Porter and Strategic Analysis of Ebay

2117 words 9 pages
Carry out Porter's Five forces framework study for eBay.

The Porter's Five forces framework analyze the environment of a company in order to have a global image of the threats which faces the company or its attractiveness. In other word, this analysis focus on three horizontal competencies: • Competitive rivalry in the same industry • Threat of substitute products • Threat of new entrants and two vertical competencies: • Bargaining power of customers • Bargaining power of suppliers The aim is to determine the threat and the opportunities for the company in each competency.

 Industry Competition: this analysis will permit to determinate the competitiveness of eBay, how does it react to competition? Threats: • There is a low entry
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Conclusion: In terms of substitutes, eBay got numerous substitutes but there are indirect substitutes. In one hand, the e-commerce is very expanded and nowadays people buy online all time with auctions or not. In the other hand, there is a lot alternative for eBay for people who just want to make good deals. Indeed, there are a lot of private sells or “want ad” websites or auctions website specialized. Moreover, the fact that there is no switching cost and people are not locked in eBay, put the company in danger and very dependent of its image and its marketing campaign. The only think we can be sure about it is that is someone think about an auction website, he will think about eBay in the first place. Thanks to its brand image, eBay stays the first one on the market. Although, eBay may diversify its activity and progress with the needs of its users with private sells or “want ad” campaign.

 Bargaining power of buyers: this analysis will permit to know if buyers are able to put eBay under pressure or not. Threats: • • • • eBay is not selling anything, it's just a platform which makes easier the P2P business. So it doesn't control everything. eBay is responsible for all the transaction so if one goes wrong, it's eBay's fault. On eBay, there are high-end items such as real estate, boat, cars and those kind of transaction are more risky for eBay. People who are able


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