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.
5 comments:
You introduced very well, but you fail to respond the question totally, therefore some parts are missing on it.yOU COULD HAVE GIVE MORE ARGUMENTS AND MAKING A BIT LONGER.
Haha, a harsh comment up there. Your analysis might not be quantitative but it sure was qualitative. I remember Yahoo being one of the earliest website I visit.(long time ago)
Hi Yuan,
I agree that you should expand on your analysis. I also agree that Yahoo! was a first mover in the Internet search engine business, but I question their sustainability. As a matter of fact, though they clearly set the rules and standards of Internet searching, I feel that it's now Google that leapfrogged over them and now dominates this business.
I think this shows that the only thing harder than obtaining a competitive advantage is holding on to it. I think Yahoo! went wrong when they got too ambitious. I mean, what exactly is Yahoo! in the business in these days? I think the answer is EVERYTHING! They deliver news, conduct Internet searches, provide an e-mail service, etc. However, they are losing by trying to do it all and not focusing on one main strength. There is a reason why Microsoft tried to buy Yahoo!...they can sense the desperation.
I think the fact that Amazon was one of the first e-tailers gave them the upper hand. But the funny thing about Amazon is that they are not even the cheapest with their prices. Anything you find on Amazon can be found cheaper elsewhere in the exact same condition. But that is where Amazon's competitive advantage comes along...they provide reliability, quick delivery, and excellent customer service...and I think that's their main competitive advantage.
Ramon
Your analysis is very though. As I was reading your blog, I realized that certain points you mentioned were be thought of by myself at the same time. Yahoo and google do have potential for keeping their competitive advantage for they are changing and adapting as the needs for their customers change.
Hi Yuan,
I agree with your assessment of Yahoo and Amazon as examples of first mover advantage. Amazon clearly continues to benefit from being first large “department” online store. Although now, there are hundreds of smaller similar online stores that provide with similar selection of merchandise and pricing. In my opinion, Yahoo lost its first mover advantage as a search engine after Google came to the play. Personally, I would only search information on Goodle because it is very easy to do and there are no (yet) advertising pop-ups that distract and slow down the process, not like on Yahoo.
Post a Comment