Name: Noelita Tench

Student Identification Number: AC2011394

Course Number and Title: BU480: Ebusiness Strategy

Assignment Number: Assignment 4

Date of Submission: July 25th ,2023

Part A: How the Internet can help a company to achieve a competitive advantage in the

marketplace through cost leadership and differentiation

Twin (2023) defines competitive advantage as factors that allow a company to produce goods or

services better or more cheaply than its rivals. The rise in technological advancements has

resulted in an increase in ecommerce. The internet can help a company achieve a competitive

advantage in the marketplace through cost leadership and differentiation.

“Cost leadership is a business strategy aiming to achieve a competitive advantage by producing

goods or services at the lowest possible cost” (Economic Times Authors, 2023) With cost

leadership, despite the aim being to engage in production at the lowest possible cost, it is still

important to maintain the quality of the goods or services provided. Access to raw materials and

focusing on fewer products can help a company with cost leadership. The internet provides some

e-commerce with opportunities that lower their operating cost. For example, having stores online

cuts the cost of operating stores because having these stores would require additional resources

which include labour.

Aliexpress is an online company owned by the Alibaba group a leading multinational

conglomerate based in China. (Gitnux Authors, 2023). Aliexpress engages in online retailing

where consumers to buy directly from manufacturers and distributors from China. Their products

are shipped globally. Aliexpress is an example of a company that uses the internet to gain a

competitive advantage through cost leadership. As a result of technology, Aliexpress can sell its

products at a low price while maintaining sales of quality products. One aspect of their company

that provides them with this competitive advantage is their low labour cost. Labour cost is lower

in China than other developed countries, because of this, the chinese manufacturers gain from a
low production cost which allows them to sell their products at a low rate. In addition to that,

Aliexpress benefits from its bargaining power. This, added to the latest and most advanced tools,

techniques, and platforms in technologies gives them an advantage in the marketplace. With low

labour cost and availability of advanced technologies to engage in production, Aliexpress can

afford to sell its products at a low cost while still gaining a competitive advantage. “By keeping

their overhead costs low, these manufacturers are able to offer their products at a competitive

price, which allows them to stay ahead in the ever-evolving global market.” (Gitnux Authors,

2023)This strategy has helped the company attract a large customer base and grow significantly.

A differentiation strategy can be achieved by providing comparatively more consumer benefit

than competitors. (Jelassi, Enders, & Martínez-López, 2014). Companies who use differentiation

as their strategy to gain a competitive advantage in the marketplace create unique products or a

wide range of products that sets them apart from their competitors. The internet provides

companies with opportunities where they can use differentiation as a strategy. With the use of the

internet, companies can set up online stores where they provide a wide range of products and

services to customers and potential customers. In addition to that, that can extend after-sales

services. These aftersales services can help gather intel on potential new products, customer

issues with their products or services and build personal relationships with their customers.

An example of a company that uses the differentiation strategy is Nike. Nike is a sports brand

that provides footwear and apparel. They are set apart from their competitors, not only because

of their brand being identified as one of the top footwear brands but also because they aim at

meeting specific customer needs and tailor their products to suit recent trends and footwear

demands. They appeal to many segments globally with varied needs and preferences. Their
differentiated marketing strategy allows them to be more relevant and attract customers to

different products while fostering brand loyalty in different market segments. (Patel, 2023) As

customers make requests, suggestions and trends change, Nike aims to evolve with it and

provides its customers with products that they desire at an affordable price and still maintains

their quality. Nike demonstrates flexibility and adaptability to customers’ demands and

differences in markets (Patel, 2023) Advancements in technology and the use of the internet has

allowed Nike to expand and promote its brand and products online. By leveraging influencers

and content marketing, Nike maintains a strong digital presence and drives sales through its e-

commerce platform. (Keyhole Authors, 2023) Social media platforms, forums, websites, and

online content has made interaction between Nike and its target market easier and quicker. Nike

has even created an app where customers can purchase their products online and they are using

smaller stores instead of large ones that can be used for order pickups in many areas. CEO John

Donahoe stated that “Nike's online business is booming, the accelerated consumer shift toward

digital is here to stay. Nike’s digital transformation strategy is not easily replicated.” (Thomas,

2020)

Part B: An e-business company (Apple) is type of competitive advantage, strategies to

create superior customer value and sustainable of its strategy.

Apple Inc. (Apple) designs, manufactures and markets smartphones, personal computers, tablets,

wearables and accessories and sells a range of related services. Apple provides its customers

with a wide range of products to suit varied needs. The company releases unique products yearly

with features that meet the needs, demands and preferences of their customers. As a result of

this, it can be highlighted that Apple uses differentiation to achieve a competitive advantage in
the marketplace. Along with its differentiation strategy, Apple has relied on the internet to

enhance its operations. “There are many factors that have led to the success of this firm. One of

them is setting up a strong e-business strategy.” (Pereira, 2023). Apple can now engage in online

selling, receiving electronic payment, e-marketing and interacting with customers and potential

customers. This has resulted in a wider range of customers, flexibility in meeting the demands of

customers and avenues to create more products.

With any company it is important to create superior customer value. “The ability of a firm to

create value for its customers is a prerequisite for achieving sustainable profitability.” (Jelassi,

Enders, & Martínez-López, 2014) Creation of superior customer value increases how satisfied a

customer is satisfied with a company’s goods or services and enhances their shopping

experience. An enhanced shopping experience leads to customer loyalty, where clients feel that

they trust a company, brand, or product, and will value it over that of competitors. “Apple's

brand positioning is based on three key elements: innovation, design, and customer experience.”

(Pereira, 2023) Throughout their existence, Apple has tried to maintain this position by providing

their customers with unique, quality products. They try to build strong relationships with their

customers and giving them what they desire.” Superior design and build quality: Apple products

are known for their sleek and minimalist design, as well as their durability and premium

materials.” (Pereira, 2023)

“From the products to the people who work there, Apple employees are encouraged to think

outside the box and develop new ideas. This helps Apple stay at the forefront of technology and

keep customers returning for more.” (Pereira, 2023) Apple’s ability to build devices with

features that suit their customers’ needs keeps them ahead of their competitors. In addition to
that, they have built a reputation that has allowed them to gain customer loyalty. It is believed

that their strategy to gain a competitive advantage is sustainable because of their continued

innovations, designs and aims at satisfying their customers. Apple is always looking into new

avenues to make their customers happy and provide them with products that are not just simple

to use but products that keep them productive.

References
Economic Times Authors. (2023, July 23). Cost Leadership. Retrieved from

economictimes.indiatimes.com: https://economictimes.indiatimes.com/definition/cost-

leadership

Gitnux Authors. (2023, April 10). Aliexpress: Business Model, SWOT Analysis & Competitors

2023. Retrieved from gitnux.com: https://blog.gitnux.com/companies/aliexpress/#content

Jelassi, T., Enders, A., & Martínez-López, F. J. (2014). Strategies for e-Business: Creating value

through electronic and mobile commerce CONCEPTS AND CASES (3rd ed.). Pearson

Learning Solutions.

Keyhole Authors. (2023, April 25th). Nike’s Social Media Strategy: A Deep Dive Into

Campaigns & Statistics. Retrieved from keyhole.co: https://keyhole.co/blog/nike-social-

media-strategy/

Patel, N. (2023, January 21). Is This Nike's Biggest Competitive Advantage? Retrieved from

www.The Motleyfool.com: https://www.fool.com/investing/2023/01/21/is-this-nikes-

biggest-competitive-advantage/

Pereira, D. (2023, April 24). Apple Business Model. Retrieved from businessmodelanalyst.com:

https://businessmodelanalyst.com/apple-business-model/

Thomas, L. (2020, September 23). Nike’s online business is booming. Retrieved from

www.cnbc.com: https://www.cnbc.com/2020/09/23/nikes-ceo-says-digital-is-here-to-

stay-e-com-business-fuels-sales.html

Twin, A. (2023, March 28). Competitive Advantage Definition with Types and Examples.

Retrieved from www.investopedia.com:

https://www.investopedia.com/terms/c/competitive_advantage.asp