Tuesday, March 29, 2011

Tech Rivalries: EBay, Amazon, Nokia, Apple

I was reading WSJ and came across the following three headlines:

I think these three news articles sum up perfectly what we discussed in lecture last time about the difficulty of identify competitors and give an illustration on the HBS book excerpt about Competitor Analysis. Looking at the four companies mentioned (EBay, Amazon, Nokia, Apple), it was hard to imagine several years ago that they would be competing fiercely with each other today on different domains, serving the same type of tech-savvy customers. EBay is trying to match Amazon’s online retail through acquiring GSI Commerce. Amazon is launching a new service, Cloud Drive, for users to purchase and store music and access from mobile devices, thus competing with Apple. Apple, on the other hand, is fighting against Nokia in the smartphone market. We have four competitors, competing with each other in three different markets. Any single move from one of them will impact the competitive landscape of another market. Another thing to be noticed is that these companies employ different strategies to grow – inorganic expansion for EBay, product development for Amazon, legal action for Nokia (reminds me of Professor Zak’s Napster lawsuit story).

As companies of this kind determine strategies,

  • - Is competitor positioning still useful, when nowadays everyone seems to try to do the same thing for everything?
  • How much should they spend on R&D and/or M&A? What factors determine which strategy is more viable?

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