2. eBay: King of the Online Auction Industry Louis Marino Patrick Kreiser
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3. eBay What is competition like in the online auction industry?
Do a Five-Forces analysis to support your conclusion.
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Strategic Management, 3/e
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4. eBay
2. What is the competitive arena in online auctions – local, regional, national, multi-national, or global?
Is the arena changing?
Is global competition a future possibility?
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5. eBay
3. What forces are operating in the online auction macro-environment that have the power to alter the nature and structure of competition?
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Strategic Management, 3/e
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6. eBay
4. What does a strategic group map reveal about the positions of the major players in the online auction industry?
Is eBay in a good position on the map?
Why or why not?
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Strategic Management, 3/e
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7. eBay
What do you see as the key success factors for firms in the online auction industry?
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Strategic Management, 3/e
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8. eBay What does a SWOT analysis reveal about eBay’s situation?
Is the company in an attractive situation and position?
Why or why not?
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Strategic Management, 3/e
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9. What is your assessment of eBay’s financial condition?
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Strategic Management, 3/e
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10. eBay
Does your competitive strength analysis of eBay and its rivals reveal that eBay has a competitive advantage or a disadvantage?
What are the sources of the advantage or disadvantage?
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Strategic Management, 3/e
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11. eBay
Based on your analysis of the industry and of eBay’s situation, what problems and issues does eBay’s top management need to address?
Which ones are top priority?
Low priority?
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Strategic Management, 3/e
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12. eBay
What actions would you recommend to Ms. Whitman and Mr. Omidyar to improve the company’s competitive position and long-term financial performance?
McGraw-Hill/Irwin
Strategic Management, 3/e
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13. Q1. Industry Environment
Software, servers, and website hosting services readily available; high traffic websites have some clout
Barriers relatively low except for marketing/ad costs; hard for incumbents to retaliate; likely entrants include other Internet portals
POTENTIAL ENTRANTS
INDUSTRY COMPETITORS
SUPPLIERS
BUYERS
Rapid growth weakens rivalry; recent entry of competitors heightens rivalry; Jockeying centers on image, reputation, brand awareness, etc. low switching costs, moderate product differentiation
Individuals have little leverage; power users may have some power; both users have low switching costs
SUBSTITUTES
Classified ads; flea markets, garage sales, live auctions – high transaction costs
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14. Q3. Driving Forces in the Macroenvironment
Growing use of the Internet by individuals and households across the world (favorable)
Recent entry of major competitors and the potential for further entry (unfavorable)
Advances in Internet technology as concerns site reliability, security of credit card transactions, and user connection speeds (favorable)
The long-term potential for global competition as the industry leaders maneuver and position themselves to contend for global market leadership
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Strategic Management, 3/e
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15. Q4. Strategic Map eBay Reputation/Brand Awareness Auction Categories
Yahoo, Amazon
Strong
Med.
Weak
eBay
QXL.com
Classified Ads
Reputation/Brand Awareness
Niche auctions, Fairmarket.com
Live auctions
Flea markets/
Garage sales
Auction Categories
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Strategic Management, 3/e
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