Ebay Expands Around the Globe

Topics: PayPal, Strategic management, United States Pages: 3 (802 words) Published: March 28, 2011
1. Evaluate the pros and cons of eBay's playbook strategy.

Pros of eBay’s playbook strategy are:
Develops suggestions as to how to drive traffic to the local eBay site through ads at a country's most popular Web sites and search engines (as stated) •Dictates that products, info, and chat groups be created by buyers and sellers in that country (as stated) •eBay becomes part of the country's internet because of the playbook •avoids problems associated with a cookie-cutter approach (as stated) - (avoids cookie-cutter, look-alike sites) •playbook is understood throughout different countries to show them how to work the site, alleviating communication problems - (avoid cultural and language problem)

Cons of eBay’s playbook strategy are:
Tailoring sites to each region or country is time consuming and costly •Timing is critical in any Web-based business. The playbook slows down the entire process.

2. Comment on the choice of Germany as eBay's first international market.

Germany was chosen in part because of its vast internet users of around 40 million. Ebay's decision to enter into this foreign market was timed perfectly in June of 1999, allowing the company to successfully purchase a copycat site for $47 million. By purchasing a site already in existence it allowed for easier establishment of government contacts and an insight into the country's operations practice. By establishing this foreign market early, competing companies will have a harder time generating and developing a market of their own, essentially beating the competition to the punch. eBay's choice of Germany as their first foreign market was an accurate decision that has more than paid for its investment by continuing to grow and expand as the company’s largest international site.

3. Describe the pros and cons of eBay's entering an international market by purchasing a foreign firm rather than building an operation from scratch.

Pros of expanding through purchasing vs....
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