EBay - new challenges 3 Trends have shown that people are...

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1. EBay’s competitive forces model has some traditional competitors. The most significant is Amazon. It is not difficult to have new market entrants, but EBay has a pretty good hold on the auction business base. Substitute products and services are EBay’s main concern. They have recognized the trend of fixed price online buying rather than auctions. The other sections of the model are customers and suppliers. For EBay they are one in the same, which makes it difficult to make any change to make everyone happy. The value chain model focuses on specific activities to keep the company competitive, and is broken into primary and support activities. For EBay most of the changes that are occurring are in the primary activities. These changes are related to pricing. 2. EBay’s business model is an online auction site. Their business strategy was to provide an easy way for everyone to be buyers and sellers. Zit has been very successful, but is now facing
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Unformatted text preview: new challenges. 3. Trends have shown that people are leaning towards fixed price bulk retailers, like Amazon. EBay has tried to improve its business base by purchasing smaller companies that they thought would help with seller and buyer communication. They have also tried to re-price the way they do business. 4. In some cases the companies worked out well, and others have not. For example, Skype never caught on as expected. The re-pricing benefited some bulk sellers, but upset the core unique sellers. 5. The most significant roles in EBays response to its problems will be driven by buyers and sellers. 6. I think EBay will be successful in the long run because they will always have a good share of online auctions. PayPal continues to be very successful and they seem very willing and able to change to improve the company....
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