ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Business Strategy Analysis: Laziness Breeds Anti-Capitalism

Updated on May 9, 2013

Recently the US Congress debated the merits of requiring all internet firms that sell products to collect sales tax. The rationale behind this is to make e-commerce firms and physical firms play on a level playing field. A local morning radio talk show program recently debated this topic as well. A business owner called and stated that he needed this law and needed the government's help in order to remain competitive. This business owner claimed customers come into his store and state they could get products cheaper on the Internet and not have to pay sales tax. This statement by the business owner is what this article addresses. Anyone who understands basic business strategy will see the owner as being lazy and using the government to do something he himself should be doing.

Using Strategy Instead of Laziness

The belief that businesses cannot compete because of some situation and need the government's help is an all too common occurrence in society. Business owners claim the Internet firms are not fair and need the government to level the playing field. When Wal-Mart enters a new area, small business owners cry foul and cry to the government. When foreign companies compete with American firms, the American firms whine about not being able to stay competitive. These firms all want a government, whether local or national, to do something the firms should be doing for themselves -- remain competitive.

Strategy theory states there are three basic strategies: cost leadership, differentiation, and focus. These all are discussed in a previous article. In the case with the Internet competition, the low cost position has already been taken by an Internet firm. That leaves a differentiation strategy or a focus strategy for the physical firms. Thus, a firm facing competition such as this must change its strategy to one of these two.

How can the physical firm differentiate itself? The answer to this question would normally be answered in performing the SWOT analysis discussed in a previous article. However, to short cut the process one would simply ask, "What can the Internet firm not do?" Once this question is answered, a list of potential differentiation modes can be compiled. Some generic ones are listed below.

  1. One way a physical firm can differentiate itself from an Internet firm is personal, physical customer service. Such customer service could include demonstrations of the product and brief one-on-one instructions in the use of the product.
  2. Another method of differentiation could be physical training classes where a live teacher instructs customers in the use of a product and is available for questions. If the customer buys the product from the physical store, then the store will give them full or partial lessons free.
  3. The physical firm might market itself as working with the customer to determine the right product. This determination could include sizing, goal matching, and usage. The objective is not to allow the customer to purchase the wrong product.
  4. The physical firm can also market itself as being able to provide the customer the product immediately instead of the customer having to wait as with an Internet store. Immediacy has a certain appeal to some customers.
  5. Another way a physical firm can differentiate itself from an Internet firm is to partner with other physical firms to offer discounts or other incentives. The physical firms in a region could work together to motivate customers to purchase items at the physical stores.

This is not an exhaustive list but rather some ideas where physical firms can overcome any benefit the Internet firms have. There is one important axiom in business. Rarely can one firm capture the entire market. Thus, there will always be market share to obtain, the difficulty is in finding out how to do it which is the very essence of capitalism.

Summary

This article has looked at how a physical products firm can differentiate themselves from Internet firms and overcome the advantages that Internet firms may have. The answer lies in getting customers to notice the physical firm by using techniques that the Internet firms cannot match due to their electronic nature. However, this differentiation strategy requires some thought and some work. For some, it is much easier to take an anti-capitalist position and to get the government involved to take care of the "problem". Unfortunately for the non innovative firm, this never really solves the problem.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)