Ebay Five Forces Analysis Essay

What does your five forces analysis reveal about the nature and strength of the various competitive pressures eBay faces?
The five forces analysis reveals that eBay has some competitive pressures they have to deal with to maintain a market share and competitive advantage. Rivalry is high among competitors in the on-line auction industry, and e bay not only faces competition from other on-line sources but offline sources as well.
The ease of entry into this industry would be considered a medium to high pressure. It leans toward the medium side because the e-commerce market is characterized by low barriers to entry which has encouraged additional smaller companies to try to grab a piece of the on-line auction pie. However it floats back toward the high area because these new companies need to gain brand recognition which takes a significant marketing budget. In addition, the online payment market has …show more content…
“An online auction business plan is like any other business plan; you need to outline what the business will sell, who your target audience is, who your competition is, how you will secure your product and how much capital you will need” (Root, nd). Another important factor for success in the online auction industry will be to stream line operations. Since profit margins for online auction companies can vary dramatically it is important for them to ensure they are operating at maximum efficiency. A final key to success would be customer service. “When online auction customers consider buying, they check the feedback from other buyers who have done business with you” (Root, nd). That is why it is important for these companies to ensure they are addressing all of their customer’s needs. With today’s social platforms, such as Facebook and twitter, it is important to crush all complaints as soon as possible, before they spread like