Open AccessInternationalization: Choosing The Right Entry Mode: Lessons From Ebay’s Strategy In China
Author(s) -
Onyeka Uche Ofili
Publication year - 2016
Publication title -
european scientific journal
Language(s) - English
Resource type - Journals
eISSN - 1857-7881
pISSN - 1857-7431
DOI - 10.19044/esj.2016.v12n1p202
Subject(s) - internationalization , china , joint venture , business , mode (computer interface) , industrial organization , barriers to entry , marketing , international trade , commerce , market structure , political science , computer science , law , operating system
This paper considers the motivations for businesses to expand to other countries using the entry of eBay into China as a case study. It observed that eBay adopted the wrong entry mode by acquiring 100 percent of EachNet. The company would have performed better if it had adopted the joint venture approach with minority stake as it later did with Tom Online or if it had only retained minority stake, as was the case when it acquired 33 percent of EachNet. It was discovered that the various entry modes have their pros and cons depending on the peculiarity of the host market. This paper therefore, recommends that in entering a new market, companies should ensure to have a proper understanding of the local business dynamics before settling for any entry strategy.