Business Case Study: Ebay Inc.

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eBay Inc. is world’s largest and most popular marketplace on the Internet. Founded in 1995 by Pierre Omidyar, eBay created a powerful platform for the sale of goods and services to its members. There are millions of items across thousands of categories for sale on eBay, which its site dedicated to fixed price trading. eBay allows trade across the US and international basis with customized sites in markets around the world. Unlike the traditional online retailer, eBay has adopted a unique business model. It has created a better form of commerce by connecting millions of buyers and sellers around the world, empowering people and creating economic opportunity for all. The company makes money by matching buyers with sellers. Sellers ship…show more content…
eBay have to compete against major e-commerce such as Amazon, Etsy, and Walmart (Walmart Marketplace), as well as many smaller firms that have online retail/auction operations; leads to tough competition in the e-commerce market. Low switching costs is another external factor that contributes to the strong intensity of competitive rivalry in the industry. Switching cost are low, which mean customers can switch to another service provider, which cause the intensity of rivalry among industry firms to increase. Another external factor that cause the strong intensity of rivalry among competitors is the low differentiation in quality. eBay quality of products and services seem to be similar to its competitors’. In this case, eBay makes it easy for customers to switch from eBay to other firms, and heighten the force of competitive rivalry. (Mitchell,…show more content…
Its broad differentiation appeal to a wide range of customers through the Internet. eBay know how to market each of the categories made for its customers, e.g. professional buyers and bargain hunters. Its auction site offers low prices and exciting way for buyers to get great values and deals. Based on the current economic environment, only large profitable companies have the resources to challenge with eBay. Many small firms are also likely lack of expertise HRD professionals. For that reason, eBay has the competitive advantage over these firms, and remain one of the dominant players in the global e-commerce

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