EBay Global Strategy Analysis Case Study

Running head: EBAY GLOBAL STRATEGY ANALYSIS CASE STUDY Page |1
EBay Global Strategy Analysis Case Study
Amgad Abdou
Columbia Southern University
MBA 6601-08E-1A10-S2, International Business
EBay which is an online trading platform was found over Labor Day weekend in 1995 by Pierre
Omidyar, who is a computer programmer. Today, eBay becomes one of the world’s largest online
marketplaces with its impaction around the world. EBay expands its international business in 39
markets.
Since the first date of publishing to public, although eBay has continued to innovate to meet
customers’ requirement, eBay’s value proposition has not changed. EBay’s core competency is providing
a useful online platform where links buyers and sellers. It allows peer-to-peer trading in an auction
format and the value of goods that are soled determined by the market. It helps to uphold the principles
of trust and safety. Customers can be guaranteed low fraud losses and high transaction protection. EBay
focuses on market efficiency by applying high technology in its e-commerce system. With aims to satisfy
customers, EBay attaches special importance to develop tools and technologies to assist customer in
online trade.
EBay has decided to configure and coordinate its value chain by developing all necessary tools and
technologies to assist buyers and sellers in transaction. By providing a platform for online trading, EBay
acts as a link between buyers and sellers. All commodities and goods listed in EBay webpage are set for
buyer auction. When biding completed, EBay will suggest payment methods and shipping terms and
cost. EBay manages its value chain to support customers by setting average auction prices together with
maximum prices in case buyers would like to buy goods immediately; providing many ways to make
payments; providing shipping methods and lowest shipping cost; and guaranteeing for goods quality
with 90 days. Beside that EBay has continued to innovate and connect people. The most important
points in their innovation are acquisitions of PayPal in 2002– an online financial service, and Skype in
2005 - an internet communication company. With these acquisitions, EBay provides customers with the
most convenience methods so that buyers can make low cost contact with sellers easier and make all
transaction done faster.
Although there are several disputes that EBay is doing a real value chain, its characterization proofs
that EBay performs a virtual value chain. It provides platform for trading on the internet in virtually
market where it operates and the value of goods sold in this site is determined by auctioning of buyers.
It performs as a self-regulating global economy.
From the first date of foundation, EBay continuously innovates to improve it services to satisfy
customers. EBay extends it impact to provide many other kinds of online services such as MicroPlace,
where connects people with the world’s working poor to alleviate poverty limited to U.S. residents;
WorldofGood.com – where connects people with producers of socially responsible goods; eBay Giving
Works and eBay for Charity – where sellers can make donation to charity. EBay expands its business
globally through its global strategy called AAA – Acquisition, Activation and Activity. However its
strategies do not go as far as its inception. By developing and improving its tools and technologies, the
easier customers can access and buy products the more benefits eBay will gain.
Nowadays, together with development of technologies, people are familiar with shopping online.
Someone even treats online shopping as their practical needs. With a strategy to develop international
expansion, eBay will soon acquire success. However, it will face some challenges.
Firstly, more and more company will enter this field of business. At the moment, Amazon.com is one of
the biggest competitors of eBay. When establishing it offices and business in oversea countries, eBay will
face with host competitors doing in the same field.
Secondly, eBay encounters with developing translation software in order to translate auction description
in languages of the host countries to another language of buyer or seller. The more expands, the more
eBay has to develop this software.
Thirdly, when entering any country, eBay has challenges with its local law and regulations in imports and
exports and in selling.
Finally, that is cultural attitudes about e-commerce. People in some countries do not want to do
shopping online. They need to come to a real market where they can have a look and touch to products
that they want to buy. Beside that some people prefer to do online shopping on producers’ own web
pages, where they believe about product quality better than what sold on eBay.
With above challenges, it is recommended that when entering these countries, eBay must do
marketing reach carefully and it should have specific advertising strategies for each market. It should
continuously innovate and improve to meet customers in each country and strengthen it impacts to
customers. I believe that eBay will make its business variable and develop stably.
Reference:
- John D.Daniels, Lee H.Radebaugh and Daniel P.Sullivan (2008), INTERNATIONAL BUSINESS
Environments and Operations (12th ed.,) Upper Saddle River, New Jersey: Pearson Prentice Hall, pages
481, 482, 458, 459
- The eBay website: www.ebay.com
- Van Cam (2008, Nov.), Competition between eBay and Amazon, from
http://www.vneconomy.vn/20081118093135718P0C16/cuoc-chien-ebay-va-amazon.htm
- Ly Lam (2007, July), eBay enters Vietnam – Opportunities for exports, Saigon Business No. 205, page 24
- EBay’s successful key (n.d.), Retrieved September 28th, 2006, from

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Running head: EBAY GLOBAL STRATEGY ANALYSIS CASE STUDY Page |1

EBay Global Strategy Analysis Case Study

Columbia Southern University

MBA 6601-08E-1A10-S2, International Business

- The eBay website: www.ebay.com

- EBay’s successful key (n.d.), Retrieved September 28th, 2006, from

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