The Nature And Strength Of The Various Competitive Pressures Ebay Faces

1025 Words Nov 1st, 2015 null Page
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 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…

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