Ebay Case Study

EBay’s Globalization Strategy

Nicole D. Laboy

Columbia Southern University

MBA-6601

eBay’s Globalization Strategy

In 1995 a French born economist named Pierre Omidyar launched the idea of what is now know as eBay. He created the company so it would be an online platform that permits efficient peer-to-peer trading in an auction format. eBay is a web-based forum that provides an efficient market for buyers and sellers of products that typically do not have an efficient distribution system. By 2005, eBay knew that the majority of their customers came from the US but they also knew that in order to sustain the growth they needed to use their overseas markets. Their vision was to support interaction in the eBay community, the principles of trust and safety and the goal of market efficiency. eBay saw its competitive advantage residing in the overlapping zone.

In order for eBay to translate their vision to a global strategy they had to use a so called “triple a”, (acquisition, activation, activity), program. It started by acquiring other auction websites from around the globe, activated new components in other countries and applied all three elements in others. This is how they were going to accomplish their core competency. By doing this they also started to configure and coordinate its value chain. They knew that going full force in to the international business was a must because they alone had a GDP of $12.8 trillion dollars versus the 10.1 trillion dollars the US had.

Just like Yahoo, Google or even Facebook, eBay has a virtual value chain. Its focus is on the virtual world in other words the World Wide Web. This has a great influence on their global expansion. If you ask my opinion I think this is very smart. A lot of people now a day’s use their computers for everything and eBay is tapping in to a community that not a lot of retail stores do. I know for myself I use eBay a lot since I live all the way in Okinawa and I do not have a Wal-Mart or...