Ebay vs Amazon (Porters 5 Force)

In: Business and Management

Submitted By nishu33
Words 560
Pages 3
Porters 5 Force

Rivalry in the Industry

Amazon: Rivalry among competitors is high. Since Amazon offers such an extensive selection there are more companies competing with its products and services. They have direct competition from EBay and Barnes & Nobles.

EBay: Just like Amazon, EBay faces high competitions. Like eBay number of companies offer the same service and products to the market.

Threat of New entry

Amazon: Threat of new entrants is low. It would be virtually impossible for a new company to reach the magnitude of inventory and status that Amazon maintains. Amazon has been in the market for over 15 years now and it would be extremely difficult for a startup company in the industry to raise enough capital to compete with Amazon even on a lower level.

EBay: Compared to Amazon, the threat is relatively high because any company can act as a third party just like EBay to help people sell and buy the products. But when compared to other companies the threat is low because of the brand value or the trust people have when they buy or sell the product.

Threat of Substitutes

Amazon: One would expect substitutes to be high but, Amazon offers good products at low prices, provides fast shipping and excellent customer service. Given these advantages, I would believe that threat of substitutes is reduced from high to medium

EBay: Faces threats from Amazon. But, due to strong brand value the threat from other companies is relatively medium.

Bargaining power of Suppliers

Amazon: Power of Suppliers is Medium-High. Suppliers have a medium power in the sense that much of Amazon's own inventory could be obtained from numerous suppliers across the country or even across the globe. Furthermore, Amazon is a bulk buyer of products and their success depends heavily on collaboration they have with online sellers and business partnership like…...