Reply to the four discussions
1. Is the concept of industry useful for a diversified firm like Amazon.com with a complex set of competitors? Explain.
The concept of industry, usually means that the industries are categorized by the goods and services they produce. Britannica notes, industry as a group of productive enterprises or organizations that produce or supply goods, services, or sources of income. In economics, industries are generally classified as primary, secondary, tertiary, and quaternary; secondary industries are further classified as heavy and light. In terms of Amazon.com, being a global retail industry giant or even eCommerce retail titan, industry plays a huge role in the diversification of this firm. With so many different competitors and sectors of industry being included in their inventories, consumer base, and manufacturing, diversification is a must and can only be handled by exploring all facets of industry. By having a solid foundation in almost every industry from books, to gaming, to fresh grocery delivery, outperforming and out-convenienceing almost all of its competition, while keeping process low and consumer interest high, they are powering through almost every industry with their everything for everyone, reduced risk, diversity driven strategic plan.
Given the limitations of Porters five forces model, could one argue that strategists should largely ignore industry factors and focus instead on resources and competencies specific to a firm? Why or why not?
Porters Five Forces model itself is broken down into these five identifiers;
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
This model acts as a framework that individuals and businesses can use to analyze and classify characteristics of an industry and or like firms environment in comparison to external competitive factors, (Hbr, 2020). The five forces reveal why industry profitability is what it is. Only by understanding them can a company incorporate industry conditions into strategy. So, with that being said, ignoring industry factors is a guaranteed case of uncertainty and lack of strategy preparation. Though the limits of microeconomics and the assumptions of a perfect case scenario, the business analysis characteristics of a simple market, without flaws or worse case scenarios, and long term development or implications are present, and not universally favorable in a Porters Five Forces model, we need not disregard the power of a proper industry analysis in the formation and development of a firm or business. It is the proper evaluation of all of these strategies that make a firm a force to be reckoned with and not a single segment success. Having a multis strategy industry analysis, helps a firm to have a better sense of the companys position, find external factors that influence the competition, and help firms to better forecast and strategize for growth and overall create. the best chances at increasing market power and competitive advantage.
Britannica, T. Editors of Encyclopaedia (2022, October 21). industry. Encyclopedia Britannica. https://www.britannica.com/technology/industry
Parnell, J. (2018). Strategic Management: Theory and Practice, Sixth Edition (EBook) (6th ed.). Academic Media Solutions.
Porter, M. E. P. (2020, November 20). The Five Competitive Forces That Shape Strategy. Harvard Business Review. https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy
2. Q1. Is the concept of industry useful for a diversified firm like Amazon.com with a complex set of competitors? Explain.
Yes, the concept of an industry of diverse firms like Amazon.com with many competitors is very useful and beneficial as it makes the development of Amazon.com and its profit rise. A corporation can be diverse in multiple unconnected business sectors. Companies can diversify by starting a new business, fusing it with existing firms, or bringing enterprises into different industries or service sectors. One frequently occurring type of diversified company as it blended, and aligned can be characterized by Amazon’s multinational strategic plan with its modern utensils, and at the same time, Amazons goals can be steadfast. Distributing investments among and within different types of assets can also lower the risk. This is one of the greatest ways to brave companies’ ups and downs while keeping the improvement possible.
Amazon.com has generated the largest online retailer in the world in just half a decade. According to financial analysts anticipated, despite its extravagant sales, the leading participant in Business-to-consumer (B2C) online commerce is not expected to stop and Amazon has perpetually drawn attention as a firm ability to be better off its competitors. Therefore, customers can now enter their payment information only once for all financial transactions.
Q1b. Given the Limitations of Porters five forces model, could one argue that strategists should largely ignore industry factors and focus instead on resources and competencies specific to a firm? Why or why not?
Firstly, the limitation of the Composition: This is where Porters five forces solely focus on the facility of suppliers, the power of shoppers, substitution, and new competition. For example, technological evolution is one of the largest threats to all firms across all industries. Also, external forces like government policies, taxation policies, cross-border business risk, environmental impact, and others. Inaccessibility of Quantitative Dimensions where no inherent methodology to conduct the measurement of external factors. This tool doesnt offer a quantitative plan of the depth and impact of the 5 forces delineated. Impractical to use on massive firms practically is troublesome to use which can be an analytical framework for an organization that includes a gigantic product portfolio and operates in numerous market segments. This framework is supposed to investigate an organization during a single trade, and will be used as a starting line for the analysis Porters 5 forces may be an easy tool that contains 5 external factors which might be useful alternatively disadvantageous for an organization. This will be used solely as a tool to start the line of a deep investigation. This framework provides the initial understanding of the companys competitiveness alone in associate trade. This framework cant alone offer an in-depth investigation of the corporate. Not Applicable for All Industries Universally porters 5 forces cant be used for a few industries. According to Professor Thomas Stewart ” at Harvard Business School, Porter’s five forces as a kind of holistic way of looking at any industry and understanding the structural underlying drivers of profitability and competition. He as well makes a speech when interviewed that between the buyers and the suppliers, there are underlying drivers of each of those forces that the model really sort of unveils and can apply. As the five forces help you sharpen in on. For example, the Airlines Industry is well known for mediocre profitability and is among the least profitable industries known to man. In addition, the five forces allow us to very quickly understand why not-for-profit firms cant use this methodology for the analysis. Maybe a model that identifies and analyzes five competitive forces that form each business and helps verify an industrys weaknesses and strengths. As an analysis that is often accustomed to determine an industrys structure to work out company strategy.
References
https://www..Chegg.com
https://fortune.com/company/amazon-com/
Professor Thomas Stewart: Editor and Managing of the Harvard Business School.
3. Chapter 2 of the book, “How to talk so people listen,” written by Sonya Hamlin, speaks mainly about generational gaps in today’s workspace. What is very interesting about this chapter is that the author compares the three different generations, such as Baby Boomers (born from 1946 to 1960), Generation Xers (born from 1961 to 1978), and Generation Yers (born from 1978 to 2000). Moreover, this chapter points out interesting generational comparison factors based on family values, aspirations, cultural views, priorities, careers, and perception of time. These comparisons are even more fascinating because the book’s author explains how the media greatly influenced and shaped each generation’s values, preferences, and beliefs. For example, there are certain movies from the past that my dad or grandma love watching, and when I watched them for the first time, I found them socially insulting.
And this movie factor made me think that if any company today wishes to promote its products to me, my dad, and grandma, they would have to find a unique and individualized target approach to each of us based on our generational differences. But besides the generational differences, I started thinking if there is a marketing strategy that points out finding generational similarities.
The business magazine “Forbes” published an article titled “How environmental factors influence each generation,” which discusses different generational unique expectations, experiences, history, lifestyles, and values that influence their buying behaviors. Although, what captured my attention about this article is its conclusion, which states, ”Communicating with customers in different generations can be challenging. However, all generations appreciate honesty and authenticity. As environmental factors change, transparency and genuine interactions remain important to everyone.” This final statement made me comprehend that even if there are multiple generational differences, there are still some similarities, especially regarding the environmental factor. Thanks to these generational similarities, companies can use a common marketing strategy that would help to reach multiple targets instead of individual ones.
Sources:
Collins. (1970, January 1). How to talk so people listen : Sonya Hamlin : Free download, Borrow, and streaming. Internet Archive. Retrieved February 1, 2023, from https://archive.org/details/howtotalksopeopl00haml_1
Forbes Magazine. (2022, July 27). How environmental factors influence each generation. Forbes. Retrieved February 1, 2023, from https://books.forbes.com/author-articles/how-environmental-factors-influence-the-traits-of-each-generation/?device=c&network=x&keyword=&creative=&matchtype=&utm_channel_source=google%2Bads&utm_id=17427129337&utm_medium=cpc&utm_term=&utm_content=&placement=&adposition=&target=&utm_campaign=Leads-Performance%2BMax-JM&gclid=CjwKCAiAuOieBhAIEiwAgjCvcjrxcgRv7i-Y_W_lYfWIosoHEjulW8O0yZP0nOcbIKY2k3QuPWf5QhoC2WQQAvD_BwE
4. The generational factor has a significant impact on eMarketing as different generations have different preferences and behaviors when it comes to technology and the internet (LaFleur, 2022). Understanding these differences can help companies create effective marketing and communication plans that target specific generations. For example, baby boomers tend to be more skeptical of online advertisements and prefer more traditional forms of marketing, while millennials and Generation Z are more likely to use social media and rely on recommendations from their peers (Friesner, 2014). Knowing the preferences and behaviors of different generations can help companies create more targeted marketing campaigns and improve their overall marketing effectiveness. This information can also be used to select the most appropriate channels for communication, such as social media for younger generations and traditional media for older generations. Overall, taking into account the generational factor in eMarketing can help companies reach their target audience more effectively and improve the return on investment for their marketing efforts.
References
LaFleur, G. (2022). Generational Marketing explained: Everything You Need to Know. WhatIs.com. https://www.techtarget.com/whatis/feature/Generational-marketing-explained-Everything-you-need-to-know
Friesner, T. (2014). The Six Living Generations In America. Marketingteacher.com. https://www.marketingteacher.com/the-six-living-generations-in-america/
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