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 relatively higher barriers.
I would only hold the bargaining power of customers as a medium to high. The only reason it leans toward the medium area is because prices are based on bid or fixed price (Buy it Now). However, customers can choose from a wide range of different shopping forms and this competition within the industry allows customers to demand lower prices to attract them. “Customers demand not only low prices, but also a large range of services and products, their bargaining power is huge” (Trefis Team, 2014).
I would say that the bargaining power of suppliers…