Internal And External Environment Analysis Essay

1260 Words6 Pages
When developing effective business strategies, organizations must thoroughly analyze both the internal and external environments in which they operate (Hill, Jones, & Schilling, 2014, p. 11). This analysis will enable them to pinpoint those elements that threaten their current and future profitability as well as those elements that offer the potential to increase current and future profitability (Hill, et al., 2014, pp. 44-45). The external environment analysis specifically looks at the industry within which a business functions as well as the competitive forces that affect and influence the nature of that industry. One way in which to examine these forces is by utilizing Michael E. Porter’s Five Forces model, which looks at the affect of competitors (both emerging and current), the bargaining power of suppliers and buyers, in addition to the threat of substitutes (Hill, et al., 2014, p. 48) on a specific business. This paper sets out to investigate the external environment of eBay, using Porter’s model, to determine how these competitive pressures could potentially affect the online auction site/retailer’s future success. What does your five forces analysis reveal about the nature and strength of the various competitive pressures eBay faces? Are the competitive pressures facing eBay and other online auction company’s conducive to earning good profits? Why or why not? Based on the analysis of the five competitive forces affecting eBay, it appears that the online auction
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