Ebay E-Bay Environment the Environment

Ebay

E-Bay Environment

The environment in which eBay is developing its activity is consisted of a series of factors that are part of a complex structure. There are economic, social, cultural, legal, political, demographic, and ecologic factors. In a static way of analyzing the environment's components at a certain moment, they combine in a certain structure that reflects the nature and the degree of development of the society in which the company is active.

First of all, one must analyze the company's environment in a general manner. The company's environment may stable, unstable, or turbulent. For the United States, eBay's environment may be considered to be stable in the present, as it is characterized by relatively quiet periods. Economic phenomena's evolution is slow and slightly predictable, and is not raising many adaptation problems for the company.

On the other hand, eBay's presence in Asia is experiencing quite an unstable environment. The Asian economic environment is going through both positive and negative evolutions that cannot guarantee a certain degree of certainty on the long run, as "doing business as usual is not sustainable over the long-term" (Somavia, 2007). Even if the Asia region benefits from significant growth and development at the moment, it is also facing negative issues due to environmental pressure, economic insecurity, shortcomings in governance, and unequal income distribution. These factors determine economists to consider Asia to be an unstable environment for businesses, including for eBay.

Porter's five forces, or the company's microenvironment, are the elements that eBay is in direct, permanent, and strong relationship with. These relationships are dictated by the company's necessity to attain its objectives. Probably the most important of eBay's microenvironment's components is represented by the clients, the buyers. Their number is usually fluctuant, slightly increasing over the last period of time. Another very important microenvironment component is represented by suppliers.

Competitors are a special category of eBay's microenvironment's components. EBay's most important direct competitors are Amazon Inc., Google Inc., and Yahoo Inc. The companies are quite similar, they have similar sizes and number of employees, or quarterly revenues growth level. However, there is little threat of new entrants on the market, as eBay is at a very high level that is very hard to be attained by smaller new entrants, requiring substantial initial costs that are not available for smaller companies trying to enter on this market. However, eBay may have to deal with such issues in the Asian region, where the company is not as strong as it is in the United States.

EBay's macro-environment is consisted of the demographic, economic, technological, cultural, political, institutional, and natural environment. The economic environment is the most important one, for both the United States and the Asian region. Unlike the Asian unstable economic environment discussed above, the United States' economic environment is more stable, as it presents an increased growth potential, it ensures fiscal sustainability and reforming taxation (OECD, 2007). For both regions, the demographic environment is favorable for eBay's activity.