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Referencing Chapter 2: Analyzing the External Environment


Regarding the general external environment, eBay must consider the political/legal, economic and global, sociocultural and demographic, and technological forces that might affect the ability of the firm to deliver its services and sustain its business. See which factors in the general environment students might pick that have a significant impact on the online auction industry. Students might respond as follows:


Political-Legal – trade and tariff issues, local and national regulations

Economic – currency fluctuations

Demographic – population growth outside of North America; Asia & Africa had the most population, least Internet penetration

Sociocultural – people worldwide paying increasing attention to social issues, global poverty, the environment; on the Internet, increasing move away from auctions to quicker transactions based on fixed price arrangements

Technological – Internet users had increasingconcerns with online privacy, fraud


The above analysis indicates that eBay should have been well positioned with both resources and a competitive strategy to deal effectively with its external environment, including its competition. However, eBay’s insistence on a single global platform may not be appropriate for all markets. This is why eBay might want to consider developing a more adaptive transnational strategy. Giving up some corporate control in Asia to rely on more local expertise might be critical for success in this market.


Also see the CASE DVD, which has a clip of an interview with Meg Whitman.




Use the tools available at this link to examine the performance of eBay’s stock over the last five years: http://finance.yahoo.com/q?s=ebay

Jim Cramer’s The Street believes eBay is a good stock pick in July 2009 based on what new CEO John Donahoe has done over the year he’s been in charge. See the video report here:



What do you believe explains the stock’s performance? Would you expect the current trend to continue? Why or why not?


Here is a video reportedly produced for eBay’s employees in 2005 on the occasion of its tenth anniversary. It interviews eBay users from different perspectives, one of whom is a Chinese seller using Eachnet.



Watch the video interview of eBay outgoing CEO Meg Whitman and incoming CEO John Donahoe dated January 2008 on the transition in leadership and projected changes:



Focus is on making eBay “easier and safer to shop”. Changes were announced regarding product and pricing. Some eBay patrons have been getting increasingly upset with eBay policies. See, for instance, the following series of blogs from Australia starting in 2008. Sellers are upset that they have to use PayPal exclusively:

http://www.bloggernews.net/115079 and sellers are upset that eBay has prevented them from leaving bad feedback about buyers. The implication is that buyers are more important than sellers, at least in eBay Australia:



U.S. eBay patrons have been complaining also. See this article and the comments from August 2008:


and http://www.ebaystrategies.blogs.com/


In the attempt to make it safer for buyers to shop, has eBay alienated the sellers?


How successful do you expect eBay to be going forward?

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