Like most firms, eBay faces external environments that are highly turbulent, complex

Another aspect of the external environment surrounding eBay is the current and potential competitors in their respective environment. Threat of new entrants is low, despite the relatively simple concept that eBay’s business offers. eBay’s brand was recognized by over 90 million US adults in 1999, and is continuing to grow as the world’s largest P2P online auction company in the world. The larger and more successful eBay gets, the less likely the threat of a new entrant (unless an innovative or additional core competency is established). Bargaining power of suppliers is high because the suppliers are those who are putting the item up for bid. The customer with the highest bid wins the item, therefore the person supplying the item has great bargaining power. Bargaining power of buyers is minimal because essentially there is no bargaining on eBay. Once you place a bid, it is either replaced by a higher bid, or accepted as the highest bid. The Threat of substitute products is high, with other major competitors such as Yahoo!, Lycos, Amazon, and MSN who are smaller niche competitors offering similar services with the same variety of biddable items.

, and global in nature—conditions that might make our break certain successes, especially in today’s dynamic economy. Demographic features that eBay are concerned with include population size, age, geographic distribution, ethnic mix, as well as income distribution. Despite the Internet being available to users around the world, eBay’s successes has been limited to the U.S. region and targeted mainly towards the middle to upper classes. Logically, those with Internet access and items worth selling have a direct correlation with individuals with a computer and money to spend. eBay customers for the most part do not have a particular ethnic mix, which is evident in its ability to allow access to anyone with a computer, regardless of the ethnicity, race, or religion. Economically, although eBay boasts a relatively stable corporate structure, the company itself is not completely immune to the changes- both positive and negative- in the marketplace. Share prices are prone to rise and fall in alignment with the changes of the economy; for instance, in November of 2000, the share price fell 20 percent as a result of businesses slowing down and the diminishing activity on the Internet marketplace. But although eBay’s business is seasonal with volatile revenues, the company has maintained high gross margins of about 70 to 80%. Politically, eBay has been on the forefront of counterfeit, illegal and questionable issues regarding online listings. While on-line publishers are responsible for the content of their sites as an on-line venue, eBay was not according to the Digital Millennium

Some topics in this essay:
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