eBay¡¦s primary problem is how to cope with the challenge of sustained growth and maintain its position as the dominant player in the auction industry. Its secondary problems are the challenge to retain its traditional values and community culture, given its rapid growth and the changing size and composition of its user base and the challenge of how far can the company expand before its core business model begins to erode. Also, there is the challenge of how far can the company expand into new auction categories before they are placed in direct competition with large, well-known, well-funded, and resourceful rivals. In line with these problems are certain issues that eBay is currently facing. First, a segment of small sellers who felt that eBay had ¡§sold out¡¨ to large companies and have neglected the needs and interest of individuals and collectors who had been so instrumental in spreading the popularity of online auctions. The other issue is the erosion of its key competency which is its sense of community that helped establish eBay¡¦s position in the market. There are several options which are open to eBay but they must

The potential entry of new competitors ¡V Many companies are attracted and motivated to enter this industry due to its high profits and growth. These companies add competitive pressures in the market place. The entry of new firms, on one hand, is easy because of the easy access to distribution channels. Anyone with the Internet connection can access any auction sites regardless of how huge or how small the company is therefore new firms will have adequate access to consumers. On the other hand, it is hard because of economies of scale. New competitors will need to enter on a large scale which is both costly and risky in order for them to compete with larger, well-established companies. It is also hard for new companies to enter because learning and experience curve effects. New entrants face a potentially significant cost disadvantage competing against existing firms with more accumulated know-how. New entrants will be unable to match the technology and the specialized know-how of firms already in the industry. Their successful entry will require technological capability not readily available to them. Brand preference and customer loyalty is also another factor which makes entry difficult. Buyers are often attached to established brands and it is most of the time difficult to persuade buyers to switch brands to new firms.

„ To cope with the challenge of sustained growth.

„ Loss of small merchant customers or users due to their increasing frustrations and dissatisfactions

THREAT „ Brand switching of consumers to principal competitors

Competitive pressure from collaborative partnerships between sellers and suppliers ¡V Rival companies in the online auction industry are forming long-term strategic partnerships with suppliers in order to make their services more competitive in their drive to be the market leader. This enhances the service quality, improves the technology and functionality and consequently increase the companies market share. These benefits can be translated to competitive advantages which puts a company on the lead compared to the others.

„ A compelling and entertaining trading environment that featured strong values and facilitates efficient communication and trade between buyers and sellers.

be able to decide which opportunity should the company pursue.

Some topics in this essay:
Auctions Amazon, China Taiwan, Online MarketplaceTM, Analysis STRENGTH, Analysis Problems/Issues, Options Based, III Recommendation, Matrix Stars, Forces Competition, product categories, community culture, trading platform, auction industry, , position dominant player, dominant player, position dominant, trust safety, features functionality, website features, sense community, website features functionality, existing product categories, enhance website features, traditional values community,