From the course: Developing a Competitive Strategy

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Focus on the entire purchase-and-consumption cycle

Focus on the entire purchase-and-consumption cycle

From the course: Developing a Competitive Strategy

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Focus on the entire purchase-and-consumption cycle

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- When analyzing their company's competitive advantage, whether in terms of the current situation or planning for the future, managers often take a very narrow approach. They implicitly assume that the potential customer has already decided to make a purchase, has identified alternative vendors, and the only question left is which company's products and services are better and or cheaper. Contrast such an approach with that of Amazon, the e-commerce giant. Amazon keeps track of every customer's purchase history. Through a data mining process known as collaborative filtering, Amazon is able to compare a particular customer's purchase pattern with that of other customers. This enables the company to make reasonably accurate predictions about what other products, especially books, may be of interest to the particular customer. Amazon uses this conclusion to send out targeted emails to each customer, recommending specific books for purchase consideration. A click would take the customer…

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