Overstock.com’s sales rely on a single distribution channel, which is the Internet. Mobile commerce is a new emerging trend within this function; yet, the company has chosen not to integrate it into its business framework.
Sales through the Internet are the only distribution channel that Overstock.com currently uses. However, an abundant body of evidence indicates an immense potential of mobile commerce, which is not yet strategically incorporated into the business model of Overstock.com. I reckon that it puts the retailer at a disadvantage compared to its rivals. By choosing to overlook mobile sales, Overstock.com considerably depreciates its competitiveness and demonstrates a lack of understanding of the key ingredients of customer satisfaction today. Perhaps, it is the result of a “predominantly inward” focus, which often accompanies the low cost strategy (“Customer focused low-cost strategy,” n.d.). Smartphones and tablets are similar to computers in terms of their functionality, but “follow” their owner literally everywhere. Moreover, in the context of this technology the first mover advantage has long transformed into a decent distribution channel for everyone to exploit (Liang, Czaplewski, Klein, & Jiang, 2009).
The current strategy of Overstock.com in terms of Porter’s generic strategies can be identified as the focus strategy, or a modernized Blue Ocean Strategy. The company’s lack of presence on the mobile commerce market is not actually having a direct impact on it (Kim & Mauborgne, n.d.). Selling through mobile applications is just another way to reach the customer, but it does not change the essence of the entity’s strategy. However, leveraging new capabilities is one of the keys to success, as pointed out by Iansiti and Levien (2004), and Overstock.com fails to do so. Mobile commerce could be a valuable profit-generating addition to its strategy, especially in the wake of an estimated $12 billion in sales by the top 400 retail companies in the USA this year (Woodward, 2012).
Mobile commerce has huge potential for retail companies. Customers more and more often choose to use their mobile phone for purchases. Failing to strategically commit to mobile sales will place Overstock.com behind the competition. Moreover, such a decision does not imply significant changes to the current competitive strategy.
References
Customer focused low-cost strategy. (n.d.). Retrieved from: HYPERLINK "http://www.alagse.com/strategy/ s10.php" http://www.alagse.com/strategy/ s10.php
Iansiti, M., & Levien, R. (2004, August 23). Strategy for small fish. Retrieved from: HYPERLINK "http://hbswk.hbs.edu/item/4331.html" http://hbswk.hbs.edu/item/4331.html
Kim, W. C., & Mauborgne, R. (n.d.). What is Blue Ocean Strategy? Ten key points. Retrieved from: HYPERLINK "http://www.blueoceanstrategy.com/abo/what_is_bos.html" http://www.blueoceanstrategy.com/abo/what_is_bos.html
Liang, T. P., Czaplewski, A. J., Klein, G., & Jiang, J. J. (2009). Leveraging first-mover advantages in internet-based consumer services. Communications of the ACM, 52(6), 146-148.
Woodward, K. (2012, September 25). Tapping the potential of mobile commerce. Retrieved from HYPERLINK "http://www.internetretailer.com/mobile/2012/09/25/tapping-potential-mob ile-commerce?list_type=cat&cat=ROOT&ordered=1&index=9" http://www.internetretailer.com/mobile/2012/09/25/tapping-potential-mobi …