During a Labor Day weekend in 1995 Pierre Omidyar (engineer) developed what he said was an “experiment”: What would happen if everyone in the world had equal access to a single global marketplace? Pierre’s idea would grow from a basic auction site that sold a broken laser pointer to a collector for $14. 83; into a multinational corporation with a Global software strategy that served over 100 million users that in 2010, selling more than $62 billion in goods worldwide on EBay. This expediential growth has propelled EBay to be the world’s largest online market place.
EBay started in the United States, which still accounts for a large part of EBay’s profits, but as EBay continues to expand the international market has started to outpace the national market. In 2010 international sales accounted for 51% of eBay profits. EBay’s unprecedented growth in the global market has been an astonishing feat of strategic marketing and branding with its use of joint ventures, licensing, and purchasing of wholly owned subsidiaries to create a recognizable and dominant brand throughout the world. EBay International3.
Discuss EBay’s possible rationale for expanding internationally. In what ways can they use their established U. S. competitive advantage to gain a foothold in foreign markets? The fact was that British and the Americans were already showing the way by trading collectibles and other items across the Atlantic; and van Swaaij wondered to what extent the idea of a marketplace formed by a community of buyers and sellers could span national borders. Matt Bannick too wondered about these possibilities. In 1998, EBay was receiving hundreds of listings a day from Canadian residents.
The major international markets, however, were turning out to be Germany and the United Kingdom. In both these markets, local imitators had emerged, and, indeed, EBay itself was witnessing bids and listings from the United Kingdom. In 1999, EBay ventured into the United Kingdome, Australia, and Germany. Through similar reasoning, in 2000, EBay launched sites in Japan, France, and Canada. Is France and Japan desirable international arenas for EBay? Use the CAGE framework to support your answer. Describe some of the alternative vehicles EBay has used to pursue international expansion.
EBay’s success breaking into international markets has been largely reliant on key acquisitions and partnerships in each new market. Along these lines, EBay partnered with Google in August 2006; the arrangement involves Google providing text advertisements on eBay’s international sites. Despite its failure to gain a foothold in Japan (Yahoo! Controls the Japanese online auction market; EBay has EBay International4. pressed on with international expansion through acquisitions in the world’s two most populous nations, China and India. (Baazee. om is EBay’s wholly-owned subsidiary in India. ) Starting a system from scratch like they done in France and Italy did not provide them with certain technological advantages. Most of the countries they had moved into already had fairly advanced systems. Should EBay acquire rival iBazar in France? Should they abandon the Japanese market? Discuss the strategic implications for each of these decisions. IBazar is one of the leading internet auction sites in Europe with 2. 4 million registered users across the eight countries in which it operates.
IBazar is the leading online auction site in France, Italy, Spain, Brazil, the Netherlands, Belgium and Portugal, and the second in Sweden. iBazar’s first web site was launched in France in October 1998, and the group’s international expansion began one year later, Approximately 70% of IBazar’s users are now located outside France. “We have built IBazar into Europe’s best auction web site, “said Pierre-Francois Grimaldi, President and Founder, IBazar S. A. “Taking it to the next level will be easier by becoming part of a larger company.
It was especially important to find a partner that shares our online trading philosophy. There is no better partner in the internet space than EBay. “This deal is a tremendous step forward for EBay,” said Meg Whitman, President and CEO, EBay Inc. “In one strategic move we have increased our pan-European footprint, as well as the strength of our global trading community. Today we are much closer to realizing our dream of a marketplace where people anywhere on the planet can seamlessly trade almost anything. ”