Online business through economic analysis

Online business through economic analysis

Paper Description:
The goal of your paper is to evaluate a particular online business through economic analysis. If needed, you can analyze an industry or technology instead. Modify the instructions below in that case.

First identify an industry or sector of interest to you, such as financial services, retailing, media, social networking or infrastructure. Within the sector, choose a firm that engages in electronic commerce. The more interesting and unusual, or less obvious the firm you choose, the better. If you choose a well-established, well-known firm like Google, Facebook or Amazon, you will be expected to provide more in-depth analysis or some newer insights.

Analyze the strategy and prospects of the chosen firm, paying attention to overall industry factors such as the nature of brick-and-mortar and online competitors, barriers to entry due to economies of scale, economies of scope, importance of reputation, and the nature of innovation in the industry. Explain how the firm creates value beyond what was possible in the absence of the Internet, and how it captures its share of that value (its business model).

Dimensions of strategy that you may wish to consider include customization or differentiation, bundling, pricing, marketing, and intellectual property rights management. If network effects are important, explain why, and how the firm is trying to take advantage of them. If customer lock-in possibilities exist, explain what these are, and how the firm is trying to take advantage of them.

Your conclusion should summarize the firm’s actual or potential competitive advantage, and assess whether it is sustainable or not. Will the firm survive? If so, how well will it do?

If you choose a firm that has already failed, or is failing, you can reorient your analysis appropriately to focus on what went wrong.

If you analyze a public company, you can access information from the company reports filed with the SEC, in their online Edgar database. Financial information will be helpful in analyzing your chosen firm, but many other aspects can be considered as well. In general, try to make the Web your primary research tool for gathering basic information.