Case Study Ebay Globalization

1. What is eBay’s core competency? How does it relate to their chosen strategy?

eBay’s core competency is in developing and improving software and digital infrastructure tools that lead to the creation of a safe, secure, information-rich on-line trading community. The company’s strategy is to allow users to innovate using the tools that it provides, regardless of what they are buying or selling or where they are buying or selling it.

2. How would you explain how eBay has decided to configure and coordinate its value chain?

eBay has a very lean value chain, providing only the tools to make transactions possible and letting users do the work of managing transactions. The core technologies eBay uses are centralized, but because of the need to confine shipping of goods to shorter distances, the need to conduct many transactions in local currencies, and the need to list product descriptions in local languages, eBay has decentralized its value chain configuration by developing largely independent country subsidiaries as well. The company’s vision may be one of seamless global commerce, but the reality is often one of more isolated single country marketplaces.

3. Would you characterize eBay’s value chain as virtual or real? Why?

Most of eBay’s value chain is virtual, due to the fact that the company doesn’t ever actually handle any of the products that are sold on its sites. eBay’s entire objective, in fact, is to create a safe and secure virtual community through which tangible products can be traded by users. eBay’s role in the process is to stimulate, maintain, and strengthen the virtual ties created by users that lead to the real exchange of goods.

4. Consider again your description of eBay’s strategy. Is it different from what it was ten years ago? Why?

eBay’s fundamental strategy has not changed in the last 10 years. The only thing that has changed is the scale on which that strategy is implemented. eBay has expanded its presence within its...