This thesis deals with strategies for an internet company to succeed in an international market. In today’s markets competition becomes more and more intense. Companies have to follow up new strategies even faster, because rapid economic changes can make strategies that were successful yesterday, obsolete today. But also new communication methods like e-commerce, e-mail, or mobile phones have a revolutionary impact on daily business , especially on account of the internet companies who have to offer their customers “different ways to communicate, receive information and buy goods”. Companies need to rethink their opportunities in the markets and have to adapt their strategies according to the global changes that occur.
Table of Contents
1. Introduction
1.1. Executive Summary
1.2. Scope of Work
2. Problem
2.1. Definition of Problem
2.2. Relevance of Problem
2.3. Research Methods
3. Competitive Strategies
3.1. Major competitive Strategies in international Markets
3.1.1. Market Leader Strategies
3.1.2. Market Challenger Strategies
3.1.3. Market Follower Strategies
3.1.4. Market Nicher Strategies
3.1.5. First Mover Strategy
3.2. Selection of relevant Theories
3.2.1. Detailed Analysis of the Market Nicher Strategy with regard to the Internet
3.2.2. Detailed Analysis of the First Mover Strategy with regard to the Internet
4. Theories for using the Internet effectively in international Markets
4.1. Major Drivers of the new Economy
4.2. Major Strategies for using the Internet as a Distribution Channel
4.2.1. Using the Internet to publish Product Information
4.2.2. The Internet as a minor Distribution Channel for a Company
4.2.3. Brick-and-Click Strategies
4.1.4. Strategies for an Online Enterprise
4.3. Selection of relevant Theories
4.3.1. Analysis of the Strategies to use the Internet as an exclusive Distribution Channel
4.3.2. Potential and limitation of E-commerce
4.3.3. New strategic Forces in the digital Age
5. Case
5.1. Definition and History of Online Auctions
5.2. Case Description of the Internet Company eBay
5.3. How to apply Research Methods to Case
5.4. How to apply the Market Nicher Strategy onto the Case
5.5. Analysis of the First Mover Strategy of the Company eBay
5.6. How eBay is successful in using the Internet as an exclusive Distribution Channel
5.7. Future Prospects of the Business Strategies of eBay
6. Conclusion
Objectives and Topics
This thesis examines strategies for internet companies to achieve and maintain competitive advantage in global markets. It investigates how businesses can adapt to rapid technological change, utilize the internet as an effective distribution channel, and optimize their market position through various strategic models.
- Analysis of major competitive strategies including Market Leader, Challenger, Follower, and Nicher approaches.
- Evaluation of the First Mover strategy and its implications for e-business success.
- Strategies for integrating the internet as a distribution channel (Information publishing, minor channel, Brick-and-Click, and pure Online Enterprise).
- Case study analysis of eBay, focusing on its market niche, application of competitive strategies, and future growth prospects.
- Identification of new strategic forces in the digital age, such as industry convergence and increased market transparency.
Excerpt from the Book
3.1.2. Market Challenger Strategies
A different strategy is the one of being a market challenger. Companies which are close by the market leader and are able to attack the leader can be defined as market challengers. The management of the market challenging company now has to decide which strategy to follow.
In a frontal attack against the market leader, the success of the head-on challenge is likely to depend on four factors. First of all, the competitor needs to have a clear competitive advantage, which e.g. is based on cost leadership. Second, the challenger should be able to deliver the customer not only the product, but also further services such as after-sales service. Third, the company is more likely to have success, if there are some restrictions on the leader’s ability to retaliate, which could include patent protection or technological lead times. Finally, the challenger needs the adequate resources to be able to compete against the market leader if he responds to the attack.
By a flanking attack mostly unguarded ground is attacked, which means attacking geographical areas or market segments which the competitor merely serves. This kind of attack does not provoke the competitor as much and also it has the advantage, that even a challenger with fewer resources than its opponent is more likely to be successful than in a frontal attack. The encirclement attack in contrast is much more aggressive and has the intention to attack the opponent from all sides and with all combinations of product features in every market segment.
Summary of Chapters
1. Introduction: Presents the thesis objectives, focusing on the necessity for companies to adapt strategies to rapid economic and technological shifts caused by the internet.
2. Problem: Defines the research challenge of achieving competitive advantage in the internet age and outlines the primary and secondary research methods used.
3. Competitive Strategies: Explores classic market position strategies such as Leader, Challenger, Follower, and Nicher, while emphasizing the impact of digital forces.
4. Theories for using the Internet effectively in international Markets: Discusses the drivers of the new economy and outlines distinct strategies for leveraging the internet as a distribution channel.
5. Case: Provides a comprehensive study of eBay, analyzing its history, its successful application of the Nicher and First Mover strategies, and future challenges.
6. Conclusion: Synthesizes findings, emphasizing the critical role of internet infrastructure in modern business strategy and the need for constant innovation.
Keywords
Competitive Strategy, Internet Company, International Market, Market Nicher, First Mover, E-Commerce, Distribution Channel, Digitalization, eBay, Online Auction, Market Challenger, Business Strategy, Customer Loyalty, Brand Awareness, Innovation
Frequently Asked Questions
What is the core focus of this thesis?
The work investigates how companies, particularly internet-based businesses, can gain and maintain competitive advantages in global markets amidst rapid technological changes.
Which central topics are covered?
Key topics include traditional competitive strategies (Leader, Challenger, Follower, Nicher), the role of the internet as a distribution channel, and the strategic requirements for online enterprises.
What is the primary objective of the research?
The study aims to provide a theoretical framework for e-business strategies and apply these theories to the real-world case of eBay to evaluate its success and future viability.
Which scientific methods are employed?
The thesis utilizes both secondary research, based on academic literature and market studies, and primary research, involving expert interviews and a survey of 102 internet users.
What does the main body address?
It provides an in-depth analysis of competitive strategies, explores internet-specific business models like Brick-and-Click, and evaluates how eBay utilizes its market position.
How can the work be characterized by its keywords?
It is characterized by terms such as competitive strategy, e-commerce, market nicher, first mover, and digital transformation in the context of global online trading.
Why is the "First Mover" strategy significant for eBay?
The First Mover strategy allowed eBay to establish market entry barriers and build a dominant, reputable brand, which remains a key success factor in maintaining its customer base.
How does the author evaluate the "Brick-and-Click" strategy?
The author views it as a strategic hybrid that combines traditional strengths with digital efficiency, though noting the risk of channel conflicts between online and offline operations.
What are the major threats to eBay identified in the study?
Key threats include potential fee dissatisfaction leading to collector migration, and technological shifts that could enable smaller manufacturers to launch competing auction platforms independently.
- Quote paper
- Verena Naunheim (Author), 2005, Gaining Competitive Advantage – Strategies for an Internet Company to succeed in an International Market, Munich, GRIN Verlag, https://www.grin.com/document/141761
