Strategy Analysis

The benefit eBay provides to buyers and sellers is to eliminate price and information inefficiencies in global e-commerce. eBay has become a proprietary marketing, distribution, and payment system for sellers of rare vintage items.  For buyers bay has become a one stop shopping site.  The auction platform allows buyers to obtain critical information about the pricing and origin of various goods.

Operations at bay are highly profitable in that the company bears no expense related to marketing, storage, or shipment of products.  The basic business strategies and business model have not changed from those that the company was originally founded upon.

These strategies have been augmented with the addition of Skype to add access from a different and growing web platform.  eBay’s globalization strategy makes sense not only from a market penetration standpoint, but also based on it’s niche of rare and vintage goods.  These items are in the possession of whomever wherever and willingness to buy and sell these items is not limited by regional or national borders.  This presents the company with several challenges and opportunities.

Language and culture was a major challenge as eBay began it’s growth process.  As the company penetrates new markets with regional dialects and slang, translation

will become a more important part of the value chain and will depend on VoIP capabilities from Skype.  Government regulations are constantly changing and requiring adjustment in operations in certain markets.  eBay will have to adjust it’s platform to facilitate markets where certain items are contraband or illegal.

eBay has taken steps to close the digital divide by expanding alternative internet access through Skype.  Finally, globalization and it’s effects is an ongoing debate which eBay will find itself in the center of.  As a good corporate and global citizen the company will constantly have to answer to questions and criticisms about it’s impact on  economies and competition in the locations that bay reaches.

eBay and and it’s other flagship sites represent the largest global e-commerce business in the world.  eBay incorporates multi domestic, global, and transnational strategies into it’s core international business strategy.  The company’s core competencies can be summarized as a broad technical platform that combines elements of marketing, payment, and communication facilitating international auction based trade in vintage goods.

eBay has leveraged it’s operating units to function together and to provide alternate access opportunities in developing markets.  The challenges that the company faces have not changed over the years nor has it’s basic operating strategies.  Focusing on enhancements to a basic business model will allow eBay to maintain it’s market positioning far into the future.

References

Datamonitor. (November 12, 2008). bay Inc. Company Profile. Retrieved April 14, 2009, Business Source Premier database.

eBay 2008 Annual Report. Retrieved April 14, 2009, from http://files.shareholder.com/downloads /ebay/613006665x0x281367/1b773a7c-8c14- 45b8-915a-1716ca37dda0/eBay_2008AR.pdf