Newspaper article St Louis Post-Dispatch (MO)

This Amazon Is a Tiny Player in the Big Market

Newspaper article St Louis Post-Dispatch (MO)

This Amazon Is a Tiny Player in the Big Market

Article excerpt

You hear it time and again among small business owners - one great idea, even if it wins customers and generates huge sales, isn't enough.

To sustain a company, innovation must occur time and again. If not, the big companies will swallow you up.

This theme came up repeatedly at the Inc. 500 conference of the fastest-growing privately held American companies. What sustains these companies is anxiety - the fear that if they don't do things differently, their new-found success will be obliterated. Alexander van Putten a lecturer at the Wharton School at the University of Pennsylvania, laid out the typical scenario in one session at the conference: A small company discovers a niche ignored by a larger competitor, offers a unique product, markets it like crazy and begins to see its business rise. Ideally, he said, the product energizes customers and builds sales. But over time, something else usually happens: What is new and unique about the product becomes less so as competitors copy it, perhaps even improving on it and undercutting on price. "Having brand equity" - recognition for a new product or service - "is very important. But the question is, `What kind of advantage is that once somebody else enters and competes on price?' " van Putten said in an interview. Big companies can usually afford to ignore an upstart for a year or two. But if it proves successful, a large company will move in and try to capture the ground it ceded to the newcomer, battling back with superior financial resources. An instance of this occurred this month in the book retailing industry. Amazon.com, an upstart Internet-based bookseller, has had a huge success with its business, offering books from its Web site at substantial discounts and advertising itself as the world's biggest bookstore. With a lot of publicity, it went public in mid-May and its shares shot up 23 percent on the first day of trading to $23. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.