• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Perform an industry analysis using Porter's Five Forces Model.

Extracts from this document...

Introduction

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 companies. It is a difficult task for new entrants to make their name in the Internet auction marketplace. ...read more.

Middle

Is eBay successful? If so, why and if not why? The online auction industry is profitable and growing very fast. Industry leaders situated themselves and may not move when it comes to taking their sales. Removing them from their thrones is not impossible, but requires either a new market for sales or takes some of the current market. Some shifts are occurring with the recent development of the newer auction companies but to have a stabile market share companies must have a brand name in the auction industry, which leaders such as eBay, Amazon and Yahoo have already done. According to the text book eBay has a market share of %80. Their market share and financial results shows that eBay is very successful. EBay established a system where everyone had accessed to the same information and could compete on the same terms as everyone else. People from all over the world started to buy and sell things to each other with a reasonable price. Their revenues increased from month to month and they have a low debt. This enabled the company to create partnerships with other companies all around the world and compete in new markets. Giving customers more than they want and providing them a unique service with advanced features gained the company to be the market leader. ...read more.

Conclusion

About Me allowed people to create their own home page free of charge and customize their eBay services. Finally the last one is to develop international markets by creating partnerships or acquiring companies that have strong powers on their local markets. EBay Company has built strategic partnerships in all stages of its value chain; they tried to seek customer feedback and made improvements based on the feedback information. They also actively monitored the external environment for developing opportunities. EBay trusted the users for suggestions to improve the site and by giving the customers what they wanted; they were improving both customer retention and loyalty. EBay paid attention to their customers' expectations and followed their values. As it is clear that, eBay's growth strategy is focused on the goal to be the world's largest P2P online auction company. To do this they must have access to the other markets of the world. After completing the steps that are mentioned above eBay moved to dominate the world markets. They built new user community along with acquiring companies that were in the market local companies and partnering with strong local companies. They entered Europe, Australia, and Japan and gained a significant market share. Their growth strategy of acquiring and partnering gave them the brand name in all over the world as they strongly increase their market share. Mehmet ICAGASIOGLU 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Marketing section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Marketing essays

  1. PEST and 5 Forces Analysis of the Pharmaceutical Industry.

    Strategically, this offers the pharmaceuticals the opportunity to build DTC (direct to consumer) advertising and thus awareness of the products available; 75% of US users who search for health issues are likely to discuss their findings with the healthcare providers, possibly asking for products by name.

  2. Walt Disney: SWOT, PESTEL and Porter analysis

    Adopted from Porter (1990) New entrants The deregulated state of the market provides certain opportunities for new entrants to start the business. The company operates in a mature market, divided between existing large companies. The continuous change of life style preferences create various opportunities for the media content.

  1. KFC andthe Global Fast Food Industry (703).

    South America Ø Less political and financial risks in other foreign market Ø Maintain a minimal presence in Mexico for future growth when the stability is greater Disadvantages Ø Forgoing a potential growth in a profitable market Ø Servicing of Mexico units without the increase of the of the economy

  2. Michael Porter's Five Forces Model Analysis

    The electronic Vessel Clearance System (VCS), developed in-house is the first of its kind in the nation. The electronic VCS facilitates one data submission from shipping agencies where the data is then automatically transmitted to the respective government agencies. Usage of the system has saved significant time for shipping agents enabling them to provide government agencies with information in advance.

  1. Report using the five forces model of Ceasars Entertainment.

    The similarity of casino floors has caused casinos to try to differentiate themselves by offering "themes" and new machines. Along with comps, casinos try to add switching costs to the slot playing gambler by offering cards that give perks to players based on accumulated slot plays.

  2. Market Opportunity eBay.com

    eBay used a combination of these to effectively build their brand in an e-commerce environment 2.3.1 Personal Communications eBay used personal communications including word-of-mouth and customer service to help build their brand. By 1997 the number of auctions being held on eBay had risen to 150,000 a day and eBay were finding difficult to provide adequate customer service.

  1. Tea industry of pakistan wrt potter model

    Bargaining power of buyers The bargaining power of buyers in the industry is very low. This is because of the enormous number of small buyers in the industry. We all know that tea is a commodity bought by almost every household in the country.

  2. Five forces analysis applied to the online auction industry.

    Certainly, the huge amount of users frequenting eBay's site makes it easier to draw conclusions on the services wanted. - Community: An online-auction needs a critical mass of buyers and sellers to be attractive. The membership-loop is an example of network externalities, the bigger the community, the more advantage customers

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work