Strategic Analysis: An In-Depth Look at E-Bay's Five Forces

This report presents a five forces analysis of eBay, examining the competitive dynamics within the e-commerce industry. It begins with an introduction to Porter's five forces framework, highlighting its importance in understanding industry competition and profitability. The analysis delves into each of the five forces: the threat of new entrants, the bargaining power of suppliers and buyers, the threat of substitute products, and competitive rivalry. The report identifies key factors influencing eBay's strategic decisions, such as competitive rivalry and buyer power, and emphasizes the need for competitive advantages like innovation. It also addresses challenges like product and service similarity among e-commerce providers, customer price sensitivity, and the significance of partnerships with third-party services to improve reliability. The conclusion underscores the value of five forces analysis in assessing industry competition and attractiveness, ultimately providing a strategic overview of eBay's market position and competitive strategy.

Running head: E-BAY FIVE FORCE ANALYSIS
E-BAY FIVE FORCE ANALYSIS
Name of Student
Name of the University
Author Note

1E-BAY FIVE FORCE ANALYSIS
Table of Contents
Introduction..........................................................................................................................2
Discussion............................................................................................................................2
Conclusion...........................................................................................................................4
References............................................................................................................................5

2E-BAY FIVE FORCE ANALYSIS
Introduction
Porters five force analysis is conducted in order to understand the competitors of the
business. Economics is drawn from industrial organization such that five forces can be derived
from the same and it helps in determining the intensity of the competition, helps in identifying
the attractiveness of the industry in order to understand the profitability. The company chosen for
the purpose of this study is E-Bay (eBay., 2019). The main aim of the paper is to carry out five
forces analysis of E-Bay.
Discussion
Rivalry among competitors
Figure 1: E-bay five force analysis
Threat of new entrants
Bargaining power
of buyers
Threat of
substitute products
Bargaining power
of suppliers

3E-BAY FIVE FORCE ANALYSIS
Source: (Namada, 2018)
From the above diagram it can be understood that there are five main factors that
determine the profitability and competitiveness of the industry - Threat of substitute products,
threat of new entrants, bargaining power of suppliers and bargaining power of suppliers
(Namada, 2018). From the five force analysis of E-bay it was found out that competitive rivalry,
the bargaining power of the buying are some of the most import factors in the e-commerce
industry. Therefore the strategic decisions of E-bay are taken on the basis of these factors. The
company can gain profits and withstand these forces with the help of competitive advantage. The
company can make innovation as their competitive advantage.
Through the five force analysis of the chosen company it has been found out that one of
the major problems is that the companies that are engaged in providing e-commerce services are
offering more or less same products and services without much differentiation and therefore the
cost of switching is also low. Therefore the top management needs to identify such points that
can help the company in gaining a competitive advantage and to differentiate itself from other
firms in the organization (Jarzabkowski & Kaplan, 2015). There is also price sensitivity which
shows that the customers are sensitive to any changes in prices and they tend to switch from one
company to another on the basis of prices.
The key success factors for the company can be related to gaining a competitive
advantage over its competitors through creation of competitive advantage through innovation.
Moreover the company’s generic strategy for intensive growth can help in meeting all the
problems that is presently being faced by the company. The company can achieve its vision and
mission through production innovation and development and therefore help in occupying larger

4E-BAY FIVE FORCE ANALYSIS
market share. In order to deal with the bargaining power of the suppliers and the buyers, it is
necessary for the company to enter into partnership with the third part courier services such that
reliability of services (Mathooko & Ogutu, 2015).
Conclusion
From the above discussion, it can be concluded that carting out the five force analysis for
any organization is very important because it helps in understanding intensity of competition
existing in the industry and also helps in understanding the attractiveness of the industry such
that the profitability opportunity can be understood. The company chosen for the purpose of this
study is E-Bay.

5E-BAY FIVE FORCE ANALYSIS
References
Mathooko, F. M., & Ogutu, M. (2015). Porter’s five competitive forces framework and
other factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management, 29(3), 334-354.
Jarzabkowski, P., & Kaplan, S. (2015). Strategy tools‐in‐use: A framework for
understanding “technologies of rationality” in practice. Strategic management journal, 36(4),
pp.537-558.
Namada, J. M. (2018). Organizational learning and competitive advantage. In Handbook
of Research on Knowledge Management for Contemporary Business Environments (pp. 86-104).
IGI Global.
eBay. (2019). Electronics, Cars, Fashion, Collectibles, Coupons and More | eBay.
Retrieved 7 September 2019, from https://www.ebay.com/