Discussion Post 3







Discussion Post 3

EBay.com is an international company that deals in the online auctions whereby people from different locations in the world have a platform to sell and buy things via the internet. The company was founded in the year 1995 when the electronic commerce was in vogue coupled by what people knew as the ‘dot.com’ bubble-which was the popularization of the internet resulting in huge demand for the internet. The company soon spread its presence by contracting with other companies to provide services such as electronic ticketing of plane tickets. Thus, electronic commerce can be defined as the sale and provision of services or goods via electronic means such as the internet and computer networks. Whereas internet business can be defined, as conduct or provision of goods and se4rvices via the worldwide web relying on the presence of a virtual stores (Harvard Business Publishing).

The transformation of EBay from electronic commerce was necessitated by the growth in demand for in time services by the consumers who wanted a platform that would enable them to purchase goods and services at the comfort of their offices or homes. In addition, competition by new and existing market players in the market forced the company to redefine its strategy in the market such that it could remain a force to reckon with in the market. The returns attributed to adoption of an internet business strategy in comparison to an electronic commerce model would best arrive at a conclusion on the best model for the business (Burn &Barnett, 2002).

In a dynamic information technology era that things are changing with each passing day, there is need for strategies that conform to the diverse information technology market. New innovative products and services are developed almost on a daily basis hence the company outlines ways to keep up with the pace of an evolving market (Harvard Business Publishing). To keep in line with the presence of competitors the company incorporates what is known as the five competitive forces that aid in the survival of a volatile market. The five forces that drive competition that necessitated for new strategies by EBay, which are the presence of identical products and services in the market at relatively lower prices. Existing competitors who are not new to a market re-evaluate their own strategies and opt to develop new products or services that are appealing to consumers. Innovation is driving force for staying relevant in a volatile market especially in the age of information technology.

The presence of new entrants is also a major factor that necessitates formation of new strategies in the market. New entrants in the market come up with new identical products that are maybe better in different aspects, this might reduce the market influence of the company, thus a company is forced to implement new ways that will ward off the new competitors and maintain their market share or even increase their market share (Burn &Barnett, 2002). Moreover, increase in the bargaining power of the consumers in the market calls for development of new strategies in order to meet the new market conditions and trends without suffering operational losses. Furthermore, an increase in the bargaining power of suppliers such that they are able to increase the prices of their supplies without prior negotiation prompts the company to think new ways that will enable survival in a market that has high operational costs.

In a dynamic and evolving market, the driving force is competition. The use of the five forces to the advantage of EBay is never bound to fail because such forces are applied through out all kinds of markets. However, failure of such strategies would necessitate the new ways of ding business such as new marketing to re-establish the presence of the company in the market. Pricing is also another determinant when a customer is tuck between choosing EBay and other competitors. The use of pricing would attract more consumers because the current trends show that consumers have become price sensitive even for meager differences in price (Burn &Barnett, 2002).

Providing consumers with competitive prices for provision of services would ensure that EBay has a substantial number of clients and remains a force to reckon with in the market. Improved quality of service is another factor that can be changed in the market. Some consumers pay for service at whatever price so long as the services meet the best quality in the market. Quality should never be compromised to maintain customers who are loyal to EBay. In addition, quality should be improved to improve the goodwill of EBay in the company (Harvard Business Publishing).

Research and development of new products can be an advantage to the company such that new innovative products can be developed with focus son the consumer needs and preferences in mind when developing the new products. This creates competitive advantage over other competitors in the market.




Burn, J., Marshall, P., & Barnett, M. (2002). E-Business strategies for virtual organizations. Oxford: Butterworth-Heinemann.

Harvard Business Publishing .The Five Competitive Forces that Shape Strategy.. http://www.youtube.com/watch?v=mYF2_FBCvXw


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