Analysis of External Forces in eBay

Running head: ANALYSIS OF EXTERNAL FORCES IN EBAY
ANALYSIS OF EXTERNAL FORCES IN EBAY
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ANALYSIS OF EXTERNAL FORCES IN EBAY1
Introduction
Porter’s model of five forces provides a framework for the analysis of the competitive
environment of rivals, new entrants, suppliers, customers and substitutes that can influence
the organizational activities and thereby its profitability. E-commerce is a booming industry
in the world with one of its major players being eBay (Ebayinc.com 2019). The external
factors affecting the business activities in eBay shall be discussed further in this study using
the framework of Porter’s five forces.
Discussion
Figure 1: Porter’s Five Forces analysis of eBay
(Source: Author)
The analysis of the five competitive forces faced by eBay shows the nature and
strength of its influence on the business activities of the Company. The rapid growth of the e-
commerce and online auction industry entails that eBay faces strong competition from
CompetitiveRivalry:HighThreatofnewentrants:HighBargainingpowerofcustomers:ModerateBargainingpowerofsuppliers:LowThreatofsubstitutes:Low