Industry and Competitive Situation Analysis 1. Dominant Economic Characteristics of the Online Auction Industry Market Size: ÃÂ§ 14.5% of an estimated 320 million users will be registered to an online auction site.
ÃÂ§ Revenues from online business-to-business are a $145 billion market. Business-to-consumer is 31.2 billion.
ÃÂ§ The national market for auctions, garage sales, flea markets and classified purchases was greater than $100 billion in 1999 ÃÂ§ In 1999 an estimated 8.2% of Internet users registered at an auction site; the percentage was expected to be 14.5% by 2002.
Scope of Competitive Rivalry: ÃÂ§ Dominant players are competing internationally in parts of North America, Europe, Asia and Latin America as well as local and regional competitors going after niche markets.
Market Growth Rate: ÃÂ§ Estimated growth of business-to-business sales is 665% by 2004.
ÃÂ§ E-commerce in the U.S. accounted for over 65% of all Internet transactions in 1999 but estimated only 38% in 2003.
This indicates the growth in other parts of the world.
Stage in Life Cycle: ÃÂ§ Rapid growth and takeoff ? the market is in a boom, as markets open up around the world, and more households are connecting to the Internet.
Number of Competitors in Industry: ÃÂ§ There are a small number of market leaders, including eBay, Amazon, and Yahoo as well as a group of smaller competitors such as eHammer, edeal, and Haggle online.
Customers: ÃÂ§ Bargain hunters ? view online auctions primarily as a form of entertainment; their objective usually was to find a great deal.
ÃÂ§ Hobbyist/collectors ? used auctions to search for specific goods that had a high value to them personally.
ÃÂ§ Sellers ? There are three types, casual sellers, hobbyists/collectors, and power sellers.
Ease of Entry/Exit: ÃÂ§ High entry barriers due to the strong market leaders. New entrants...