Question 1
Paul Anders Schwamm assertion that EBay’s move to venture in the Japanese Market was a wrong move to make is justified and well-founded. First of all, it is important to understand that before EBay’s entry into the market, Yahoo was functioning as a monopoly in the sector. This means that Yahoo had been able to become a well-known brand in Japan such that it suited the preferences and tastes in the Japanese Market. It is important to note that the perpetual operations of Yahoo in Japan allowed the companies to best understand the cultural context of its business environment. For example, it is evident that Japan is a manufacturing nation because it is richly endowed with technology and other capital endowment. This structure of the economy affects consumer taste because it makes it difficult for consumers to want second-hand goods. This means that the idea of introducing an auction enterprise went against the norms of the consumer market in Japan. EBay’s strategy to venture in such a market would take time to create a well-established market of second-hand products (Waesche 32). Therefore, EBay’s move to start its auction business in Japan faced both the challenge of high competition from an already established Yahoo company, and at the cultural differences of the consumer market which was not attracted to second-hand goods.
Question 2
EBay was at a disadvantage for not being the pioneer of auction online enterprises in Japan. This is because yahoo already had a well-founded market, which meant that the company would be able to easily diversify its scope of service. Due to the Brand name of Yahoo that resonated with the customers, the entry of Yahoo into online auction business would be easily adapted by customers. This is because carious customers who already shopped at Yahoo would get an opportunity to sell back their goods for auction in the same market. However, the late entry of EBay meant that the company was faced with the task of first establishing its brand name so as to get consumer confidence and trust. This is a task that would require a long time and a lot of resources in marketing the Brand. Based on the influence of Yahoo on the Japanese market at the time, it would be difficult for EBay to favorably compete with the company. This accounts for reason why EBay opts to start its business elsewhere such as in China.
Question 3
The cultural misunderstanding in this case is the idea that Japan’s consumer market does not have a preference for auction or second-hand goods. This is because people in Japan want to buy new products based on the fact that the country is a leading manufacturing nation in the world especially in electronics and machinery. This meant that EBay was beginning a business enterprise that did not match that taste and preferences of the consumer market that the company was targeting.
Question 4
EBay is still operational in Japan despite the challenges that the company faced during its entry into the Japanese market. The company’s continued an operation in the Japanese market signifies that the company has over time been able to attract a reasonable size of the Japanese Consumer base. This means that over time to company has gained competitiveness in the Japanese market. One of the factors that might have enhanced the success of EBay in japan is the partnership of the company with Yahoo in 2008(Applegate 47).
Works Cited
Applegate, Lynda M. Corporate information strategy and management: text and cases. 7th ed. Boston, Mass.: McGraw-Hill/Irwin, 2009. Print.
Waesche, Niko Marcel. Internet entrepreneurship in Europe: venture failure and the timing of telecommunications reform. Cheltenham, UK: Edward Elgar, 2003. Print.
