DQ1 e-activity and DQ2 Competitive Advantage Essay

DQ1 e-activity and DQ2 Competitive Advantage - Essay Example of buyers had an effect on an industry’s competitive pricing and consumer’s demand for better services, which affects the strategy of a firm (Porters, 2008b, 14). In this case, firms in the industry where customers have bargaining power experienced instances whereby consumers pressed for price reductions. Finally, the rivalry influenced the profitability of firms in an industry depending on the intensity of the rivalry and the basis of a firm’s rivalry (Porters, 2008b, 18). The online auction industry experiences robust growth due to the ongoing global internet and technological innovations although Yahoo, Amazon, and eBay are the most dominant firms in the industry (Bajari & Hortaà §su, 2004, p. 459). Nevertheless, the availability of online auction software in the industry, coupled with the low costs of establishing start-ups and cheap hosting services available, pose a threat of new entrants into the industry. In effect, the fact that the cost of start-ups in the industry is cheap makes the bargaining power of suppliers low in the online auction industry. On the other hand, buyers in the industry hold high stakes in a company’s profitability and success due to the bidding platform that the industry provided (Pinker, Seidmann, & Vakrat, 2003, p. 1457). In this case, buyers will control a firm’s strategy in the online auction industry since they have an option of buying the same commodities online from other dealers at a price of their choice. On the other hand, rivalry amongst firms in the industry results from the bidding platform offered, which brings intense rivalry (Stafford & Stern, 2002, p. 135). Finally, other resellers and auctioneers that are not internet based pose the substitutes’ threat in the online auction industry. Stafford, M. R., & Stern, B. (2002). Consumer Bidding Behavior on Internet Auction Sites. International Journal of Electronic Commerce, 7(1), 135-150. Retrieved from http://www.jstor.org/stable/27751048 Small businesses