The Globalization of eBay

Done By: Nicholas Abi Haidar Oliver Edde Tony Khodr Jad Khater

The Globalization of eBay

Introduction: eBay Inc., a web based online platform, that permits peer-to-peer trading, and connects buyers and seller from all over the world, was founded in 1995 by Pierre Omidyar in the San Francisco Bay area. Today, eBay has over 100 million users, coming from more than 150 nations, trading millions of goods daily, and this expansion continues as eBay pioneers the online trading world. 1. eBays core competency is in creating, developing, and even improving trading software and digital infrastructure tools, that lead to the creation and enrichment of a safe and secure online trading community. This relates to eBays global strategy by allowing its millions of users from all around the world to use the tools it provides in order to trade anything, anywhere. 2. By only providing the tools needed to make transactions possible and leaving the rest of the work to the user, eBays value chain is considered to be lean. The core technologies eBay uses are centralized, however due to many reasons such as shipping, currency differences, and language differences, eBay has decentralized it value chain configuration by developing large
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independent country subsidiaries as well such as eBay UK for the United Kingdom and others for other countries. eBays vision is one of seamless global commerce, but in reality it is often one of single country marketplaces. 3. eBays value chain is definitely virtual due to the fact that the company never actually handles any of the products being sold on its website. In fact, eBays entire objective is to create a secure and safe virtual trading community, where tangible goods can be traded by users. Its role during this process is to stimulate, maintain, and strengthen the virtual ties users create in order to have a real exchange of goods. 4. eBays fundamental strategy is not different from what it was 10 years ago. The only thing that has changed is the scale on which this strategy is implemented. eBay has expanded its presence within its main market, the United States, and expanded its operations to a number of other countries as well. Moreover, the nature of eBays competitive advantage and the processes the company uses to establish and defend those advantages has not changed significantly, thus I see its strategy remaining the same as well for the coming 10 ten years, but with an even bigger scale of implementation.

5. The key challenge facing eBay is how to expand both regionally and globally. There is a natural tension between responding to local conditions by making things easier for users in their own country and creating a centralized global marketplace. But eBay needs to focus on developing more tools that allow sellers in one country to easily interact with buyers in many other countries. This would include the development of automatic translation software, as well as the development of payment systems that would automatically convert payments from the buyers currency to that of the seller. An even more difficult issue is how to deal with differences in government regulations across countries. eBay has tried to avoid banning activities that violate local rules and instead has chosen to issue disclaimers and rely only on its sellers to abide by local rules. In a more globalized online community, it will become increasingly difficult for sellers to understand and follow the wide variety of government regulations that might apply to their circumstances. However, to continue expansion, eBay will likely have to also develop tools and invest resources to help sellers get over these difficult issues.