Q1. Define the contested boundaries among Amazon, Apple, Facebook and Google.

Solution:

With the expansion of the big four tech firms, their product and services are increasingly overlapping.
Defining the market is an essential element of studying the competition. Globally these firms are competing
on capabilities. The below mentioned analysis is a capability heat map of Amazon, Apple, Facebook and
Google.

Google Apple Amazon Facebook

Interface Devices 1
Advertising Network 2 1 1 1
Search Capability 2 1 1 0
Voice-activated Audio 1 1 1 0
Smartphone Capability 1 1 0 0
Retail Capability 1 1 2 1
Sharing Capability 1 0 1 2
Television Capability 1 1 1 0
Payment-System
1 1 1 0
Capability
No Presence Has Presence Dominant

The contested boundaries concluded from the above analysis are as follows –
Competitive
Landscape Contested Boundaries
Facebook (Facebook, WhatsApp, Messenger, Instagram) Vs
Social Networks Amazon Reviews

e-Retail Amazon Vs iTunes Store Vs Facebook Vs Google Play

Advertisement Sales Google AdWords Vs Facebook Exchange

Mobile Devices Google Pixel Vs iPhones Vs Kindle

Television Amazon Prime Vs Apple TV Vs Google Chromecast

In the past, Amazon was predominantly a retail store, Google was a search engine, Apple was known for
their hardware, Facebook was an online social network.
Q2. For each contested boundary that you have identified, how is the contest likely to play out among
the giants? How many contests give rise to winner-take-all markets? How many to always-a-share
markets? How will the complex ecosystems, in which online businesses are built on top of other online
businesses, and third-party sellers that rely on platforms, evolve?
Solution:

1. Online Retailing:

The e-retailing has transformed the way business is done in India. The market size is expected to
grow from 32.7 billion dollars in 2018 to 200 billion dollars by 2026. Much of the growth of the
industry has been triggered by the increasing internet and smartphone penetration. Amazon has
continued to dominate the e-retailing industry. Apple’s iTunes and Google play challenge Amazon
over retailing of digital content.
2. Interface Devices
Google with its Android technology and Apple with its iOS are predominantly two major players in
the industry. Apple and Google fight to run the smartphone industry and interface platform.
3. Social Engagement
As of 2018 the median day-to-day social media usage of internet users worldwide amounted to 136
minutes per day, up from 135 minutes in the preceding year. At present the country with the most
time spent on social media per day is the Philippines, with online users spending an average of four
hours and one minute on social media each day. In comparison, the daily time spent with social
media in the U.S. was just one hour and 57 minutes.
160

135 136
140
126
120 109
101
Minutes Per Day

100 95
90

80

60

40

20

0
2012 2013 2014 2015 2016 2017 2018

The below data provides penetration of Facebook usage in India from 2015 to 2023. It is forecasted
that 31% of the population will be also accessing the social network, up from 23% in 2018.
 35.
31
29
30.
27
25
25. 23
21
19
Growth %

20.

15. 12.5
10.36
10.

5.

0.
2015` 2016` 2017` 2018` 2019` 2020` 2021` 2022` 2023`

Facebook usage penetration in India from 2015 to 2023

The share of Facebook in the Social Media market across India was about 86.56% in 2018. A large
segment of young India with access to the internet constituted Facebook usage in the country. About
74 million men and over 23 million women between ages 18 and 24 were users of the social media
platforms. Google tried to compete with Facebook by launching the social media platform Google+
in 2011, which eventually was shut down in April 2019. Google still exerts competitive pressure on
Facebook through its social and media platform YouTube. YouTube is a destination for content, a
platform where people actively turn for videos of their favourite influencers.

4. Online Advertising
Google, Amazon and Facebook compete aggressively in the search advertising market. Although
Google has a 73% market share in 2018, Amazon ad business is growing at a faster rate. It is
forecasted that Amazon’s search business will grow 30% over the last year. Amazon Ad business
has drawn substantial increases in spending as advertisers can reach customers during product
queries, a time when they are ready to purchase.
116.32

140
Advertising revenue in billion

120
95.38
79.38

100
67.39
59.62

80
51.07
43.69
USD

60
36.53
28.24
22.89
21.13

40
16.41
10.49
6.07
3.14

20
1.42
0.41
0.07

0
2015
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2016

2017

2018

Advertising Revenue of Google 2001 to 2018

 25

Advertising revenues in million USD 20 19.22

15.01
15
11.33
10
7.41

5 3.33

0
2017 2018 2019 2020* 2021*

Advertising Revenue of Amazon 2017 to 2021

200% 185.8%
180%
160%
Year-on-year growth

140%
122.6%
120%
100%
80%
60% 53%

40% 32.5% 28%

20%
0%
2017 2018 2019 2020* 2021*

Advertising Revenue Growth of Amazon 2017 to 2021

2018

Q3. Identify a firm that you know something about, for example a media company, a retailer, or
manufacturing firm, with some involvement in the online economy. How many, if any, of the big four
firm does it currently rely on? Might that reliance change? How might that firm hedge the risks it
will face if there is a transition to one of the others or to a new player?
Solution:

Zizira is an organisation founded in the scenic city of Shillong in Meghalaya. Their vision is to help
thousands of farmers from the Northeast India region and link them with their consumers directly. Most of
these farmers live by the highlands in secluded locations and in unfavourable environments. In order to
help these farmers, earn adequate income and help sustain their family Zizira sources crops and other food
products from them, packs them and sells them on Amazon.
For a small business like Zizira, the competitive advantage for increasing its sales heavily relies upon the
infrastructure provided by – Amazon, Google & Facebook. Although these companies are highly
competitive in their Ad-revenue, but for small business they provide unique enablers for their business.
In the case of small business like Zizira, products are advertised using Amazon sponsored products and
need to pay only when ads are clicked. Moreover, Amazon takes full responsibility for delivering the
product for which they charge some delivery fees. Facebook has a different operating model when
compared to Amazon. On Facebook Zizira runs ads, promotes it and measure ROI. If there is an order
through Facebook, Zizira must take full responsibility to deliver the products. For most of the two decades,
Google has dominated the online advertising industry. Zizira also uses the AdWords program to reach out
to new customers. The collaboration and productivity apps for business bundled in the G-suite offered by
Google helps the business to streamline and perform day to day operations smoothly.
Zizira relies on all the big four firms, to sell its products and manage operations efficiently. But there is a
sparse chance of switching from one firm to the other. As the operating models of these big four firms are
completely different from each other, which provides a holistic coverage for a small-scale business like
Zizira.

Operating model

Google Search Engine

Facebook Social Network

Amazon Seller Platform

Apple Smart phones

Q4. What skills will be under-supplied in the future of the digital distribution infrastructure that
you envisage?
Solution:
Digital distribution is the distribution method where content is delivered without any use of physical media,
usually by downloading from the web straight to the consumer. Digital distribution is a replacement for
traditional physical distribution methods, like paper or DVDs. E.g. Consumers will be able to log on to an
authorized website offering preview samples, singles or full albums on the web for download. It is
transmitted from the internet web server to an individual user computer hard drive.
Distribution programs have been being refined to provide safer on-line transactions, consumer licensing,
and anti-piracy measures etc. There will be a shortage of expertise on optimizing the digital infrastructure.
As firms like Google, Amazon, Facebook and Apple have now become too big to fail and that holds a
monopoly in the market for the new entrants as well as the offline retailers. There should be a balance
between the online and offline retail.