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EBay in Japan, Its Strategic and Cultural Missteps Case Study


eBay’s international and national strategies

eBay was established in the early 1990s, and it quickly developed into a global company. By the late 1990s, it had found more than 24 companies spread out in more than 29 countries across the world. Its strategy of purchasing local companies in target countries as a measure of the quick establishment made it thrive in the European and the American markets. This strategy made it minimize expenses such as advertisements as the locals knew the companies’ eBay purchased (The Global Business Environment par. 3).

The company used myriads of acquisition strategies before entering the major markets. It began by establishing itself as an online auction company in the US. The company improved its flexibility by allowing various payment systems in the US. The entry strategy in most international markets was based on the acquisition of local companies. eBay also acquired multinational online auction companies that enabled it to infiltrate into a large market area. Also, eBay purchased shares in many other companies.

The acquisition strategy was also improved by creating smooth payment options such as personal checks, money orders, Billpoint, Butterfields, electronic check, and PayPal. This enabled it to establish itself as a multinational auto trader. Since the products auctioned on the website were accessed internationally, it made it possible for eBay to boost its acquisitions.

eBay’s entry strategies in Japan

eBay was introduced in Japan in the year 2000 following the entry success of yahoo. However, its entry strategies did not work, and it was forced to withdraw from Japan. eBay entered Japan with the minimal advertisement (The Global Business Environment par. 3). It established itself by purchasing majority shares in NEC Corporation, an online auction company in Japan. This facilitated its entry into the Japanese market. Several new strategies were initiated to enhance eBay’s significance in Japan. The use of super shops that allowed individuals, as well as company participation in the bidding business, enabled an integrated business environment.

eBay proceeded by the establishment of a Japanese website where Japanese products were listed for auction for both local and international markets. However, the company restricted itself to the use of credit cards in all the business transactions (The Global Business Environment par. 6). This restriction was not welcomed in Japan.

Furthermore, the company adjusted the listing fees as well as the final charge fee for the clients. The failure of these systems forced eBay to remove the tax charged on transactions to expand its market share. Lack of enough information about the situation in Japan worked against most of the plans initiated by eBay.

Issues in Japan

The Japanese currency made most of the products to be very expensive on the international market because it was powerful. Products to be auctioned were listed on the website and priced in Yen. Also, the site was designed with the listings in the Japanese language. This greatly affected the participation of the international community in Japanese auctions (Richardson par. 3). The website was made in the Japanese alphabet. This minimal accessibility and use of the website.

Furthermore, the business was comprehensive in terms of safety measures. Graphics were used on the website to enhance the accessibility of services. This is one of the primary reasons why its significance was not felt in the Japanese market compared to other companies (Small Business Administration par. 3).

eBay’s status in Japan by 2000

The eBay company entered the Japanese market with failure. Its strategies were not well received by the consumers in Japan who preferred the yahoo’s approach towards auctioning. By the time the company had fully established itself, its market share was only 3%. Compared to yahoo, a significant player in this industry, it had only managed to enlist 4000 items by 2000. Yahoo had established itself and used to have 18000 transactions per day.

Works Cited

Richardson, Tim. Foreign currency accounting and real world currency effects, 2013. Web.

Small Business Administration. Market Analysis, 2013. Web.

The Global Business Environment. Exploring business. 2013. Web.

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IvyPanda. (2020, July 27). EBay in Japan, Its Strategic and Cultural Missteps. Retrieved from https://ivypanda.com/essays/ebay-in-japan-its-strategic-and-cultural-missteps/

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"EBay in Japan, Its Strategic and Cultural Missteps." IvyPanda, 27 July 2020, ivypanda.com/essays/ebay-in-japan-its-strategic-and-cultural-missteps/.

1. IvyPanda. "EBay in Japan, Its Strategic and Cultural Missteps." July 27, 2020. https://ivypanda.com/essays/ebay-in-japan-its-strategic-and-cultural-missteps/.


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IvyPanda. "EBay in Japan, Its Strategic and Cultural Missteps." July 27, 2020. https://ivypanda.com/essays/ebay-in-japan-its-strategic-and-cultural-missteps/.

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IvyPanda. 2020. "EBay in Japan, Its Strategic and Cultural Missteps." July 27, 2020. https://ivypanda.com/essays/ebay-in-japan-its-strategic-and-cultural-missteps/.

References

IvyPanda. (2020) 'EBay in Japan, Its Strategic and Cultural Missteps'. 27 July.

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