SEMINAR 2 – COMPETITOR ANALSYS (STRATEGIC GROUP MAPPING)

Using Strategic Group to analyze industry’s competitive structure (TB Page 56)
 Requires the firm to plot companies’ competitive actions and competitive responses

Amazon
 Enjoys significant cost reduction in operating expenses as compared to brick and mortar retailers
 Passes these saving to the customers
 Cost of expanding its product offerings is negligible, allowing them to offer the largest product range
among all the firms.
 Acquired Zappos and was able to integrate its superior customer service into their operation
 This enables them to deliver better customer service and converging to Best Buy’s service standard
 The nature of Amazon’s operating discourages too much customer service contact  room for
improvement

Walmart
 Largest discount and variety retailer  large EOS and bargaining powder with suppliers
 No support staff to focus on cost competitiveness

Costco
 Higher quality good
 Eg: goods are rebranded to go under its Kirkland Signiture store brand to fit its upscale image
 Eg: its concierge

Radio Shack
 Niche Market
 Small range of traditional consumer electronics
 Too niche to have much EOS to gain cost advantage