Ebay Strategic Analysis
Executive Summary
This report seeks to evaluate the major issue facing eBay with regards to its international strategy. This will be done through the analysis of eBay’s competitive environment using the Porter’s 5 forces and positioning in the industry using the BCG portfolio matrix. Following which, we will proceed to identify the sustainable competitive advantages of eBay using the resource-based view of the firm. The core competence of eBay will also be discussed. Through an overview of the above mentioned analyses, we will propose recommendations to address the problem faced by eBay.
Major Issue
From the case, our group has identified a major issue which is imperative to eBay’s future growth and sustainability.
EBay has been doing very well financially, as reflected by the growth in revenue of between 30 and 59% per quarter between 2004 and 2006. This growth however, is largely supplemented by eBay’s dominated markets such as in North America and Europe.
According to the world internet usage and population statistics in 2006, North America was shown to be about 70% penetrated in terms of internet usage, whereas the world’s biggest market, Asia, with more than half of the world’s population, was only 11% penetrated. In addition, Asia was witnessing a tremendous growth in internet usage due to rising affluence and globalization. Bolstered by these statistics, Asia is definitely an area of vast potential for eBay to exploit.
However, eBay has been struggling with its strategies in Asia as shown by its failure in Japan and its inability to effectively compete with Taobao in China and Gmarket in Korea. Hence, the main issue facing eBay is: how eBay can successfully break into the attractive Asian market, despite strong local competition and lack of market share.
Focus of the Case
The focus of the case is on the international strategies implemented by eBay with regards to its operations of its business units in Asia. EBay had pursued a global strategy where
This report seeks to evaluate the major issue facing eBay with regards to its international strategy. This will be done through the analysis of eBay’s competitive environment using the Porter’s 5 forces and positioning in the industry using the BCG portfolio matrix. Following which, we will proceed to identify the sustainable competitive advantages of eBay using the resource-based view of the firm. The core competence of eBay will also be discussed. Through an overview of the above mentioned analyses, we will propose recommendations to address the problem faced by eBay.
Major Issue
From the case, our group has identified a major issue which is imperative to eBay’s future growth and sustainability.
EBay has been doing very well financially, as reflected by the growth in revenue of between 30 and 59% per quarter between 2004 and 2006. This growth however, is largely supplemented by eBay’s dominated markets such as in North America and Europe.
According to the world internet usage and population statistics in 2006, North America was shown to be about 70% penetrated in terms of internet usage, whereas the world’s biggest market, Asia, with more than half of the world’s population, was only 11% penetrated. In addition, Asia was witnessing a tremendous growth in internet usage due to rising affluence and globalization. Bolstered by these statistics, Asia is definitely an area of vast potential for eBay to exploit.
However, eBay has been struggling with its strategies in Asia as shown by its failure in Japan and its inability to effectively compete with Taobao in China and Gmarket in Korea. Hence, the main issue facing eBay is: how eBay can successfully break into the attractive Asian market, despite strong local competition and lack of market share.
Focus of the Case
The focus of the case is on the international strategies implemented by eBay with regards to its operations of its business units in Asia. EBay had pursued a global strategy where