Strategic Management Frameworks of Fab.com
Strategic Management free essay example
Fab.com is a popular online ecommerce site. Technology and internet have surged the world of business in a big way that the current business corporations and activities have been taken to the internet. With innovative and fast skills and tools online selling stores have developed and been successful with the likes of Amazon and eBay being better examples. Online stores provide services and products to customers at the click of their computers and smart phones. The most interesting and effective tool is the fact that the stores provide shipping and delivery of goods purchased. Fab.com is no different but it offers much exclusive services as it provides a chance for everyone to discover and share product designs from their site. Fab.com is a site that provides a chance for every buyer to experience product designs and exchange with designers all over the world. The site has managed to sell and ship product designs to a number of people and currently records a daily sales income of more than $200,000. Thereby to discover more about Fab.com, below is two strategic frameworks that will provide (About Fab.com, n.a).
The strategic Three C’
The strategic three C’s is a strategic concept that is used by corporations to create a competitive advantage against other corporations in the market. With the three C’s a firm could differentiate it from other firms in the market then strategize its strengths and opportunities to produce and deliver more revolutionaries and better services. Fab.com with this strategic framework could work towards creating a better opportunity for its products services so that they can attract more customers and thus increase its sales. Indeed, a better strategic framework should be able have a more defined market definition, define well the relationship between the market and its relative corporate strengths and the relative superior performance which will define its position in the market. The three C’s include the strategies that form a marketing triangle which include the Company, the Customers and the Competitors.
The Company is Fab.com; its potential strengths are propelling the site performance for better. In each single day, Fab.com has managed to make sales up to $200, 000 due to its better customer care services that are helping customers at a click. Secondly the site provides free shipping for each next item bought, these has helped it achieve a 2,000,000 customers for the first seven months of its opening. With quality and fast delivery as its key strengths, Fa.com has improved. The Customers ideally get the best customer care services that enable them to do buy and receive the products at ease. The Competition Fab.com receives is stiff has it’s a new company that is growing and going against big online stores like Amazon and eBay, (9 Ways Fab Keeps Its Users Happy and Addicted, 2012). But Fab.com has managed to achieve a competitive advantage in product design sales as it has a different niche of products and services that appeal to the customers.
Porter’s Five Forces Theory
Porter’s five forces theory indicates that risk adjusted rates of a firm should be able to be constant within all the firms in the industry. The first force is rivalry. Rivalry is a common force in this industry as there are more stores being created each day and the competition from other bigger stores. Fab.com to be able to compete fairly with other stores it has managed to change prices constantly, improving its product differentiation and using the available channels of distributions effectively. Rivalry is also a challenge for the online stores, rivalry from more accomplished stores tries to put the site in operational challenges. The second force is the threat of substitutes. Substitutes are those products that are offered in another industry. Often new online stores like Fab.com face the threat from more accomplished strategic stores like Wal-Mart which sometimes could be much cheaper and convenient to customers. Hence these are a great threat to the development of such online store which could bring pressures of price competition and other service competition, (Roy, 2009). But then, due to the unique products and services that the stores offer, there is not much threat that is posed to its products.
Buyer power is another porters five forces. The power of the buyers to purchase products is so significant to the survival of an online store. There are a huge number of customers who have will and power to buy product designs from the stores. Considering the sales and customers the store achieved in the first seven months, there is a good purchasing power and will from customers. Buyer power ca b put together with the supplier power. Fab.com receives its product designs from willing designers world wide who wish to share their designs and put a smile to customers. Even as small online store, Fab.com has a good connection with its supplies so as to ensure that customers reach for the products easily and fast as these is the most important factor on do doing business, (Roy, 2009). There are a number of competitive suppliers who compete against each other in listing products at Fab.com making their power weak. Therefore the power of the suppliers is within their capability to offer deigns. Lastly is the threat of new entrants and barriers. With development of technology and more inclination to online shopping there is a possibility of increased new entrants in the market. Hence, there are chances of new entrants to compete with Fab.com. Barriers in online shopping come from the increases internet insecurity and online fraud which is keeping the online selling business. Government regulation and taxation is another barrier that is seriously keeping business down.
About Fab.com (n.a). Retrieved from http://fab.com/
9 Ways Fab Keeps Its Users Happy And Addicted, (2012). Retrieved from http://articles.businessinsider.com/2012-02-06/tech/31028745_1_customer-service-flash-sales-social-media
Roy, D. (2009). Strategic foresight and Porter’s five forces: Towards a synthesis. Munchen: GRIN.