Robert M. Brown Jr.
Module 1 Case Assignment, Why does E-Bay have problems in its Asian Markets? Course Number: International Business 401
Dr. Fadia Alkhalil
February 15, 2011
This paper will identify some of the reasons why E-Bay has problems in the Asian Markets as an internet auction provider. After examining articles from Philip Kotler and David Gertner as well as Moon Ihlwan among others, this paper will provide my answers about why did EBay want to expand globally as well as why any of these Asian nations wanted their business? It will explain some research explored about what types of Entry decisions the company used in the Asian Markets. Utilizing the knowledge gained about the history of global business. Answering the question about the problems that EBay has in the Asian market will allow me to discuss and apply concepts of the global market learned in module one in support of my answers. Lastly this correspondence will assess how EBay’s Marketing Mix assessment of the Four P’s assisted them in the global marketing strategy the company adopted for the Asian Markets?
Why did EBay want to expand globally and why did nations wanted their business? The reasons EBay decided to expand globally were various and resulted in an overall loss for the San Diego, CA based company headed by the former CEO at the time and California Gubernatorial candidate, Meg Whitman. Some of the decisions made and acted upon by the company’s leadership were akin to the way Meg Whitman ran her political campaign. Instead of researching the culture and traditions of the places they chose to do business and working on an image of being local or at least embracing local cultures and traditions; they chose to feed issues with money. In Whitman’s case borrow millions of dollars from herself to try to resolve the issue of losing as a candidate. Getting back on subject, the countries that eBay chose to expand globally in, were like all nations; ones that needed jobs. EBay sought the cheaper labor wages as a win-win situation for themselves or some instances the prediction of a high level of success due to their business reputation. Getting into the market was not difficult as the new market fell in line with what these countries wanted in ordered to develop their economies; while in turn enhancing domestic quality of life for their citizens. EBay felt compelled to expand globally to remain competitive as the US domestic market share was becoming mature resulting in stagnant profits and overall growth. As all companies looking to globally expand eBay was investing in Asia to increase profits by gaining a positive entry into this new market share however there was no need to create a new market. The majority of the countries they chose had local internet auction industry established already. EBay’s ultimate goals were to introduce their open auction business model at an international scale starting in places like Japan, China and South Korea to take advantage of these nation’s emerging economies in order to increase wealth. Entry Decisions
Through the struggles in gaining entry into these emerging market areas, EBay learned that they must adapt as well as embrace some of the new technologies and products offered by their competitors in the Asian domestic markets in order to be successful or at least competitive in the market. The beating they took in Asia was not just from Chinese and South Korean competition, but from two US based competitors in Yahoo and Google. A current domestic alliance with Yahoo against the giant Google has not resulted in any increase in positive business in the global market share as Yahoo is continuing to gain more shares of the market through its ventures with local competitors. EBay market entry decisions were integral to their failure in Asia. As ascertained from a case study published May 2008 about EBay’s Strategy in Japan 1,...