Gazellein 2012 free essay sample

Gazelle is a leading online market to purchase and sell used electronic devices. However, its legal name is â€Å"Second Rotation† but customers see it as â€Å"gazelle† which was chosen for branding and operational purpose by Gannet, Aurelien McElhiney the co founders of Second rotation. How did gazelle attain sustainable competitive advantage? The secret of Gazelle for attaining the sustainable competitive advantage (a competitive advantage that is difficult for competitors to imitate) lies in wisely considering the business opportunities at the right time. The co founders observed different practices made by the people i. e. they did not try to recycle or sell their electronic devices. Rather they would just leave using the device, which was not of any interest to them. Nevertheless, responsible consumption, financial crisis of 2007-9, space requirements to keep useless items and new product introduction did persuade people to either sell the device or recycle it. Gazelle was developed by keeping these factors in view. Since no other platform was present at that time to provide the facility of buying and selling the used products other than eBay, which itself was not much effective. Therefore, Ganot and cofounders took the advantage of that opportunity and provided the platform for such transactions. Gazelle from its origin has been very competent in doing the business as it took over a large magnitude of large retailers and local customers. With an easy access to the customers, it became famous in no time with heavy web traffic on its website. It was due to the skills of the management that it had almost 900000 viewers of website in 2012. Competitive Advantages: Gazelle has competitive advantage over other competitors in following attributes: -Listing process used by Gazelle is splendid as it specifies every thing related to the product. -Shipping logistics: An addition of a box to pack the goods in and pre-paid shipping charges are also an advantage over other competitors. -Dealing with pre- and post sale customer inquiries efficiently -Re-pricing consideration: if the product does not come out to be matching with the specifications and conditions mentioned by the seller, it is wisely re priced by Gazelle. -Price Arbitrage: Gazelle certainly have significant advantage of information regarding sellers and buyers. Therefore, it can draw sufficient margins from buying and selling prices. Strengths: Gazelle certainly had the strengths as it had a competitive advantage. Strengths of Gazelle are listed below. Variety of products: Gazelle offered a variety of electronic devices to customers with 22 categories of it. Customer obsessed culture: Gazelle has been customer oriented since its start, as it has been providing several facilities to buyers and sellers including a box offered to the seller to pack the goods in. Company Image: Gazelle has been very popular even in the initial years, as it had been providing quality service to customers. This resulted in creating a good image about the company in customers’ minds. Quality items: Quality of the product was kept in consideration while selling it to different buyers, as buyers seemed to be quite reluctant in buying used goods because of the possible defects present in them. However, Gazelle assured quality. Market share: Gazelle has an advantage of bigger market share compared to its competitors. Recent figures show that views of gazelle. com are almost thrice as that of its biggest competitor. Weaknesses: Gazelle lacks weaknesses in many regards but according to some reviews by customers gazelle sometimes took extra time while dispatching the goods and also in delivery of checks. Gazelle also had a weak image outside US. Opportunities: Gazelle has following opportunities from its external environment, which can lead it to better growth. New product introduction: New products keep coming in the market and people after using a product for short time switch to a newer one. This provides Gazelle an opportunity to grow. Intermediation: Ganot is currently thinking to switch the gazelle as an intermediary between sellers and buyer’s . This would get larger profits with minimum liabilities for gazelle. Social trends: Social trends keep changing but world has now started thinking about the environment critically. They do not waste the product. They either sell it or recycle it. This is an opportunity for Gazelle to make growth. Threats: With all the opportunities, available Gazelle indeed is threatened by external environment. Its rivals including eBay and others are a constant source of threat. Major threats include threat of imitation and the bargaining powers of sellers and buyers. Porter’s five forces model explains it at best. Internal Analysis: VRIO and gazelle: VRIO stand for valuable, rare, inimitable and organized respectively. While analyzing a company it kept in view to discuss VRIO. Gazelle has been offering valuable, rare, inimitable and organized goods at the same time, which led it to acquire sustainable competitive advantage. (See appendices) Economies of scale and scope: A company reaches economies of scale when cost incurred for the products gets lesser as the quantity of the goods increases. Economies of scope are related to acquiring lower costs when offering or producing a couple of products together. Gazelle in this regard attained both while selling and buying a large number and variety of used products. (See appendices) Attaining economies of scale internally has caused a difficulty for new rivals to compete against Gazelle. Moreover, Gazelle has developed product efficiency too which is attained by keeping the cost lower in long run. External Analysis: Porter’s five forces model: Porter five forces model explains all those forces which affect the organization externally. (See appendices) ? Threat of new entrants: There is possible threat of competitive entrants apart from current competitors. ? Threat of substitute services: There is a minimum threat that a new service evolutes in this industry. ? Bargaining power of buyers: With the presence of other service providers in the market, buyers might want the used products at lower prices. ? Bargaining power of sellers: Sellers may also want to sell their products at a higher price. ? Current rivalry: Current competition may become hard as the competitors grow in various aspects. But currently the rivalry is moderate because gazelle has a competitive advantage over other rivals. PEST Analysis: PEST stands for political, economic, social and technological factors respectively. (See appendices) Political: There is less political influence on the working of Gazelle but there might be a threat of more legislations and taxes in future. Economic: It refers to the interest rates, inflation rates etc. the economic factors of the region have now become stabled after the financial crisis of 2007-9. A recession season again may cause changes in the profitability of gazelle. Social: Social trends are becoming favorable for Gazelle, people are trying to either recycle the used products or sell them. Technological: Technology is getting advanced day by day, which is good sign for gazelle as new products are formed and people switch to them selling their old products. Keys success factors for Gazelle: In my opinion key success factors for Gazelle are following: Easy access: It takes no time to access to Gazelle to sell or buy anything. Fast: Gazelle is very popular in customers for its fast transactions. Customer-oriented: Gazelle has been customer oriented from its origin. This had added up to its growth vitally. Quality Assurance: Gazelle has occupied the minds of customers as a brand, which assures quality used products. Synergy: Gazelle’s synergy with its online partners and large retailers has also made its contribution for the success of Gazelle. Appendices SWOT Analysis Strengths Weaknesses ? High profitability ? Comparatively weak presence outside US ? Company image ? High variation in profitability ? Market share ? Variety of products ? Availability of resources ? Global brand ? Strong distribution network ? Customer loyalty and repeat purchases Opportunities Threat ? Co-branding with other brands ? Emergence of new competitors ? New technologies ? Tax increases ? Growing levels of globalization PEST ANALYSIS Political current legislation future legislation international legislation government policies home market pressure- groups international pressure- groups wars and conflicts Economical economy trends general taxation taxation specific to product/services specific industry factors distribution trends interest/ exchange rates Social lifestyle trends consumer attitudes and opinions media views brand, company, technology image consumer buying patterns major events and influences buying access and trends advertising and publicity Technological technology development associated/dependent technologies information and communications consumer buying mechanisms/technology technology legislation innovation potential technology access, licensing, patents Porter’s five forces Analysis Threat of new entrants -Minimum to moderate threat due to current competent competitors. Bargaining Power of Sellers -due to emergence of other competitors sellers power may augment Current Rivalry -Moderate to high -Fewer competitors Threat of substitute services -Evolution of new service is difficult Bargaining power of buyers depends upon the service quality of competitors VRIO Valuable Rare Inimitable Organized Competitive advantage Yes Yes Yes Yes Sustainable Economies of Scale (SRAC Shot run average cost)