What Is Ebay's Differentiation Strategy

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eBay COMPETITORS Q3 Due to the fast expansion of the internet globally, there has been fast growth of on line retailing. This can be mainly attributed to globalisation where people in different parts of the world have been linked to access various items on the global market place. Due to the global market place many organisations have been forced to ensure that they develop a global marketing strategy that caters for all its clientele. eBay is one such company that has successfully managed to develop a global strategy targeting various customers globally. However, as in any market there are many competitors and eBay has not been spared of this competition. When eBay entered into the market there were already other large competitors such as…show more content…
How eBay has differentiated itself Differentiation is a strategy that organisations use to distinguish its products and services from those of its competitors. According to Hitt, Ireland and Hoskisson (2016) differentiation is the action done to produce goods or services that are viewed by customers as being different yet important to them. Schermerhorn (2009) adds that differentiation pursues a competitive advantage through uniqueness and it also depends on the customer’s perception. Palepu et al. (2007) concur that the differentiation process should be at a suitable cost to customers. eBay exercised their differentiation strategy in various ways in order to attract and maintain their customers and sellers. It is explained that “The corporate sellers have been drawn to eBay because of the explosive growth in the online marketplace. Although eBay charges its corporate sellers (e.g., Disney, IBM, Xerox) the same listing fees as other sellers, some promotional perks are provided to them. For example, Sun, Xerox, and IBM are all given top billing in eBay’s computer area, and Disney has a special area on the eBay site to merchandise Disney products” Becherer* & Halstead, 2004). Differentiation…show more content…
(2007) mention that there are a number of differentiation drivers and these include the organisations reputation, brand and image. Delivery time, quality and product variety are differentiation they need to ensure that they have in place continuous research and development, innovation of their products, constant research of the market they operate in and use technology to their advantage. It can be noted that the differentiation strategy is not cheap and requires continuous investment. Flouris and Oswald (2012) mention that differentiation is very expensive and that companies who pursuer it have to monitor costs to ensure that they continue to have good profit margins. eBay has been effective in ensuring that they maintain good profit margins, as illustrated in the table below showing the eBay’s net profit margin 2005 – 2015 compared to

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