Case Assignment 1 - TUI UNIVERSITY Dean J. Keveles Module 1...

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TUI UNIVERSITY Dean J. Keveles Module 1 Case Assignment BUS401 - International Business Dr. Cyd Naig-Coloma August 23, 2011
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Part I: Asia represents a very important and profitable market for many companies. It is not unusual for many companies to draw major profits from their overseas operations. So, why does eBay have problems in its Asian Markets? As a wholly-owned subsidiary, the venture of breaking into the Asian markets was costly and risky for eBay. eBay acquired the Chinese online auction company EachNet for an initial investment of $30 million in 2002 and finished the acquisition with another $150 million in 2003. In Korea, the eBay also bought the Internet Auction Co. for a total of $502 million by 2004. They even invested $100 million in 2005 to further its ambitions in China. In 2004, eBay's subsidiary, Internet Auction Co., maintained top sales in Korea. However, by 2006, new local competitors have emerged. In China, Alibaba.com's TaoBao and in South Korea, local competitor Gmarket have taken the reigns. In fact, eBay's subsidiary in Korea, Internet Auction, now lags behind GMarket, where Yahoo has been a major investor for cash flow, further challenging E-Bay shares of the Korean market. Even in China, Yahoo has 40% of TaoBao company stocks. This Global Strategic Alliance has created a financial challenge for eBay to try and outpace. Though eBay and Yahoo have an alliance in the US market to keep the upper hand over another rival, Google, in the Asia market, eBay and Yahoo are ferocious rivals. As a tribute to their poor timing, eBay entered this market late behind rival Yahoo in exploiting the lucrative Japanese online-auction market, which eBay eventually left in 2002. Competition is a major factor affecting eBay's ability to set a competitive price for their services rendered in these online auctions. When looking at the marketing strategy of the marketing mix factors, GMarket offers more convenience of use as a product of service, where it offers goods at fixed prices, with an
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option to negotiate with a seller on an exclusive basis. This allows buyers to conclude deals instantly instead of making them wait until all bids are completed in open auctions. Unlike China's TaoBao, some users consider eBay's site less friendly. This is a failure in the promotional aspect of eBay's marketing mix, as well as one major factor affecting price setting;
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This note was uploaded on 10/15/2011 for the course BUS BUS401 taught by Professor Dr.cydnaig-coloma during the Spring '11 term at Trident Technical College.

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Case Assignment 1 - TUI UNIVERSITY Dean J. Keveles Module 1...

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