Business Strategy
In the modern business world, companies are trying hard to develop unique business strategies to differentiate themselves and have competitive over other competitors. So what is competitive advantage? A competitive advantage is an advantage over competitors gained by offering consumers with greater value. It can be accomplished through many different ways but the 6 commonly ways used by firms are following:
- Being the first mover/first entrant into the market
- Niche dominance
- Cost Leadership
- Product/Service Differentiation
- Market Share
- Government Protection
Many big web giants like Yahoo and Amazon gained themselves huge advantages by being the one of first few companies that unitized the Internet for business purpose. E-commerce was not commonly used prior to 1990; the ideal of online advertising and retailing have open up a brand new market for them. Being the first mover into an unheard market are extremely risky. Most of time corporations found the market but fail miserably on maintaining their probability when other followers join in. Yahoo and Amazon always improve themselves and push themselves to be on top of the game. Yahoo not only innovate the search engine but also customized and add valued to the site to attract more users. In just few years, Yahoo and Amazon have become multi billion dollar corporation.
After Amazon gain competitive advantage from been first mover, they took a different approach to differential itself from rest of competitors while maintaining their advantages. Amazon dominated enormous market share and expanded its product categories. Now, Amazons is selling everything from grocery, clothing, electronics, to high-end luxury jewelries. E-retailer is the business without having actual stores. With this advantage, Amazon is about to lower the product cost because they have lower inventory holding cost and fewer expenses compare to traditional departments stores.
