Retail Management: A Strategic Approach

Retail Management: A Strategic Approach Barman and Evans As recently as 2000, Ebay had virtually no International operations.

Then, international expansion became a major strategic Annihilative. By 2005, the firm had Web sites in 31 countries around the world – ranging from Brazil to Germany to China. EBay’s 2005 foreign operations generated well over USES billion in revenues, accounting for 46 percent of eBay’s trading revenues. By 2008, 54 percent of sales of eBay’s shopping Web sites and 43 percent of the revenues generated through eBay’s

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Papal division (eBay’s online person-to-person payment processing business) came from global markets outside the United States. EBay has succeeded abroad because its global strategy Is flexible enough to adapt to countries with different cultures, while retaining the core elements of its online business model.

The global strategy Is based on a playbook that is a “how-ad’ manual that covers such topics as online marketing, category management, and community outreach. The playbook, which is constantly updated, consists of several hundred Web pages that summarize the ongoing collective wisdom of all of eBay’s worldwide managers. Bay’s playbook details how to drive customer traffic to a local eBay site through online ads at a country’s most popular Web sites and search engines. The playbook also dictates that products, information, and chat groups be created by buyers and sellers in that country. Thus, eBay looks and feels like a particular foreign country’s Web site brand. This strategy also avoids problems associated with a cookie-cutter approach to Web site planning on a global basis.

Meg Whitman, who became eBay’s CEO In 1998, originally wanted to perfect eBay’s concept in the united States before going abroad.

However, she soon realized that many small competitors were springing up around the world. She became concerned that unless eBay went global, she would forfeit many opportunities to these small local firms or to major firms such as Amazon. Com and Yahoo!.

She also realized that growth on eBay’s shopping sites would slow as small-business owners could choose to list items on sale on Amazon. Com, through free classified sites, or on their own Web site. EBay’s first foreign market was Germany, chosen In part due to the country’s 40 million Internet users. EBay purchased Lands, an eBay copycat site, for US$47 million In June 1999.

A German business student had started four months earlier. From the beginning, eBay was careful to adapt Its sites too country’s culture.

A lot of effort went into figuring out how to structure categories based on German customers’ Shortly after buying Lands, eBay launched its own sites in Great Britain and Australia. In 2001, eBay acquired Koreans Internet Auction Co. And Rupee’s ‘Bazaar. The latter gave eBay access to Italy, The Netherlands, and Spain. EBay then bought a minority interest in Ineradicable, Latin America’s leading auction firm.

EBay also has ownership interests in Web sites such as Kiwi, Canada; Gummier. M, Great Britain; Liquor. Com, Spain; Marketplace. Ml, The Netherlands; mobile. De, Germany; and Scraggliest, which operates globally. 1.

Evaluate the pros and cons of eBay’s playbook strategy. 2. Comment on the choice of Germany as eBay’s first international market. 3. Describe the pros and cons of eBay’s entering an international market by purchasing a foreign firm rather than building an operation from scratch. 4.

Comment on this statement: “eBay has succeeded abroad because its global strategy is flexible enough to adapt to countries with different cultures, while retaining the core elements of its online business model. “