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eBay Globalization Strategy

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Introduction

EBay's Globalization Strategy Introduction to eBay Company eBay was founded by Pierre Omidyar and Jeff Skoll in May 1996. Their headquarters were in San Jose, California in the midst of the dot-com era. The company idea initially began as "Auction Web, which Omidyar launched in September 1995. The idea was to develop an open market place that was available for all members of the community to discuss, compare, and trade computer items as well as collectibles. The idea took off, reaching thousands of registered users in just a few years. By January 1997, AuctionWeb could not handle the large load of page views - bandwidth. Omidyar solved this problem by writing the code for a new system: ebay (Echo Bay Technologies). In September 1997, AuctionWeb was shut down and the eBay platform was opened. The ebay company vision: "To create the world's largest global trading community and to help people trade practically anything on earth." eBay had 2.4 M visitors in 8/98, quadrupling in size to 8.4 M visitors in 4/01. Listings on their site began at 500 in 1998 and grew to just under 5 M in 2001. What started out as an auction site for computer and collectible items matured to include toys, pottery, automobiles, furniture, to movies, etc. ...read more.

Middle

Below is a list of possible scenarios: "Options for Latin America"3 (ALTERNATIVES) 1. Organic growth of iBazar Brazilian operation into Latin America 2. Growth through Acquisition of a competitor 3. Get rid of the iBazar Brazilian operation completely (increase cash flow) 4. Sell it for equity in a competitor for future acquisition 5. Shut it down!!! As you can see there are five possible ways eBay can address the problem of whether the timing is right to pursue growth in the Latin America market at this time and how to go about it. The first assumes that eBay will retain iBazar's Brazilian operation and organically growing the business using the "Greenfield"4 entry mode. Since iBazar is not a dominant player in the Latin America market eBay would be hard pressed to use this growth strategy and face the following challenges: such as developing new content in a new language, technical support, management and bandwidth, meeting the needs of the Latin America consumers, and legislative and regulatory restrictions. Another thing that eBay will have to consider is whether pursuing this strategy will generate revenue sufficient to sustain operations and justify presence. Furthermore, Latin America was likely not a region that would show sizable profitability any time soon. ...read more.

Conclusion

* User Friendly * Strong Customer Service INTERNAL WEAKNESS * Balance between individuals and companies selling * Quick growth has caused some internal struggles * Stock Price * Sustainable Growth * Ability to compete with Niche Competitors * Immature Global Expansion Opportunities * Global; Asia, Latin America, & E. Europe * Trade via wireless devices * Estimated Grow in global eCommerce * eBay API; to embed eBay into other sites * Entry into Niche Markets THREATS * Creating new content in a new language * International Tech Support * Bandwidth Management * Legislative & Regulatory Restrictions * Strong Customer Service Appendix A - Estimated Market Usage Potential 56 Current population statistics support the above table, however, the 2004 estimates are more closely aligned with 2003 Actuals. This suggests that population growth was not as high as expected. Therefore, our projections took that into consideration and usage expectations were decreased. 7 1 Strategic Management Concepts and Cases, Thompson and Strickland, 12th Edition, P. C-263 2 Strategic Marketing Problems, Kerin and Peterson, 10th Edition, P. 97 3 Strategic Marketing Problems, Kerin and Peterson, 10th Edition, P. 89 4 Strategic Marketing Problems, Kerin and Peterson, 10th Edition, P. 96 5 Strategic Marketing Problems, Kerin and Peterson, 10th Edition, P. 103 6 Strategic Marketing Problems, Kerin and Peterson, 10th Edition, P. 101 7 Population Reference Bureau, http://www.prb.org/ 1 2 ...read more.

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