Ebay Problems in Asian Markets Essay

This paper will identify some of the reasons why E-Bay has problems in the Asiatic Markets as an internet auction sale provider. After examining articles from Philip Kotler and David Gertner as well as Moon Ihlwan among others, this paper will provide my answers nigh why did EBay want to stretch ball-shapedly as well as why any of these Asian nations wanted their product line?It will apologise some research explored ab tabu what types of Entry decisions the company procedured in the Asian Markets. Utilizing the knowl advance tucked about the history of global business. Answering the interrogatory about the problems that EBay has in the Asian trade will allow me to cover and apply concepts of the global grocery learned in module 1 in support of my answers. Lastly this correspondence will assess how EBays Marketing Mix assessment of the quad Ps assisted them in the global grocerying strategy the company adopted for the Asian Markets? Why did EBay want to expand globall y and why did nations wanted their business?The reasons EBay patch upd to expand globally were various and resulted in an overall want for the San Diego, CA found company headed by the former CEO at the age and California Gubernatorial candidate, Meg Whitman. Some of the decisions made and acted upon by the companys leadership were akin to the way Meg Whitman ran her political campaign. Instead of researching the culture and traditions of the places they chose to do business and working on an externalise of being topical anaesthetic anaesthetic or at least embracing local cultures and traditions they chose to feed swerves with money.In Whitmans case borrow millions of dollars from herself to try to reason out the issue of losing as a candidate. Getting back on subject, the countries that eBay chose to expand globally in, were like all nations ones that needed jobs. EBay sought the cheaper labor stipend as a win-win situation for themselves or some instances the prediction of a high level of success due to their business reputation. Getting into the commercialise was not difficult as the new food marketplace fell in line with what these countries wanted in ordered to develop their economies while in turn enhancing domestic quality of life for their citizens.EBay felt compelled to expand globally to remain matched as the US domestic market divide was becoming mature resulting in stagnant profits and overall growth. As all companies looking to globally expand eBay was investing in Asia to amplify profits by gaining a positive origination into this new market divvy up however there was no need to create a new market. The majority of the countries they chose had local internet auction industry open up already.EBays ultimate goals were to introduce their open auction business framework at an international scale starting in places like lacquer, china and southwestern Korea to take advantage of these nations emerge economies in order to chang e magnitude wealth. Entry Decisions Through the struggles in gaining entry into these emerging market atomic number 18as, EBay learned that they must adapt as well as embrace some of the new technologies and products advanceed by their competitors in the Asian domesticmarkets in order to be successful or at least competitive in the market.The beating they took in Asia was not justfrom Chinese and southwestward Korean emulation, but from two US bruted competitors in Yahoo and Google. A currentdomestic trammel with Yahoo against the giant Google has not resulted in any increase in positive business in theglobal market plow as Yahoo is continuing to gain more sh atomic number 18s of the market by dint of its ventures with localcompetitors. EBay market entry decisions were integral to their failure in Asia.As ascertained from a case studypublished May 2008 about EBays Strategy in japan 1, they entered the Japanese market upstart after Yahoo Japan had already established and fai led to retain customers. It took them two years to concede the failure of the EBay Japan and instead of do a deal with local investors they finally folded in 2002. Ironically, in 2007 EBay made a deal with Yahoo Japan to share internet sites and products in Japan in a joint tissue site called Sekaimon 1.Their failures in Asia has eventually led to layoff of workers in countries like chinaware and shutting down of several sites in Asia while rerouting customers to US based sites to maintain a virtual presence. In 2006 EBays South Korean venture Internet Auction was bested by a South Korean competitor named Gmarket whereas they equaled or eclipsed EBays profit share in South Korea that year. Gmarket as well produced innovating products to the internet auction industry such as making shopping via internet fun and using tie-in promotions.Excerpts taken from a Moon Ilhwan internet article in Business Week2, further explain the stiff competition EBay had in South Korea from Yahoo and the local upstart, Gmarkets business feigning places less emphasis on an open auction format than eBays. The company offers goods that one can order at improve prices, with an option to negotiate prices with a seller on an exclusive basis. This allows buyers to quit deals instantly instead of requiring them to look until all bids are completed in open auctions and another tie in marketing program is a lottery called lucky auction.It gives buyers chances to buy everything from LCD televisions to T-shirts at a calculate of the market value. A seller promoting an MP3 player, for example, invites consumers to bid for two of them within a given price rangeusually less than 10% of the sell price. Then Gmarkets computer picks two bids at random to decide the winners. Others visitors can buy the MP3 player at a special offer price. The seller attracts consumers, while Gmarket happily hauls in commissions.Another incentive at Gmarket is that retailers can offer online links to their o wn mini homepages within the site, issue discount coupons, run joint mileage points programs, and part an internal courier service called G-messenger for instant chatting with sellers. Some shops listed on the site arrive at also drawn traffic by promising to donate 10 cents to a favored charity every time a product is exchange 2Thus far EBay has attempted joint ventures and mergers to enter the Asian market share and has met negative results.This has had a negative effect on their overall performance to expense ratio in their stock valuation from 2000 thru the present time but has not deterred management from continuing to compete for a market share in Asia. An ongoing joint venture with Yahoo keeps EBay with a foot in the door of the foreign market and continues the strategic alliance against Google. EBay has expanded to Southeast Asia to see what they can obtain in Singapore, Malaysia and through operations in the Philippines. Currently they are doing promotional sites in Thai land and Vietnam to dope future profits in those nations as well.EBays use of the Four Ps in their marketing mix assessmentEBays use of the Four Ps in their assessment of their global market strategy was regretful in Asia when in comparison to Yahoos success. Lost on the EBay leadership was the desire to be a better of the local market and understanding cultural diversity of each Asian nation they wanted to establish a market. From my personal take cares going to countries such as Japan, South Korea, Guam, or the Philippines for business this is vital to earning shares of the Asian market and as a personal prospective as well.Yahoos co-founder, Yang is a male businessman of Chinese-Taiwanese descent which had to give Yahoo an edge in Japan, china and South Korea over EBays CEO at the time Meg Whitman who was female, Caucasian descent and unaware culturally of how to gain the confidence of local leaders and business persons. 3The product that EBay had to offer was vigor innovati ve to the Asian market as there was already a local variant of online auctions/internet industry thriving in Japan, China and South Korea.Timing and placement of EBays business model was late and over reaching as Yahoo already was established in each of the locations chosen and early profits resulted in a inconclusive analysis of future outcomes for EBay in Asia. Promotions used on the global EBay sites had announce geared globally instead of locally which went ignored by local customers. More emphasis toward local advertising of domestic interests could have attracted and retained their customer base.Lastly, pricing of their product which was part of the business model was somewhat excessive and confusing. So when an upstart company like Gmarket introduces something elemental like, fixed prices and special deals the customers internet shopping experience just became more simplified to use and less time to use resulting in a more desirable overall product than EBay was pass at t he time. The EBay pricing system had customers waiting out the end of a bidding process which still did not fix the customer the outcome desired if they were outbid.EBays managements inflexibleness hindered the local managements ability to make decisions that would help them turn more of the local market share and build from there in their own country and marketplace. 3 Discussion EBays ventures in expanding to a global market were incurred several surmountable challenges. As stated in the lesson the Asian market share is vital and profitable for many companies. As the research depicted one of EBays primary challenges was completion at several levels global and local/domestic competitors all vying for a market share of the internet auction industry.EBay attempted to manage market entry problems long after their original business model was viable in the region, by adapting lowering or waiving fees for its services to keep up with the competition from Yahoo, Google, Chinese stall wo rth Internet Auction and South Korean upstart GMarket. EBay failed to incorporate some of the local technical innovations that likes of GMarket produced for its customer base such as, local advertising on the sites, fixed price so that internet shoppers could get what they were shopping for and not have to outbid others and wait for the outcome of who actually won/bought the products advertised.History was another problem for EBay, they did not study the culture and traditions of the places they chose to enter the market at. Cultural traditions and business practices are conversely different in China which operates under quasi-governmental entities, and Japan and South Korea where they operate under version of the Free Market concept. Along with not understanding Asian cultures the company did not attempt to adapt its global business model to the local market when incorporating its management and leadership philosophies to the region.This resulted in a management and leadership staf f overseas that would not be capable of maturing as a team to meet the local demands of the market. safe being in the region did not give EBay the advantage they seemed it would, thereof their own inflexibility and lack of foresight contributed greatly to the problems they are face up in the Asian market. To EBays credit they have not thrown and twisted in the towel and have remained in Asia through joint ventures and are actually conducting promotion in Southeast Asia (Thailand and Vietnam) as well operations in Singapore, the Philippines and other places.