PEST Analysis on eBay The purpose of this section of the marketing plan is to de
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Question
PEST Analysis on eBay
The purpose of this section of the marketing plan is to describe how changes in the business environment will affect the eBay. This will be achieved by the use of the PEST Analysis, which attempts to review how changes in the political/legal environment will affect your company, how changes in the economic environment will affect the company, how changes in the socio-cultural environment will affect your company, and finally, how changes (advancements) in technology will affect your company.
Explanation / Answer
PESTEL Analysis on eBay
Political / Legal Forces
The most important political and legal factors for eBay are the increasing risks of data security, the increasing danger of fraud as well as the increasing trade with illegal products on the Internet. Another issue for eBay is that many users apply the trading platform professionally and do not pay tax to the government. Government agencies increasingly concerned about tax evasion enhancing their investigations. Especially in Europe people can buy and sell products and services in traditional shops only during regulated shop hours, which currently means an advantage for eBay where users can do their trading for 24 hours, yet. Governments are going to liberalise the shop hours more and more within the next years.
Economical Forces
The economical forces are the worldwide economic downturn and the decline in net pay in countries such as Germany, for instance. Especially in Europe, people has felt an increase ofprice level since the introduction of the Euro currency with the result that people are more price oriented by their buying decisions. eBay is one of the companies which benefit from the weak economic situation. Independently of the general economic cycle, we can also see a general shift of revenue from traditional retail trade to trading activities on the Internet. Another economical force is the still increasing importance of international trade.
Social Forces
The Internet continues to spread worldwide with high growth numbers and will reach a penetration rate such as the telephone and the television nowadays. Market research institutes expect an increase of the worldwide Internet penetration from 9.8 percent in 2002 up to 15.8 percent in 2006. Men are still using the Internet more than women, but the proportion of women using the Internetwill be higher in the future than nowadays.
Technological Forces
Technological factors are the increasing product and price transparency, which enables buyer to find sources of products easier and they will be better informed about product prices. Especially new technologies such as Wireless LAN, DSL, UMTS and the convergence and complicity of technologies will increase the Internet penetration and substantially affect the intensity and the way we are using the Internet. Another problem could occur by an increase in patent protected technical knowledge and features. eBay could be affected by patent disputes, could be prohibition to use specific techniques or could have to pay royalties for specific techniques.
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