1. create, a Porter’s Five Forces Model of eBay in either Visio, Excel, of Power
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Question
1. create, a Porter’s Five Forces Model of eBay in either Visio, Excel, of PowerPoint format. Use external sources to assist in populating your model.
Next, report and analyze your findings, touching on the following questions;
1. What does your five forces analysis reveal about the nature and strength of the various competitive pressures eBay faces? Are the competitive pressures facing eBay and other online auction company’s conducive to earning good profits? Why or why not?
2. Based on your analysis of the industry and eBay’s situation, what problems and issues does eBay’s top management need to address? Which ones are top priorities?
3. What do you see as the key success factors for firms in the online auction industry?
Explanation / Answer
Porter's five forces analysis for eBay.
1. Competitor analysis: High
The new market leader is Amazon and they have the highest market share in the e-commerce business in the world. They did that using the perfect combination of business strategy and technology. They made data-driven business decisions and a lot of importance was given to innovation at all levels of the company. They streamlined the supply chain management and gave the customers excellent service.
2. The threat of new entrant: High
Every day a new e-commerce company is entering the market so the threat is always high. Whoever comes up with a better idea and combines it with business and technology can excel in the e-commerce business. The existing other competitors are also trying new things and constantly innovating to stay in the market.
3. Buyer Power: High
The buyers have become very wise and choosy when it comes to buying online. They have hundreds of options and they go with the ones giving them the best value for money. They evaluate a lot of things before making a purchase online like customer support. post-sales support, and pricing.
4. Supplier Power: High
The suppliers are also similar to the buyers and they have become very choosy when it comes to the customers. They prefer supplying to the vendor giving them the highest benefits. The suppliers also go with the companies supporting them with their supply chain technology.
Threat of Substitution: High
The eBay has already been substituted by Amazon in the market so we can easily say that the threat is very high. This will also continue to happen with the advent of new technologies and business strategies to attract the customers in the market.
1. These factors are very important for any e-commerce company because the market is very dynamic and there is a new player every single day trying to make big. They are trying different engagement models to keep the customers happy and convert them into loyal customers. So the company that succeeds in keeping the customers happy will win the race. This directly affects the revenue generation of any company.
2. The company should concentrate on innovating and streamlining the entire process. They need to start with revamping the website and providing the customers with a better user experience. The company also needs to employ a better strategy for the marketing to attract new customers and retain the existing customers.
3. Good user experience, data-driven decision making, good marketing strategy, pricing, customer support, market segmentation and targeting.
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