Making Money From Online Maps
First of all, the article mentions that Yahoo for instance was trying to enter the market after Google. This shows Porter's point of how companies that are close rivals are dependent on each other and it actually proves that there is rivalry among existing competitors. This also means that Yahoo and Google for example are competitors that are roughly equal in size and in power. Furthermore, Yahoo's move towards introducing "satellite images of the entire world to its services" also shows that this is an industry that has low switching costs, if we are thinking of the customers to be the internet surfers in this case. These surfers can move from one website to another without incurring any costs at all, and a portal with additional services would definitely be a better option for them to choose. Therefore, Yahoo knew better and it introduced this map service.
However, the article states that Yahoo "took one step further", and has actually introduced satellite maps that are much more detailed than those maps of competitors. Thus, we can think of Yahoo as trying to improve the services it is offering, probably for a number of reasons. First of all, from Porter's point of view, Yahoo could be trying to raise its barriers to entry through product differentiation. This way, internet surfers would see more value on Yahoo than on Google for instance, which is also an implication of Hamel's core competencies component of the strategic resources. Yahoo introduced that service obviously because it knew something that was unique, valuable to the internet surfers, and transferable to new opportunities. In fact, I look at the whole map services idea as being a core competency right from the start of it. This makes it a new business concept innovation, according to Hamel. In addition to that, from Hamel's framework, we see that Yahoo is pursuing a basis for differentiation. This portal player is trying to compete differently from its competitors, such as Google, by having a resolution that is "now one meter per pixel for U.S. locations and 15 meters per pixel for the rest of the world."
Furthermore, the article also quotes the Yahoo! Maps product manager who says that they keep their eye on what their competitors are doing because this is an indication of what the internet users want. Therefore, with that we see that Yahoo is trying to collect information about the internet surfers, which Hamel mentions in his business concept innovation framework to be part of Information and Insight. However, I do not think that this is the best way for Yahoo to know more about their users. They should be pursuing other ways to know that. Moreover, Hamel's framework appears again as we see Fulfillment and Support with the portal players trying to reach out for their users through a unique way, which is through map services.
On the other hand, if we think of the companies that advertise on Google and Yahoo as being the major customers, then there could be other implications of the frameworks that we studied throughout the semester. First of all, we can think of these portals' primary strategic resources as being the internet surfers or the users who visit their websites. They should try to keep these users on their websites for as long as possible, thereby enhancing their resources. Hamel's framework comes into appearance here again first through the strategic resources, and second through the pricing structure, since Google's way is to auction its advertising spaces. As to Yahoo, it allows users "to select a various chain of locations to show up on a map search." Those deals included companies like Holiday Inn and Washington Mutual. Here Yahoo can be thought of as trying to adopt a basis for differentiation to the main customers, the businesses in need for advertisements. In addition, they are trying to create value for these customers. However, looking at Barney's framework, it is true that these resources are valuable and allow Yahoo to take advantage of opportunities in the market, but they are easy to imitate by competitors. Just like Yahoo imitated the whole idea of Map services, Google can do the same with regards to this idea.
With this, I feel like I can still go on and talk even more in depth about the frameworks and how they apply to this article. I think that now I can easily see through and understand how these frameworks are not only theoretical, but actually exist in the real business world. I am glad that became transparent to me because it helped me better understand why businesses act in certain ways that are sometimes difficult to understand.