EBay In China Study Case

Topics: China, Joint venture, People's Republic of China Pages: 4 (992 words) Published: December 17, 2014


eBay Inc. in China
(Case study)

Strategic Management

Authors:
Antonin Levy
Diogo Reganha
Nuno Sobral
Visar Murati

Riga, 2014

Question 1
eBay first entered the Chinese market in 2002 by acquiring a 33% stake in its local counterpart, EachNet, followed by a full acquisition a year later in 2003. Critically assess eBay.s choice of market entry strategy for China (use Key Country Matrix), listing both the advantages and disadvantages of its acquisition strategy (use Drivers (YIP) -CAGE Matrix). 30%

Key Country Matrix
Looking at the structure of "key country matrix", we notice that this matrix has two axes (the x-axis that shows the "competitive strength" observed in the country that we are studying; the vertical axis represents the "country atractiveness"). For China, we can say that among many others, there is a top 6 of factors that drive investment there (China is an attractive investment country): 1. Capital Availability;

2. Competitiveness;
3. Regulatory Environment;
4. Stability;
5. Local Chinese Market and Business Climate;
6. Openness to Regional and International Trade.
Analyzing China's competitive strength, we conclude that this is a country still developing. China has shortages of infrastructures and services in several markets (China's competitive strength is not that high).

Drivers (YIP)
Location of activity is a crucial source of potential advantage and one of the distinguishing features of international strategy relative to other diversification strategies. Given internationalization’s complexity, international strategy should be underpinned by a careful diagnosis of the strengths and direction of trend in particular markets. George Yip’s drivers of globalization’ framework provides a basis for such diagnosis.

CAGE
1. Culture distance;
2. Administrative and political distance;
3. Geographical distance;
4. Economic distance.
The differences between the US and China are huge when...
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