Running head: EBAY GLOBAL STRATEGY ANALYSIS CASE STUDY

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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 worlds 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, eBays value proposition has not changed. EBays 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

Running head: EBAY GLOBAL STRATEGY ANALYSIS CASE STUDY

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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 worlds 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.

Running head: EBAY GLOBAL STRATEGY ANALYSIS CASE STUDY

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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 - EBays successful key (n.d.), Retrieved September 28th, 2006, from http://www.lantabrand.com/cat1news3073.html