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Perform an industry analysis using Porter's Five Forces Model.
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Case 13: eBay.com
1. Perform an industry analysis using Porter's Five Forces Model.
Threat of Entrants
There are lots of online auction companies in this industry. However the industry is dominated by only three companies, which are eBay, Amazon and Yahoo. With the availability of online auction software and the auction hosting, and low start up costs to setup an online auction business, the potential for new entrants will be really easy. On the other hand it is really hard to become a potential threat in this industry because of several reasons. It is hard for small companies or newly opened companies to create a brand name; it is also hard for companies to gain customer loyalty. Without brand recognition and a reputation for quality it would be difficult to enter the market and be successful. Hence, in the world of the Internet what counts most is brand identity. EBay uses a network externalities involved with being a member of one auction site. Any new company entering in this industry will face challenges of attracting new customers. EBay Company is first in the market and it has the largest market share among the other
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