Echo Bay Technologies – eBay
June 2nd 2010
Echo Bay Technologies Market Entry Strategies
Columns for 2007 and 2010: Internet Penetration in Latin America IV.
Market features/characteristics of Latin America that must be understood by eBay V.
A characteristic of eBay’s ideal or perfect strategic position after 2005 VI.
Ebay’s Marketing Strategy for Latin America for 2001 to 2005 VII.
Conclusion and Recommendation
Echo Bay Technologies
Echo Bay Technologies (Ebay) is currently one of the leading trading companies in the world. It has international presence in most parts of the world including the United States, the United Kingdom, Japan, Korea, Canada and Latin America’s Brazil. It was established in 1996 to facilitate the open market place ideologies, i.e. providing a level ground for its members to compare, discuss and trade information technology items and other commodities. Just like any other organization, the firm intends to continually grow on a global basis. In order to achieve this, the firm has embarked on an intensive global acquisition program. Presently, eBay’s corporate image and the 90 percent market share is attributed to several factors such as adoption Ibazar, a form of online trade and other types of E-businesses like internet based auctions and trade fairs. In order to maintain its reputation and ensure customer satisfaction, Echo Bay Technologies (EBay) has put in place adequate measures to guarantee the safety of the trading process through its fraud protection program. Confidential client information, is concealed especially when dealing with expensive transactions and every EBay member can easily access company profiles of all member firms registered with Echo Bay Technologies as traders.
1- Compare eBay’s three market entry strategies-joint venture, acquisition, and direct entry. eBay has adopted joint ventures as a market entry strategy, applied in countries such as Australia, Japan, and New Zealand. In Australia, the acquisition was attributed to the fact that eBay had a poor knowledge of the Australian online market. The launching of a joint venture with PBL was therefore aimed at introducing eBay into the Australian trading community, before making further steps such as acquisitions. Through the acquisition market entry mode, eBay successfully acquired alando.de, Germany’s leading online trading company in mid 1999. This was beneficial to the firm due to the fact that alando.de controlled a fairly huge portion of large number of internet users in Germany (approximately 10 million) as per 1999. This acquisition was in line with eBay’s desire of penetrating the global market share due to increased local know-how (German translations) and channeling relevant traffic to its website. In some cases, eBay acquired iBazar in France, the Netherlands, Belgium, Spain and Italy so as to boost its performance and improve its profitability and competitiveness in online trading. The direct entry strategy was used in Ireland and the United Kingdom later in 1999. This approach was aimed at making eBay control the UK’s market share despite the competition posed by QXL, an established monopoly in online trading. Other countries where the direct entry strategy has been applied in the periods ranging from 2000 to 2001 include Canada, France, Italy, Austria and Switzerland. In Korea, the Echo Bay Technologies firm controls a major stake in the internet auction business. Comparing the three market entry strategies, it can be established that the direct entry mode has been widely used in most countries. Despite the huge expenses incurred at the preliminary stages in marketing its product, this approach is quite effective since all the returns and profits are enjoyed by the company. The acquisition approach has also been applied in some cases, making the firm control a huge market share. Joint Ventures are the least profitable...
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