Ebay Analysis Essay

5367 Words Oct 28th, 2014 22 Pages
eBay, Inc.

(2002)

Overview

eBay 2002

Founded in 1995 by Pierre Omidyar and Jeff Skoll, the eBay online marketplace was developed in order to provide individuals a place to sell goods and services. eBay became a phenomenon that attracted some 10 million auctions in its first three years. This success provided eBay the necessary foundation to complete an initial public offering (IPO) in 1998.

eBay’s online auction concept is relatively simple. Sellers register with eBay and use its suite of online tools to place nearly any item up for sale. Buyers navigate eBay’s vast array of categories or use search functionality to find goods or services that they wish to bid on. Once the auction is
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Augmented Porter’s Five Forces Analysis
Michael Porter’s Five Forces Model of Industry Competition contends that there are a set of five competitive forces that managers can use to analyze and assess the potential for firm success in a given industry and how to use these forces to formulate a proper strategy for the organization[6]. The forces laid out by Porter include: 1) threat of new entrants; 2) intensity of rivalry; 3) threat of substitute products; 4) power of buyers; 5) power of sellers[7].

Slater and Olson expand on Porter’s Model by focusing not only on industry characteristics but also on market characteristics. None of Porter’s forces are eliminated from the augmented model, but rather they are modified to give a more current business environment analysis. Figure 1 shows the modified model.

Figure 1:
Source: Slater, S. F. and Olson, E. M. (2002). “A fresh look at industry and market

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