Why Ebay Failed in China - 1913 Words

A report on Ebay and Taobao. Ebay v/s Taobao Critically evaluate eBay’s chosen market entry strategies, into the Chinese ‘C2C’ market, determining the shortcomings of the strategies deployed during the case study period. When entering into a new market, there are many aspects that must be considered in order for a company to be successful. Through this case study we will look at how eBay developed their market strategy using the concept of six key factors timing, location, marketing, HRM, logistics and ownership (Peng amp; Meyer, 2011) and obtain results on how the company fell apart into the China’s C2C market. EBay entered into Chinese market via acquisition of EachNet, a Chinese online auction established in 1999 by†¦show more content†¦This confusion was one of eBay’s largest problems and it gave Taobao an advantage over eBay (Yeh, 2007). As you can see, eBay made some vital mistakes with their entry strategy with China. EBay used ineffective marketing methods (through websites), not being able to respond to what customers wanted from a C2C market place, and, most critically, being unaware of rivals and their emergence in the market. Appendix 1 shows an analysis of the environment eBay was entering into, and illustrates some vital aspects that better market research could have highlighted for eBay (threat of substitute and internal competition with Taobao, for example). After analyzing the external environment of eBay using Porter’s five forces model, the next step is to focus internally at eBay’s core competencies in order to determine whether those strengths provide them with competitive advantages. In order to define these core competencies as competitive advantages or disadvantages, a VRIO analysis must be used. This technique measures each capability against whether it creates value for the compan y, it is rare in the industry, it is costly to imitate and if it is exploited by the organization. Each core competency identified for eBay is listed in Figure 2 in Appendix 1. Taking complete control of EachNet through full acquisition and therefore having access to all resources of the Chinese Market could have been a successful strategy and would have been if it hadShow MoreRelatedEssay on Ebay in Asia1188 Words   |  5 PageseBay in Asia Kristen Brodosi Dr. Hiatt International Marketing March 12, 2013 Abstract The company eBay began in the living room of Pierre Omidyar in 1995. The company was simply created to connect individuals for the exchanging of goods and services. As a computer programmer, Pierre designed what people referred to as an auction web, connecting millions of people globally through the use of the internet. The growth of eBay was quick and continuous, and today is a biggest global internetRead MoreCase Study â€Å"Ebay in China†1652 Words   |  7 PagesQuestion 1 eBay first entered the Chinese market in 2002 by acquiring a 33% stake in its local counterpart, EachNet, followed by a full acquisition a year later in 2003. Critically assess eBay.s choice of market entry strategy for China, listing both the advantages and disadvantages of its acquisition strategy. As we know, eBay’s China expansion strategy can be considered as failure, despite the fact that eBay entered this potentially rewarding market with caution. This cautious strategy was veryRead MoreEbays Major Mistakes in the Asian Markets1374 Words   |  6 Pagesï » ¿eBay in Asia Inherent Mistakes of eBay As ubiquitous as eBay is to Americans, it is only a few decades old. eBay was created back in 1995 in San Jose in the living room of founder Pierre Omidyar with his partner Jeff Skoll and it was envisioned to be a marketplace for the sale of goods and services for individuals (Bjornsson, 2001). Meg Whitman was eventually brought onboard to sustain the success and to help hone a better vision for the company: that eBay is a company thats in the businessRead MoreTaobao Case Analysis1551 Words   |  7 PagesHARVARD BUSINESS CASE: ALIBABA’S TAOBAO (A) GROUP 2 – GMBA Question 1: What are the major differences in the web designs of Taobao and eBay in China? Which is preferred to on-line buyers and sellers in China? Why? Taobao sought to distinguish itself from eBay in numerous ways. So Taobao’s web designs were imbued with a strong local culture that reflected a deep understanding of Chinese consumers and an attitude of informality. First of all, the website was designed like a Chinese department storeRead MoreTaobao Vs. Ebay China1234 Words   |  5 PagesIntroduction Taobao vs. eBay China covers the emerging consumer to consumer market, growth of the internet, and multiple business interactions throughout a few decades. China started out with few online auctions, no set standardized rules for online trading, a lack of credit cards, debit cards that could not be processed in other areas, no way to make online transactions efficiently, and minimal precautions to eliminate fraud if these other obstacles could be averted. Overtime most of these wereRead MoreWhy Ebay Failed in Asia Essay696 Words   |  3 PagesPierre Omidyar founded EBay on September 3, 1995 after many years of successful business in the United States eBay decided to expand its business to Asia; unfortunately business was not as successful in Asia as it was in the United States. (1) Understanding the four principles of marketing will help explain why eBay did not succeed in Asia. Product, Place, Price and Promotion are rules that eBay did not take into consideration by or clearly u nderstand before proceeding into unknown territory. Read MoreeBays Operations in China and Japan563 Words   |  2 Pages1. eBay struggled in the different Asian markets for two reasons. The first is that they did not have first-mover advantage. In each case, there were other competitors available whereas in the US eBay had a clear-cut first-mover advantage. The major reason, however, is that eBay entered these markets without truly understanding, or adapting to, the local market conditions. Both the Japanese and Chinese markets are different from the American market. The decision to have a sales commission in JapanRead MoreChina E Commerce Market Analysis1564 Words   |  7 Pagescustoms of their customers, Alibaba created an advantage over its competitors. †¢ Marketing tools created a great advantage for Alibaba because by using different sources the company penetrate different markets, and it even help the company to overthrown eBay from the customers to customers business. †¢ The company created a good environment to succeed because it minimize the political risk by working with the government, and creating a mutual benefit between the country and the firm. †¢ The leadershipRead MoreMarketing Tools For The Chinese E Commerce Markets1544 Words   |  7 Pagescustoms of their customers, Alibaba created an advantage over its competitors. †¢ Marketing tools created a great advantage for Alibaba because by using different sources the company penetrate different markets, and it even help the company to overthrown eBay from the customers to customers business. †¢ The company created a good environment to succeed because it minimize the political risk by working with the government, and creating a mutual benefit between the country and the firm. †¢ The leadershipRead MoreAlibaba.Com.1422 Words   |  6 PagesC1. Alibaba.com 1. Alibaba.com was an early entrant into the B2B portal market in China. In about 100 words, explain how this might have created a lock-in effect, especially given the types of businesses he site attracts. Alibaba.com does translation as well as listings for small to mid-sized businesses who want to do business. In so doing there is a lot of time and effort put into this business venture by these businesses. Once they are established and have spent the money to get there they