'EBay In China Study Case Essay\r'

' misgiving 1\r\neBay first entered the Chinese grocery in 2002 by acquiring a 33% stake in its local counterpart, EachNet, followed by a full erudition a year later in 2003. critically assess eBay.s choice of marketplace entry scheme for chinawargon (use Key pastoral Matrix), listing some(prenominal)(prenominal) the advantages and disadvantages of its acquisition system (use Drivers (YIP) -CAGE Matrix). 30%\r\nKey Country Matrix\r\nLooking at the structure of â€Å" get word boorish matrix”, we notice that this matrix has two axes (the x-axis that shows the â€Å"competitive military posture” observed in the awkward that we are studying; the vertical axis represents the â€Å"country atractiveness”). For China, we domiciliate say that among many others, on that point is a top 6 of factors that drive investment in that respect (China is an attractive investment country):\r\n1. Capital Availability;\r\n2. fight;\r\n3. Regulatory Environment;\r\n4 . Stability;\r\n5. topical anesthetic Chinese Market and Business Climate;\r\n6. Openness to regional and International Trade.\r\nAnalyzing China’s competitive strength, we conclude that this is a country still developing. China has shortages of infrastructures and go in several markets (China’s competitive strength is not that high).\r\nDrivers (YIP)\r\nLocation of activity is a authoritative source of strength advantage and one of the distinguishing features of global strategy relative to other diversification strategies. presumption internationalization’s complexity, international strategy should be underpinned by a careful diagnosis of the strengths and billing of trend in particular markets. George Yip’s drivers of globalization’ framework submits a basis for such diagnosis.\r\nCAGE\r\n1. Culture distance;\r\n2. Administrative and semi semipolitical distance;\r\n3. Geographical distance;\r\n4. Economic distance.\r\nThe differences a mong the US and China are abundant when evaluating the â€Å" elaboration distance”, the â€Å"administrative and political distance”, the â€Å"geographic distance” and the â€Å"economic distance”. When a guild like eBay assumes intend to expand its business should be aware of these differences and exact strategies that prevent these differences to interfere in business success.\r\nVantages/Disadvantages of the acquisition strategy\r\nWhen a party like eBay assumes intend to expand its business to China should be aware of the differences among both countries and adopt strategies that prevent these differences to interfere in business success. As a disadvantage, we dejection consider the risk of the companionship not adapt in a affirmative way to the new market (there is the possibility of be rejected by the Chinese market). As an advantage, we can consider the possibility of this acquisition became a huge success and the sales can increase of a sudden (as the Chinese market is really big, this means that eBay’s profit would be really high afterward this â€Å"movement”).\r\nQuestion 2\r\nAssess the potential benefits and risks of eBay.s peg embark with Tom Online (use Global/Local Matrix). 20%\r\nThe Global / Local Matrix assesses the good deal of international trade and the volume of contradictory orchestrate investment in an industry. The industry in which it operates eBay is laid in the upper right corner as shown in the figure. It is a global industry which revise the philosophy â€Å"Think Globally, Act Globally” and where there are high levels of international trade and foreign direct investment.\r\nIn recent years the market for e-commerce in China has recorded tremendous growth. The junction venture on analyzing is based in the race amongst TOM Online and Skype communications company online at eBay Inc. EBay is one of the largest brands of e-commerce in the world and TOM Online is a provider of excellent services to Chinese consumers. some(prenominal) companies will guard fiscal contributions online, and the new market being built by a joint venture between eBay and TOM Online will provide a great experience for users. This joint venture will promove the connection between users and channels of distribution. in that locationfore, in our view this joint venture has e actuallything to be a success.\r\nQuestion 3\r\nAdvantages / Disadvantages of JV international strategy\r\nOn one hand, a Joint risk strategy has several advantages, mostly when it is done on a market like Chinese one, which is very protective with its national firms and little accommodative for foreign companies. TOM online is one of the largest wireless service providers and the fifth-largest internet portal in China, which allows Ebay to penetrate the market speedy and easier thanks to its existing brand-awareness among Chinese population, generating for ebay a conviction saver. TOM onli ne has also a strong political asset by being supported by Li Ka-shing, the biggest holder of the company, who has also strong connexions with hugh-ranking officials both in Chian and Hong Kong. This success on the Chinese market shows that the firm has a great expertness on the specificities of this business area, and decrease the risk for Ebay to make mistake with its strategy.\r\nAlso, by making a JV, the financial risks and costs decrease because they are shared between the two firms and a synergy is created between the two sides, increasing the financial power of the firms and allowing them to launch date with shared financial participation. On the other hand, with a JV, the earnings have to be shared, so they are lower. To make this partnership happen, it demand a chew more(prenominal) work and energy than with the other subject of partnership. That includes heavy research about the law and the compatibility between the two structures.\r\nThis setting of the JV comes with a flock of impact on the management of the new entity. There is risk of variation on how the dividends should be shared, disagreement on the managerial model to adopt and on the global strategy. All these problemes can bring to engagement of interest and make the JV losing market shares.\r\nQuestion 4 :\r\nStrategic recomendation on International commercial outline for E-Bay: â€Å"Alliance, Acquisition or Abandon Strategy” : Cf Excel document for QSPM Matrix. Due to this QSPM analysis, we can see that the acquiring method is still more than the expanding method, but from close, thus we know that Ebay is the auction website, so we can council them to continue acquiring the other companies…\r\n'