Entelliu, Digg, Peerflix, Zappos, and Jigsaw: Success for Second Movers in e-Commerce.
Real World Case 2
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prospective new entrants
front runner companies
Questions 1, 2 & 3 only.
1. Is the second-mover advantage always a good business strategy? Defend your answer with examples of the companies in this case.
The second-mover advantage is often a good business strategy, for many reasons.
The main advantage is that the new company has plenty to learn from the successes and
failures of existing companies. It has an opportunity to improve on what leaders are
doing, in terms of improving sales and customer service. To compete with
salesforce.com, an online software vendor, Paul Johnston has focused on usability and
customer support, to offer Entellium. Creating a product that is more user-friendly is
one way in which the software vendor has planned to beat its competition. Another
strategy is to offer customer support 24 hours a day, 7 days a week. Having unlimited
access to customer support makes it less risky for those businesses who are apprehensive,
to take chances and try a new product.
Paul Johnston has taken a product that the leader offers and made it better for the
consumer in many ways. "Lowe's, with its brighter stores, wider aisles, and arguably
more helpful salespeople, has positioned itself as the friendly alternative to Big Bad
Orange" (Birger, 2006). A more user-friendly alternative, with more customer service
availability, is the approach that Johnston has taken with Entellium enterprise software.
The strategy is very similar to that of Lowes. Taking an existing product and delivering it
Better is the strategy chosen by Johnston.
To compete with online news sites, Digg.com has taken a new approach, in how news
is delivered. The news site is more interactive and involves readers. It allows submission
of news articles by anyone who wants to take the time to write a story. In addition, it lets
readers vote on stories and places highly ranked articles on the front page. With many
online news agencies, it is the agency that decides which stories are most news-worthy.
The typical online news model fails to consider the reader's opinion or input. Barb Palser
(2008), points out that the efforts of news agencies to engage readers, such as by
developing podcasts and comment feeds, did nothing to increase readership.
Digg.com provides a news site where readers are an important consideration. It is
more than simply the design of the site, that gets readers' attention. It is the opportunity for
readers to feel important, by submitting their own stories. Like offering a better method of
providing customer service, such as with the Entellium enterprise software, Digg.com
aims to reach readers, by considering their needs and desires, in selecting top news
stories. Digg.com takes an ordinary online business model for news and alters it to work
somewhat like a social networking site. The focus is definitely more customer-centric.
Peerflix, a DVD exchange site, follows the Netflix site, by also combining the
strategy with new concepts or different features. Understanding how both eBay and
Netflix work, gives the second-mover an opportunity to take the best features of both
business models and turn them into something unique. Billy Mc Nair and Danny
Robinson have taken the benefits of Netflix, in offering new or never seen DVDs
to a wide range of movie viewers. They have taken the concept of an online auction
like eBay and have turned it into an ...
The solution discusses a case study on information systemsm and e-commerce.