The failure of the Internet business eToys.com is examines in a performance and strategic analysis consisting of six pages in which Porter's Five Forces model is applied. Five sources are listed in the bibliography.
Name of Research Paper File: TS14_TEetoys.rtf
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changes in retail environment and consumers expectations. This has been a new medium for the sale of goods and services, with many companies seeking to gain a first mover advantage
as the distribution channel becomes more popular. Companies such as Amazon have taken a long tom to become profitable and although well known they are still on shaky ground. However,
other specialist internet companies that sought to gain the same advantage, such as eToys have not been as successful. If we consider this company, which gained computer shopper Best Site
award, had good branding and high levels of advertising as well as being a site that was easy to use, then we may learn the lessons that may benefit other
companies that are trying to establish and compete in similar conditions (Computer Shopper, 2000). eToys saw the development of the internet, and was
a company formed to take advantage of this new emerging medium. For many uninitiated, it seamed that the internet was a licence to print money. For these able to set
up they could shorten the value chain to create more value in the sale of goods, cutting out retailers, and in some instances for larger items, selling goods that were
then dispatched straight from a manufacturer, in effect the company was acting as an agent, With the further advantage of not requiring bricks and mortar, it is seen by many
that there is a greater value with the reduction in barriers that creates an environment where large and small companies can compete on a more even footing. The costs are
seen as lower. However, this is not always the case, and it was not a trap that eToys fell into. If we look at the company then we can consider