Overstock.com versus Amazon.com: competitive analysis

Stock Analysis

The author of this report is asked to cast an analytical eye towards Ovestock.com and how it markets its goods. Specifically, the author of this report is to answer three basic questions. First, it will be explained what Overstock's corporate level strategies are. Second, it will be identified what generic Porter strategy that the company follows. Lastly, it will be asked whether the company's generic strategies and marketing actions are in line with the Porter approach they have selected. While Overstock may blend in with other online giants like Wayfair and Amazon to some, it is clear that they have their own way of marketing and setting themselves apart and they do so using both price competitiveness and differentiation.

Analysis

The genetic Porter strategies focus on two major things and those are price competitiveness and differentiation. Indeed, the corporate level strategies of Overstock fit into both of those general realms in one form or another. The Porter framework uses a four square, with the squares arranged two by two, arrangement with cost leadership, cost focus, differentiation focus and differentiation in general being the four different options. Of the four, it is clear that differentiation is what they are after as what they do with cost is not their primary focus but is certainly on their radar. The reason cost is not the focus is that other online giants like Amazon and Wayfair operate much the same way with little to no-cost shipping and an online-only presence like both of those two. Differentiation is clearly their method of operations for a couple of reasons. First, they do commercials on television which is something Wayfair does very little and Amazon never does. Second, they do not require a Prime-style membership to get free shipping. In addition, they offer prices of protection plans and shipping costs up front. Amazon does neither of those as the plans are offered as the item is being put in the cart and the shipping, unless it's a "Prime" item, is often not free unless it happens to be third party vendor (which the other two giants do not do or allow for) and they happen to have free shipping.

To answer the questions in the assignment, Overstock is not doing anything majorly different than Amazon or Wayfair but the presentation is very upfront and honest comparatively speaking. The differentiation plan is greatly followed when they use these tactics as they are clearly in the same business as Amazon and Wayfair but they behave in a way that is clearly unique and, to many, superior in terms of their transparency and the conditions you to meet to get even the more basic benefits such as free shipping. Overstock has a membership program for sales and such but that is not required to yield the general benefits. Overstock does all this while doing commercials that instill a linkage between decorating and buying and happiness including from pitch-people Stormy Simon and others.