Analysis:
Many of eBay's current and potential competitors will not be able to attract the number of registered users' equivalent to or beyond eBay (See Exhibit D) because they do not have longer operating histories and greater brand recognition that has been attained by eBay's network economies from its first-to-market advantage.
On the other hand, the strategic partnerships formed by eBay's competitors in foreign markets pose a serious threat in its future ability to expand in new countries and increase share in growing markets such as China. Yahoo's strategic alliance with Alibaba's TaoBao has captured 58% of the Chinese online auction market. EBay's EachNet has attained roughly 35% of that market. Amazon strategic alliances with other brick-and-click retailers will allow it to continue bringing more value to the customer in terms of convenience, selection, and availability, which in turn will continue its competitive pressure on eBay.
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