Television and Online Retail Industry - Essay Example

Modern computers and technologically improved mobile phones have become close substitutes for television. However, it is very difficult for new players to enter the industry due to the high entry cost.

1b. According to Edwards, from a resource-based view of the firm framework, it can be observed that the company nowadays increasingly focuses on sales of television sets, which provide standard features such as 3D displays. As part of this strategy, the company has recently announced an extensive reorganization of the unit. The company “has eliminated 30,000 jobs, entered into joint manufacturing ventures with rivals, and shed assets.” (Edwards, 2011). In addition, the company sold a number of its production plants.

1c. Referring to the structural characteristics of the modern television manufacturing industry, Sony’s strategy may fail in the long run. As discussed, television sets are being largely replaced by modern computers and mobile phones. At this juncture, it is a cumbersome task for the company to survive the market competition by focusing only on the products’ standard features.  

 Question 2

2a. In the words of Tracy, the online retail industry is a rapidly growing market sector and this immense growth can be attributed to the industry’s ability to reach millions of potential customers at a cheap cost. Market forecasts show that the online retail industry would become one of the world’s most profitable industries by 2015. Nowadays, marketers are increasingly focusing on online shopping with the intent to serve the interests of customers at a fairly low cost; and this situation is significantly intensifying the competition. Buyer power is higher in the online retail industry because of the stiff market competition whereas suppliers have weak bargaining power over their clients. However, the threat of substitutes is relatively high in the online retail industry although there is a range of entry barriers to new entrants. 

2b. The Wal-Mart online strategy reflects that the company still needs to go a long distance to actually exploit the infinite scope of the internet. As Boyle and MacMillan report, currently, the company is striving to improve its declining online sales even though it has recently announced an $11 billion package to restructure the use of the Web. It can be argued that the company’s all efforts would go in vain regardless of its resource capabilities if the firm did not improve its long-term online strategies.

2c. As specified in part 2a, market competition is intense in the online retail industry. Hence, the outdated online strategy will threaten the sustainability of Wal-Mart unless it immediately and effectively responds to the situation. To be more specific, the company must keep pace with modern online business trends since the scope of the Web is budding every day.