Does eBay deal effectively with its external environment?
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First of all, I want to separate the eternal environment to three parts, one is eBay’s American external environment, one is European and Australian external environment and another one is eBay’s international external environment. In my opinion, eBay’s was good at dealing effectively with American and European and Australian external environment. The reason is eBay’s creator Pierre Omidyar and his wife found a very good business model and vision when they built their business at 1995, which is bidding on Internet community. As the Internet technology environment grown, more and more people like to shop and browse online because online shopping are more convenient, easy, more option and economic. In American market area, eBay was dealing effectively with its external environment, such as eBay’s business concepts, model, acquisitions and strategies.
E-commerce was a very good business model and concept during 90s because buyers could select from a lot of goods and engage in many auctions simultaneously, not only a few of sellers with no compares. Sellers also have a huge market and tons of buyers online. By the way, I did some research about American economic and the American economic was good during 1995-2005. The GDP per person rose from 105 to 130. All the external environment of American was good. According to the article, I think eBay only realized that China and Japan have a huge market with millions of people through the research chart and data, but they did not realize other factors, such as the enter and exit barriers, new entrants and competitive environment. After eBay got into the Chinese market, there were many new e-commerce companies or entrants come out and compete with eBay.
On the other hand, I think eBay may have some problems on deal effectively with its Asian external environment. EBay tried to expand their market shares to China and Japan, but eBay were failures. As I knew, eBay’s Asian strategies were failures with many factors, like eBay did not really handle “the local general environment”, it includes culture, demand, life style, beliefs, buying style and society. Obviously，eBay’s strategies were not adaptable to Asian market because American business environment is very different from Asian’s. In America, eBay made a good community’s effort and influence. As an E-commerce company from America, Asian people were not familiar with eBay. Like China Taobao CEO Ma said, “he believed eBay’s failure in China was due to an inability to build community effect in the country (Jim S. 2014).”
The competitor environment of Asian markets for eBay was important. EBay had a very strong competitor in China. The competitor’s name is Tabobao.com. As I know, Taobao.com is a very successful e-commerce platform in China. Almost 30% (390 million people) of Chinese people are Taobao’s user. In China, there are 590 million Internet users. So, more than 66% of China Internet users are Taobao’s users (sina.com 2013). The entry barriers are very high for any e-commerce company, which want to entre Chinese e-commerce market. I do not think eBay was realized how hard it was for them. EBay might also take a high risk of exit barrier because their business might fail in Asian market.
Up to all my analysis of this article, I think eBay may do the research or the market analysis before they went to China or Japan. I believe eBay was dealing effectively with its external environment problems, whatever Asian or other external environment. But for Asian external environment, eBay was not good as the local e-commerce platform Taobao. I believe that Taobao beyond eBay on the general environment part, and Taobao made a high enter barrier for eBay to get a good market shares too. I also believe it is very hard for Asian e-commerce companies if the Asian e-commerce companies want to have e-commerce business in America. The barriers of enter and exit or the general environment may block them out.