Case Questions Amazon, Apple, Facebook and Google

SUKKUR INSTITUTE OF BUSINESS

ADMINISTRATION

FACULTY OF BUSINESS ADMINISTRATION

Strategic Business Management
BS VII (A&F)
Fall 2018
Ventakash Pawan Bodani
Amazon, Apple, Facebook and Google

There is a contest to dominate the world’s digital infrastructure. Four businesses, by 2012, have
reached a scale that gives each a chance, if they want to pursue it, to be the platform that firms rely to
reach online customers. Will a balance of power among the four prevail, will one take command at the
expense of the other three, or are all four more vulnerable than they seem to outside forces? What are the
implications for the pace at which consumers go online?
This case examines the contest for platform dominance in online commerce and advertising
among these four firms, collectively valued at $1 trillion. They are Amazon, Apple, Facebook, and
Google.

Case Questions

1. Pastel Analysis and any identify key factors. (EACH COMPANY)

Pastel define Reasons Counter (Strategies)

Political Factors These are all AMAZON: There is no such much
about how and Amazon is an e-commerce impact of political factor on
to what degree a offering catalog to all over the AMAZON, APPLE,
government globe. Amazon operates oversea FACEBOOK and GOOGLE.
intervenes in the so it must relies on government So it should not be more
economy. This to implement distribute and focused on making counter
can include – profit. strategies for this factor.
government
APPLE:
policy, political
Heavily dependent on lower cost
stability or
instability in manufacturing in China. Social
overseas and political and political unrest
markets, foreign in China could disrupt
trade policy, tax manufacturing or increase
policy, labor manufacturing costs in that
law, country.
environmental FACEBOOK:
law, trade Political stability in developed
restrictions and countries.
so on. Popular governmental support for
 globalization.
Political barriers in the Chinese
market.
Political action on online data.
GOOGLE:
There is widespread criticism that
Google is a monopoly. This has
led to antitrust action,
particularly in Europe. There have
been calls for Google to be
broken up or for it to change the
way it conducts searches.

Economical AMAZON: There is no such much

Factors Retail is one of those industries impact of economical
that can take an economic factor on AMAZON, APPLE,
beating and still remain FACEBOOK and GOOGLE.
profitable. It’s not indestructible, So it should not be more
but people will always have a focused on making counter
need for items sold by strategies for this factor.
retailers. Disposable income is
higher these days, allowing
Economic
people to spend more frivolously
factors have a
significant on luxurious items and
impact on how entertainment — plenty of both
an organization found on Amazon.
does business APPLE:
and also how Stagnating middle-class incomes
profitable they in some developed countries,
are. Factors including the United States, could
include – shrink the potential market for
economic higher-end consumer goods such
growth, interest as those marketed by Apple.
rates, exchange Increase in labor cost in china can
rates, inflation, also take the lower cost
disposable advantage.
income of FACEBOOK:
consumers and
Increase in disposable income of
businesses
some countries.
GOOGLE:
Google has accumulated huge
amount of cash that can be
inflated.
A sudden drop in Google’s high
stock price could hurt the
company by reducing its market
capitalization.
Social Factors AMAZON:
With amazon it has become easy
to see hundreds of products at
home without even driving to
market and that is what
consumers wants. But Amazon is
negatively affecting the public’s
health like obesity is increasing
because people can do shopping
by sitting at home. They don’t
bother to go and purchase
products.
APPLE:
Consumers in those markets and
younger people in Apple’s
established markets, such as the
United States, have strong
Also known as
socio-cultural emotional attachment to Apple
factors, are the products that drive sales.
areas that There is rising use of mobile
involve the phones and social media that is
shared belief opportunity for Apple to expand
and attitudes of their business.
the population. FACEBOOK:
These factors The audience of Facebook is
include – diverse in age and interests, it
population includes teenagers and scientists,
growth, age celebrities and politicians.
distribution, As far as Facebook privacy is
health concerned so it is no so much
consciousness, private and people are very
career attitudes
concerned about their privacy.
So that is why some of the people
are hesitant to use Facebook.
GOOGLE:
New social trends and changing
demographic patterns can be
favorable or unfavorable for
Google’s business. Increase in use
of social media is a threat to
google. On the other hand,
increased use of virtual teams
and other trends like
telecommuting have also led to
increased use of Google apps and
services. There is distrust of the
people on the information
provided by Google.
For health issue, Amazon
should open some physical
retail stores so that people
can go and choose their
products and afterwards
they can order online. This
will not make them lazy.
The growing use of Apple
product is an opportunity
for Apple to launch their
products in areas where
people are unfamiliar with
the Apple products like
Africa. They can capture
the market by introducing
low price phones and other
Apple products.
For privacy issues Facebook
should focus on reducing
people’s concern for
privacy by making
Facebook account more
private.
Google should provide the
information that is more
authentic so that people
can trust them easily.
Google can purchase
interest
Or shares in competitors’
company so that through
partnership they can
eliminate threats.
Technological Factors AMAZON: These all companies are
Amazon is a technological technology based so they
company, so these factors can should invest in R&D and
greatly impact their profits. They introduce innovative
rely heavily on varying degrees of products and services to
technology to distribute their keep themselves ahead of
products to customers. They’re their competitors.
experimenting with new and
creative ways for customers to
Technological receive their packages. Like drone
factors affect delivery.
organizations APPLE:
and the
Apple is also a technological
management
thereof in three company so this factor can
distinct ways: greatly affect apple company.
 New Cloud computing trend.
ways of Technological integration.
producing Growing apps market.
goods and FACEBOOK:
services Considering this business
 New
founded on technology this factor
ways of
distributing has major influence on facebook.
goods and Increasing use of mobile devices.
services Increasing number of online
 New social media companies.
ways of Diversification of online retail
communicat firms.
ing with GOOGLE:
target
Some competitors; notably
markets
Amazon and Microsoft, have
devised search algorithms that
are as popular and effective as
Google’s. Amazon has been able
to dominate shopping research
with its solution. There is a strong
possibility that a competitor
could devise a better search
solution than Google’s at some
point

Environmental and Legal factors Effect on performance of There is no such much

legal factors. include: health companies. impact of Legal and
and safety, equal The health protection rules environmental factors on
opportunities, AMAZON, APPLE,
advertising and regulations in different
FACEBOOK and GOOGLE.
standards, countries.
So it should not be more
 consumer rights Environmental concerns from focused on making counter
and laws, consumers including concerns strategies for these factors.
product for the packaging and
labelling and
product safety. recycling.
Increased attention directed
towards Corporate social
responsibility.
Legal factor:
Changing nature of regulation.
Changing different
international markets.
Changing rules and regulations
of industry of Europe.

2. Analyze the changing industry structure in which EACH Company is operating by using
Porter’s Five Forces Model. How did Company counter the changes and challenges of the
industry competitive forces in which Company is operating by using Porter’s Five Forces
Model?
Porter five Apple Amazon Facebook Google
forces
Threat of Low High Low Low
substitute Offer Low switching Its unique The image of
products convenience to costs. features makes it being most
customers  High availability more attractive famous search
engine that
of substitutes.
keeps the
 Low cost of
substitute away.
substitutes.
Reasons:
 Amazon
continually
addresses the
strong force of
substitutes,
which threaten
the e-
commerce
company’s
performance.

 The high
availability of
substitutes and
 the low costs of
their product
offerings
further
increase the
influence of
substitutes
against the
company.

Threat of new Low Low Moderate Low

entrants Easy to create  Low switching The growing Moderate cost
an online retail costs. trend attracts of doing
store but  High cost of new potential business.
difficult to reach entrants to grab High cost of
brand
at Amazon’s the market and brand
development.
level have a chance to development.
Well established  High earn profits. Google has
and have first economies of captured the
mover scale. market by
advantage Reasons: investing heavily
which will keep  Amazon’s on search engine
the entrants consumers can business so it is
away however easily transfer hard for
the low to new firms, potential
entrance cost thereby entrants to think
may encourage about getting a
empowering
them. piece of pie from
new firms to
google
impose a
strong force
against the
company. This
condition is
due to low
switching costs,
or the low
negative effects
of transferring
from one
provider to
another.

 The high cost

of brand
development in
 online retail
weakens the
influence of
new entrants
on the
performance of
Amazon. For
example, it
would take
years and
billions of
dollars to
create a strong
brand that
directly
competes with
the Amazon
brand.

 Amazon
benefits from
high economies
of scale that
make its e-
commerce
business
strong. As such,
new entrants
need to
achieve
similarly high
economies of
scale to
compete
against the
company.
Bargaining Low Low Low Low
power of As it offers  Small Its suppliers are High availability
suppliers diversified population of advertisers that of suppliers and
products that suppliers. provide benefit large population
show less  Low forward to them. of suppliers.
dependency on Its diversified
integration.
the suppliers. portfolio of
 Small size of suppliers and
suppliers.
Reasons: services keep
 The small the suppliers
population stuck with it.
empowers
suppliers to
impose a
strong force on
Amazon.com
Inc.’s e-
commerce
business. For
example,
changes in
prices of
equipment
from a small
number of
large suppliers
could directly
impact the
company’s
online retail
operational
costs. 

 Moderate
forward
integration
equates to a
moderate
degree of
control that
suppliers have
in the sale of
their products
to firms like
Amazon.

 The moderate
size of most
equipment
manufacturers
limits their
influence on
 the company.
Bargaining Low High Low Moderate
power of It offers variety  High quality of It continues to Small size of
buyers and information. invest in R&D individual
convenience at  Low switching that can increase buyers.
low price their capabilities High and
costs.
increasing
 High availability
demand for
of substitutes buyers
Reasons: Moderate
 Consumers quality of
have access to information
high quality The customers
information feel more
regarding the convenient in
services of using google
online retailers search engine
however other
and the
options from
products they
competitors may
sell. The ability attract by
of customers to offering
find something
alternatives to unique.
Amazon’s
online retail
service can
affect Amazon.

 The low
switching costs
make it easy for
consumers to
transfer from
Amazon to
other firms,
such as Wal-
Mart.

 The high
availability of
substitutes
further
empowers
consumers to
shift from one
 retailer to
another. For
example,
instead of
purchasing on
Amazon’s e-
commerce
website, a
customer can
easily go to one
of Wal-Mart’s
stores.

Intensity of Moderate High High High

competitive There are less  High It is High diversity of
rivalry direct aggressiveness recommended firms.
competitors and of firms. that facebook Low switching
they are market  High availability must diversify its costs
leader that will business to The technology
of substitutes.
sustain the minimize the risk invites
competitive  Low switching while exploiting innovation and
rivalry low costs. the additional as having
Reasons: sources of diversified set of
 Retail firms are revenue to keep services so it
generally the organization faces huge
aggressive, and growing competition to
they exert a sustain the
strong market.
competitive
force against
each other. For
example,
Amazon.com
Inc. directly
competes
against giants
like Wal-Mart,
which has a
significant and
expanding e-
commerce
website.
 Amazon also
experiences
the strong
 force of
substitutes
because of
their high
availability. For
instance, Wal-
Mart’s physical
or brick-and-
mortar stores
are substitutes
to Amazon’s
online retail
service.

 Low switching
costs
correspond to
low barriers for
consumers to
transfer from
one retailer to
another, or
from one
company to a
substitute
provider.
3. You are also advised to conduct a strength, weaknesses, opportunities and threats (SWOT)
analysis for EACH Company and provide strategic suggestions based on analysis.
AMAZON:
SWOT
IDENTIFY
REASONS
Strengths
Strong brand.

Extensive product mix.

Highest revenues in the industry.

Amazon.com Inc. has the strongest brand in the online retail market. This strength is partly
responsible for the rapid growth of the business in its early years.
An extensive product mix makes it easy for customers to find what they need or want on the
company’s website, fulfilling Amazon’s vision statement and mission statement. This strength
supports service attractiveness, which is crucial in maintaining the firm’s success.
Having the highest revenues in the industry is one of Amazon’s strengths. For example, it
enables the company to invest in new business ventures or in new product development.
Weaknesses
Easily imitable business model.

Limited penetration in developing markets.

Limited brick-and-mortar presence.

Amazon.com Inc. has a business model that others can easily imitate. For example, other firms
could easily establish an online retail website that sells just about anything.
Amazon generates most of its revenues from developed countries, such as the United States.
When other firms become fully established in developing markets, it would be difficult for
Amazon to penetrate and compete in such markets.
The company’s limited brick-and-mortar presence also limits the ability to attract customers to
certain product types that are more sellable in physical stores than in online stores.
Opportunities
Penetrate developing markets.

Expand brick-and-mortar business.

Boost measures to reduce forged sales.

Amazon has the opportunity to penetrate developing markets. This move should establish the
company’s presence before other large online retail firms take root, thereby giving Amazon the
advantage of a stronger competitive edge.
The company also has the opportunity to open more brick-and-mortar stores to improve
competitiveness against large retailers with significant brick-and-mortar presence, such as Wal-
Mart.
One of the issues facing Amazon.com Inc.’s e-commerce website is the continuing sale of
counterfeit items, which are generally against customer expectations. This condition presents an
opportunity for the company to improve its technological measures and organizational policies
to address forged sales. For example, an automated process for consumer reports and product
evaluation could help reduce the amount of counterfeit products sold on the website.
Threats
Cybercrime.

Imitation.

Aggressive competition with large retail firms

Cybercrime threatens practically every online retail company. Amazon must keep stringent
measures to counteract cybercrime attacks against its online operations. For example, the
company must intensify its network security efforts.
Amazon.com Inc. faces the issue of imitation, considering that its business model is easily
imitable. The materialization of this threat could reduce the company’s market share.
Aggressive competition is an issue against Amazon. Large retail firms, such as Wal-Mart, are
continuing their efforts in improving their online retail presence.
FACEBOOK:

SWOT
IDENTIFY
REASONS

Strengths
Strong brand image.

Large consumer base with externalities.

High revenues.

Innovative workforce.
1. Facebook Inc.’s social network’s popularity comes with a strong brand image, which is
considered as strength in the context of this SWOT analysis. The company develops its business
as a reliable social media service provider.

2.

3. The company’s large consumer base is a strength that brings a number of beneficial
externalities. For example, the large number of users or members makes Facebook’s social
networking website and mobile apps more attractive to potential new members, more
attractive to advertisers, and more difficult for new social media companies to compete with.

4.

5. High revenues are a beneficial internal strategic factor that supports the company’s
financial capacity for research and development (R&D) investments for new products and new
business ventures.

6.

7. Facebook’s organizational culture contributes to innovativeness in the workforce. This

internal factor enables product development, which is a growth strategy.

Facebook’s
Imitable products and services.

Negative impacts of online advertising on user experience.

Low diversification of business.

Facebook’s social networking website, mobile apps, and related services are imitable in terms of
basic features. This SWOT analysis considers such internal strategic factor a weakness because it
makes the company vulnerable to competition. For example, other companies can develop their
social networking services to directly compete against Facebook Inc.

The company’s online advertising mechanism is a weakness because users could perceive
advertisements as a nuisance in their social media experience.

In addition, the corporation suffers from a low level of diversification, which maximizes market
risk exposure. With low diversification, the vast majority of the company’s earnings are
generated through its social networking website and related mobile apps.

Opportunities
Business diversification.

Product innovation.
Market penetration and development
Facebook Inc. has the opportunity to diversify outside its core social media and online
advertising business. The company has taken steps to exploit this external factor. For example,
the company acquired Oculus VR, which is a virtual reality technology business that can
complement social networking services. However, this SWOT analysis points to the need for
further diversification to reduce Facebook’s business risk exposure.

Another opportunity is for the organization to innovate products that are complementary to its
social networking website and mobile apps. Furthermore, market penetration and development
can increase membership and revenues, in line with Facebook Inc.’s generic competitive
strategy and intensive growth strategies. This element of the SWOT analysis indicates the need
for the company to reform some of its strategies and management direction to ensure
continuous growth.

Threats
Imitation.

Cybercrime.

Market saturation.
Imitation is one of the major threats to the business, considering that other firms could develop
social networking websites and mobile apps similar to those of Facebook. In this SWOT analysis,
imitation is a threat because it has the potential to reduce the company’s market share.

With increasing membership, the company is now an attractive cybercrime target. This external
strategic factor can negatively impact user experience and, consequently, business
performance.

The market is increasingly saturated, as pointed out in the PESTEL/PESTLE analysis of Facebook
Inc. Market saturation could lead to business growth plateau or stagnation.
SWOT
IDENTIFY
Google’s Strengths
Strong brand image.
Patented proprietary products.
Diversified business.
Large organizational size.
Google’s Weaknesses
Dependence on the Internet.
Minimal physical presence.
Opportunities for Google
Tap more mobile users.
Expand Google Fiber.
Penetrate markets with consumer electronics.
Threats Facing Google
Tough competition.
Imitation of some products.
APPLE:
SWOT
Strengths
Weaknesses
IDENTIFY
Strong brand image.
High profit margins.
Effective rapid innovation
processes
Limited distribution network.
High selling prices.
Dependence of sales on high-end carefully selects the authorized se
market segments.
REASON
Apple is one of the most valuabl
world. In the context of this SW
capable of introducing profitable
strong brand image.
In addition, Apple’s marketing m
pricing strategy, which comes w
internal strategic factor is a major
profits, even when sales volume
generic competitive strategy and
Apple Inc. involve effective rapid
business to keep abreast with the
competitive advantages.
Apple Inc. has a limited distribu
company’s policy of exclusivity.
analysis framework considers this
that limits market reach. Th
exclusivity’s advantages, such as
distribution of products.
In addition, because of its premiu
company has the weakness of the
end market segments. High prices

Opportunities for Apple Inc.
Threats Facing Apple Inc.
Expansion of the distribution
network
Higher sales volumes based on
rising demand
Development of new product
lines
Aggressive competition.
Imitation
Rising labor cost in various
countries
middle- and high-income brackets
from low-income brackets to easily
products. This internal strategic fa
weakness because high-end marke
minority of the global market.
Apple Inc. has the opportunity to e
network. Such opportunity directly
the company’s limited distribution
emphasizes the need for the comp
strategy. An expanded distribution
more customers in the global mark
In relation, the company has the o
volumes through aggressive marke
products. This opportunity is linke
mobile access.
Furthermore, the company has the
product lines. Its current product l
However, with further innovation,
introduce new products, like what
the Apple Watch. Developing new
business growth in the internation
Tough competition in the industry
aggressiveness of firms. Apple com
Samsung, which also uses rapid in
SWOT analysis, aggressive competi
Apple Inc. Because of the aggressi
firms, it is necessary to have stron
maintaining competitive advantag
faces the threat of imitation. This t
the large number of local and mul
the design and features of Apple’s
labor costs involving contract man
China, reduce profit margins or pu
4. Who are Company’s competitors?
 Google:
Yahoo
 MSM
 Ask
 AOL

Facebook:
 Snapchat
 Twitter

Apple:
 Samsung
 Huawei
 LG
 AT&T

Amazon:
 Ali baba
 Wal-mart’

5. How does competitive rivalry, competitive behavior, and competitive dynamics effect
Company?
Among firms as they maneuver for an advantageous market position. These companies were
competing almost the same sector of digital market and they were competing to get the larger
portions of market of each sector like Google and Apple were competing in Mobile Apps market. But
the IOS were most popular in US market and most people used to access the mobile web.
Competitive Behavior is the set of competitive actions and competitive responses the firm takes to
build or defend its competitive advantages and to improve its market position. These companies
made strategies to eliminate competitors and get the strong market position. Like Google who spent
too much to improve it online advertisement sector and it got the success in it. Although Facebook
didn’t` get attract too much it had no significant presence in the $1billion US paid search market.
Where Google earned $12 billion. In other hand, FACEBOOK gave the tough time to Google in social
media site.
 Competitive Dynamics refer to all competitive behaviors that is the total set of actions and
responses taken by all firms competing within a market. By doing the competitive rivalry and
competitive behavior these got the dominancy in particular sector of digital market. Google became
the market leader in online advertising. Amazon became market leader in online retailing. Apple led
the market hardware and mobile’s apps and Facebook became market leader in social engagement.

6. What Describe Company Business strategy?

AMAZON Business Strategy-- Cost leadership & customer centricity
 Regularly entering into new niches and segments
 Strengthening Amazon ecosystem
 Uncompromised focus towards customer service
 Focusing on Amazon leadership values

GOOGLE Business Strategy

 Business diversification and introduction of new products and services in a regular
manner.
 Business acquisitions.
 Profit maximization through creation of a closed eco-system

FACEBOOK Business Strategy

 Extensive and continuous focus on user experience.
 Facebook business strategy focuses on establishing presence in various branches of
e-commerce via acquiring relevant businesses.
 Development of new products and services is placed at the core of Facebook
business strategy with positive implications on the numbers of its user base.
 Facebook constantly experiments with different strategies finding and utilizing news
ways of monetization in a regular manner.
Apple Business Strategy – Product Differentiation in Design and Functionality
 Apple business strategy can be classified as product differentiation in design and
functionality.
 Apple business strategy also includes “building and expanding its own retail and
online stores and its third-party distribution network.
 Apple “continues to expand its platform for the discovery and delivery of third-party
digital content and applications through the iTunes Store”.
 An intensive international market expansion is another important aspect of Apple
business strategy.
 Case Conceptual Questions
7. What are the Strengths and weakness for the platform advertisement (group only) of Amazon,
Apple, Facebook and Google.?

Ans:
Strengths:

 Online advertise reduces costs

 People are spending a lot of time on these sites so it is good way to reach them through online
 It is not feasible to advertise only locally but it also reach internationally.
 Strong market position
 Growing economy
 Google has acquired advertisement business in 2003 and introduce AdSense
 Amazon introduce the advertisement sleeping giant model
 Google bought double click the online ad serving program.
 Facebook is the platform people of all ages spend the most time on

Weaknesses:

 Google was Dependent on the advertisement revenue

 Amazon only doing advertisement of those products which are in demand or which they sale
rather than those products which are in low demand or in no demand and may generate little
revenue.
 Facebook was slower to attract online advertisers than Google.
 Facebook spend 16 billion to boost up advertisement but at the end it wasted.
 Amazon is single-channel retail
 (Shipping costs) Amazon received $3.1 billion in shipping fees and spent $6.6 billion on delivery.

8. What are the Key success factors for the platform advertisement group only of Amazon, Apple,
Facebook and Google?
Ans:

AMAZON:

 It starts from selling books online but after sometime other products would added also it means
they have diversified.
 Charging low prices
 Investment in Headline Search Ads and Sponsored Products.

APPLE:
 The launch of iPhone and iPad, the devices’ integration with the Internet.
 Apple led Google in mobile e-commerce access. iOS, Apple’s mobile operating system, was the
system that most people in the U.S. used to access the mobile Web.
 Amazon and Target received almost 10% of their traffic from mobile devices, and iOS sent
substantially more traffic than did the Android system.
 Apple’s combination of iTunes and iPad. While the Kindle was optimized for books, the iPad wasa
good-enough solution to a broader range of digital content.
  In the battle with Google for search, Siri, Apple’s voice-activated search tool, posed a challenge.
 In smartphone applications (apps) played an important role in online marketing.
 Apple also led the market in customized apps or combine content stored on the user’s device
with Internet resources to manage interactions with a wide variety of commercial services such
as banking, travel, shopping, local information, news, video, sports, blogs, games, social media,
maps, and music.
GOOGLE:
 Google expansion through acquisition, by adding more different advertising channels like
YouTube, a video storage and distribution site that earn revenue from advertising.
 Introducing premium content channels, a move that began to position YouTube as a competitor
to cable television.
 Improving ad-serving efficiency by acquiring DoubleClick, the dominant online ad-serving
platform and AdMob, the dominant server of ads to mobile devices.
 Acquiring ITA, whose software searched for airline seats, Google began in 2011 to serve up a
matrix of flight and fare information to flyers, and it received an affiliate fee from travel websites
when people clicked to book flights.
 Launching of the Android mobile-phone operating system. Googlemade its largest-ever
acquisition of Motorola Mobility, a manufacturer ofmobile handsets. This purchase allowed
Google to build phones as proof of concept for the Androidoperating system.
 The company launched Google Play, an online music-storage and purchasing service with
functionality similar to elements of iTunes.
 It also launched Google Wallet, which allowed the smartphone to be used as a payment system.
 It began working with retailers to offer a service competitive with Amazon to find customers
through search.
 It launched Google+, a social network integrated with its search, photo, and video offerings.


FACEBOOK:
 Huge number of online users on Facebook, almost 153 million accounting for nearly three
quarters of all those who went online.
 The average Facebook visitor spent 6 hours and 41 minutes on the site per month.
 Its performance was well in display-advertising sector, where it was expected to generate $2.2
billion in 2012, compared to Google’s $2.3 billion.
 Facebook offered a service on its mobile app that enabled users to discover local offline
businesses through the experience of their friends.
 Facebook’s Gifts service was viewed by some as a beachhead into e-commerce. The back-end
infrastructure to support gift transactions could as easily support buying for Facebook members
themselves.
 The “like” button on the brand or celebrity’s Facebook page. Advertisers could buy the right to
advertise on the pages of friends of a fan with a tag showing the name of the fan.
 Facebook’s launch of Facebook Exchange, an ad-bidding and retargeting network, with tracking
cookie system for members of Facebook Exchange.

9. Describe each Amazon, Apple, Facebook and Google platform advertisement group only strategy?
 Facebook:
Their advertisement strategy is to create demand for the product like Facebook. Ads are the great
way to generate awareness and interest for the product. If people don’t know you exist, they must
not be interested in what you sell and thus they won’t be searching for your product. Facebook
enables you to advertise to people who aren’t necessarily searching for your product. They’re
minding their own business, looking at cat videos and kid photos on Facebook and happen to see
your ad when it passes through the news stream. Facebook is about brand awareness.
Google:
They have a pull marketing strategy. Ad Words help you find new customers. Google searchers are
specifically looking for something. When it comes to Google, searchers are on a mission. They’re
looking for something specific and want to find what they are searching for. Google Ad Words is the
world’s largest and most popular PPC advertising platform. AdWords is so widely used, it has become
synonymous with the term “paid search”. Paid search focuses on the targeting of keywords and the
use of text-based advertisements. Advertising using AdWords bid on keywords – specific words and
phrases included in search queries entered by Google users- in the hopes that their ads will be
displayed alongside search results for these queries. Each time a click on an ad, the advertiser is
charged a certain amount, hence the name “pay per click advertising”.
Amazon:
Marketing and advertising on behalf of its suppliers had long been elements of Amazon’s business
model, a collaborative filtering tool, for example would tell customers who bought x and bought y
but in 2011, amazon launch an advertising network that in 2012 AsWeek describe as advertising’s
sleep giant. A visitor browsing on amazon interest in a product, but failing too but, would be tagged
with a tracking cookie on their browser.
Apple:
Apple’s marketing and advertising strategy is to do on the Public company that led in mobile e-
commerce. So they should control of access to e-commerce by combination of I-tunes and I-Pad
against Amazon’s kindle platform and they are more focused towards Smartphone applications.

10. How are these similar or different from each other?

Similarities:

•Each one wants to be the market leader in e commerce and advertising.

•Each company has to attract same customers that are online users.

•Each company has online business model.

Differences:

•Every giant is competing through different products and services.

•Google dominated the search engine advertising through dominance in search capabilities and
controlled almost all the mobile search advertising market.

•Amazon was the largest player in online retailing.

•Apple competed through customized apps and iOS mobile operating system, while Google Android
operating system was the major competitor of Apple.

•Facebook offered a service on its mobile app that enabled users to discover localoffline businesses
through the experience of their friends.

•Facebook launched its Facebook Exchange, an ad-bidding and retargeting network. Members of the
Facebook Exchange network of websites could place tracking cookies on thebrowsers of their site
visitors, and, for those visitors who were Facebook members, Facebook wouldcontract to serve
advertising to them when they logged in to Facebook.

•Google and Facebook are focusing more on online advertising.

•Amazon, Apple, and Google are putting efforts in retailing of digital content.

11. What is and how does competitive rivalry, competitive behavior, and competitive dynamics effect
Amazon, Apple, Facebook and Google

Competitive Rivalry is the ongoing set of competitive actions and competitive responses that occur
among firms as they maneuver for an advantageous market position. These companies were competing
almost the same sector of digital market and they were competing to get the larger portions of market of
each sector like Google and Apple were competing in Mobile Apps market. But the IOS were most
popular in US market and most people used to access the mobile web.

Competitive Behavior is the set of competitive actions and competitive responses the firm takes to build
or defend its competitive advantages and to improve its market position. These companies made
strategies to eliminate competitors and get the strong market position. Like Google who spent too much
to improve it online advertisement sector and it got the success in it. Although Facebook didn’t` get
attract too much it had no significant presence in the $1billion US paid search market. Where Google
earned $12 billion. In other hand, FACEBOOK gave the tough time to Google in social media site.

Competitive Dynamics refer to all competitive behaviors that is the total set of actions and responses
taken by all firms competing within a market. By doing the competitive rivalry and competitive behavior
these got the dominancy in particular sector of digital market. Google became the market leader in
online advertising. Amazon became market leader in online retailing. Apple led the market hardware and
mobile’s apps and Facebook became market leader in social engagement.

12. What is market commonality? What is resource similarity? of Amazon, Apple, Facebook and Google

Market commonality has to do with the number of different markets that the firms and the competitors
are jointly involved with. When competitors produces same products and compete for same customers
then competitive rivalry is likely to be high.
Resource similarity is the extent to which the firm’s tangible and intangible resources are comparable to
the competitor’s in terms of both type and amount.
All these firms were competing with each other in many market sectors like google and Facebook were
competing in online advertisement. Google, Apple and Amazon were competing in retailing of digital
content. Google, apple and amazon were competing in digital television and google and apple were
competing in the payment and banking system.
They were using different resources (hardware and software) for different segments which helped them
to get strong market position.

13. What does it mean to say that these concepts are the building blocks for a competitor analysis?

They are said to be the building blocks because the Google, Amazon, Facebook and apple has intensive
competitive at that time. They should have sustained their competitive advantage through the building
blocks through focusing on innovation, efficiency, and quality and customer responsiveness. Because all
these concepts like SWOT analysis, potter’s five forces model, PESTEL analysis, market commonality,
resources similarity and market cycles are fundamental to understand the industry.

14. How do awareness, motivation, and ability affect their competitive behavior?
 Awareness: Before taking any competitive action or response it is important for any
firm to recognize the degree of their mutual interdependence that result from market
commonality and resource similarity. It tends to be greatest when firms have highly
similar resources to use while competing against each other in multiple markets. It
helps firms to understand the result of its competitive action or response. A lack of
awareness can lead the firm’s excessive competition resulting the negative effect on all
competitor’s performance.
 Motivation: It is concerned with the firm’s reason to take the action or to response to
competitor’s attack. A firm may be aware of competitors but may not be motivated to
engage in rivalry with them if it perceives that its position will not improve or that its
market position won’t be damaged if it does not respond.
 Ability: It relates to each firm’s resources and the flexibility they provide. Without
available resources (tangible and intangible), the firm lacks the ability to attack a
competitor or respond to its actions.

15. What factors affects the likelihood these case companies will initiate a competitive response to the
action taken by a competitor?

The type of competitive action (strategic or tactical) the firm took, the competitor’s reputation for the
nature of its competition behavior and its dependence on the market in which the action was taken are
studied to predict a competitor’s response to the firm’s action. Competitor respond more frequently to
the actions taken by the firm with a reputation for predictable and understandable competitive behavior
especially if that firm is a market leader. In most cases the firm can anticipate that when its competitors
is highly dependent for its revenue and profitability in the market in which the firm took a competitive
action that competitor is likely to launch a strong response. However, the firms that are more diversified
across the market are less likely to respond to particular action that affects only one of the markets in
which they compete by a competitor.

To predict how a competitor is likely to respond to competitive actions, firms should consider:
 Market commonality and resource similarity
 Awareness, motivation and ability
 Type of competitive action, reputation and market dependence
16. What competitive dynamics can be expected among firms competing in slow-cycle markets? In fast-
cycle markets? In standard-cycle markets?

Competitive dynamics:

The total set of actions and responses of all firms competing within a market.

Slow-Cycle Markets:

Markets in which the firms’ competitive advantages are shielded from imitation for long periods of time
and in which imitation is costly. Build a one-of-a-kind competitive advantage which creates sustainability.
Once a propriety advantage is developed, competitive behavior should be oriented to protecting,
maintaining and extending that advantage.

Fast-Cycle Markets:

Markets in which the firms’ capabilities that contribute to competitive advantage are not shielded from
imitation and where imitation is often rapid and inexpensive, competitive advantages are not sustainable
in fast-cycle markets.

Standard-Cycle Markets:

Markets where firm’s competitive advantages are moderately shielded from imitation and where
imitation is moderately costly. Competitive advantages partially sustained as quality is continuously
upgraded, seek to serve many customers and gain a large market share, gain brand loyalty through brand
name. Careful operational control/ manage a consistent experience for the customer.

17. Which cycle markets of the case companies?

All these companies were operating in slow cycle market, they were technology base companies which
used differentiating as a competitive tool. For differentiation, they mostly focus on new innovation ideas
and unique products. For this they highly invest in R & D and to acquiring new technology and this is too
much costly and difficult to imitate.

Case learning Questions

Issues and analysis of situation for practical alternate solutions of problems, decisions required with
implementation plan and likely outcomes

18. What are the key issues?

(Tips: identify why the problem/opportunity occurred
Immediate: What are the immediate tasks that need to be done?
What are the immediate decisions that need to be made?
Basic: How are these immediate issues relevant to the basic issues of everyday business?
Importance: Are these tasks/decisions urgent, important, or both?
Something that’s very urgent and highly important takes timing precedence over something that’s
highly important but not urgent.)
 Key issues:
 The share of the retail market is only 5% share of the total market
 As advertisement expenditure develops E-commerce and internet market increases.
 They are not orderly division of the spoils of market making among the four the each hoped
to be the one to claim digital marketing’s soul fighting skirmishes on sector boundaries as
well as in new sectors.
 These all companies are competing for digital marketing dominance rather than making
collaboration to gain combat market share.
 Don’t explore the market properly because they are more focused on the advertising.They
underestimate that only 26% of Americans spend time offline yet the advertisers spent only
20% of media budget online.
 Offline broadcasting cost are increasing (almost $174 billion) annually and additional $169
billion on direct marketing and advertisement in comparison to online advertisement which
was $37 billion.

19. Which cycle markets of the case companies?

(Tips: What analysis do we need to do to understand the issues and the choices we’ll need to make?
identify what’s required by way of analysis, conceptual understanding to recognize the time
constraints managers face )

All these companies were operating in fast cycle market. They were technology based companies
that used differentiation as a competitive tool. For differentiation, they mostly focus on new
innovative ideas, and unique products. For this, they highly invest in R&D and acquire new
technology though it was too costly and difficult to imitate.

20. Exploration of various alternatives and effect in decision-making

(Tips: Here you list all the possible actions to take to resolve the problem
Generally, there are only a few really viable alternatives. You might want to limit your list of viable
alternatives to three.)

 Online campaigns and promotional activities to get customers involved more and more online
and to make a way to grow online advertisement through this.
 These companies must consult with professional advertisement agencies to make their platforms
much more user-friendly and to consult them about engaging customers to remain at the
website for longer period through free products and major events may be helpful in engaging
them.
 These are tech giant companies with large banks of resources in their vaults. They can use them
to get CPM lower than offline advertisements for sponsors so they could have a provision to
make their transition towards online advertisement.
 Make alliance to compete the offline advertisement by charging low CPM.
 Invest in Research and Expenditure, and diversify their business.

21. Choosing the best alternative and your recommendations for Preferred Outcome:
(Tips: Here you choose what you’d do in this situation
You can also predict the consequences of your actions, both quantitative and qualitative
 A good decision will meet what criteria? List both quantitative and qualitative criteria)

 We can see that Google take role in every segment of battle. It’s a good step to make their
company bigger but Google should also maintained their lead position in search engine sector by
innovation and technology.
 Apple, Amazon, and Facebook has their own leading sector. As Google keep continue acquisition
to take share on rivals 3 markets, they should find strategy to fight Google rivalry.
 Marketing firms court the favors of social-commerce platforms.
 Self-sufficient marketing systems of online merchants like Amazon let other merchants by pass
the tolls will help them grow.

22. It’s the basic question? How to do it – what to do when, or timing of Action/implementation Plan
How are you going to take action?
(Tips: Consider who will do what, when, where, and how
Often useful to provide a timeline for implementation of action plus monitoring and control)

They need to change their strategy and they should focus on in the paid search advertising market
that is it could optimize its search bar as a form of a search engine and filter out searches with
commercial phrases or any that are related to particular businesses. They have to run a campaign to
increase awareness of the online world among the consumers. This campaign will also create hype
that online platforms are on the move to turn the media consumption i.e.Apple and social
interaction that is Facebook retail (Amazon) and search services Google to the next prospect. Price
promotions would be the part of this campaign but would be exclusive for advertisement sponsors
to create a trust among them of the online advertising and to make them divert them from offline to
online with comfort and gratification. Given that Facebook is such a powerful tool with a significant
amount of daily users, the searches made on their platforms could potentially be more personal and
specific to their needs. In turn, advertisers should be able to advertise on users newsfeeds (or other
platforms) and pay per click based on the data they are being given.