Competitive Dynamics For Strategic Planning: A Case Study Of Wattpad Essay.

Competitive Analysis

Discuss about the Competitive Dynamics for Strategic Planning.

The competitive analysis of an organization is important for the strategic planning and providing a future growth direction to the company. It denotes assessment of the strengths and the weaknesses of an organization and evaluation of opportunities and threats to the organization. The competitive analysis is also significant in the strategy development, implementation and monitoring. It is also important for the defining the corporate strategy and development of the competitive advantage (Fleisher & Benoussan, 2015). In this regard, in this report, the competitive analysis of Wattpad, an online reading community is conducted. The company was founded in 2006 by Allen Lau and Ivan Yuen and since then emerged as one of the most famous online reading platform in the world (Rochester, 2012). In this storytelling community, the users can post their works, articles, stories, fan fictions and poems through mobile app or the website. Other users can read, like and post comments on the work of others. All the data, stories and the articles are user generated and all the users are provided equal chances to write popular work. About half of the user base of the company is from the USA, and the other users hail from the countries such as the UK, Canada, Philippines and Indonesia (Alexa, 2017). Due to its unique and innovative concept, the company is obtained awards as the hottest digital media company is the Canadian Innovation Exchange. Ivan Yuen, the founder of the company is also awarded as a top Canadian entrepreneur at the Impact Infused Awards (Jackson, 2011). 

Wattpad was founded in 2006 and since then has become an immensely popular publishing success story all across the globe. It has customer base in all major countries and about 30 million regular users. Although, the beginning of the company was slow, its growth and popularity both have grown in the last few years. Several venture capitalists have invested in the growth of the firm (Ingram, 2014). The success of the company is due to its global outreach, connectivity with the customers and the social element. Its core competency is the free availability of the stories in almost every country in more than 50 languages. It has implemented various tactics that makes it stand out from its competitors such as chapter-by-chapter serialization, sending notifications to readers in case of new chapters or stories and providing an easy platform to publish, comment and share stories. It also provides an opportunity for the writers to immediately connect with the users and exploits the social reading phenomenon. Currently, the company has a staff of 80 people which is an asset to the company as it is diversified workforce. Wattpad is a global company and culturally diverse workforce will prove beneficial in assessing and examining the needs of thee customers who are culturally diversified (CBC books, 2014).  

Market Commonality vs. Resource similarity

It is pioneer in the online book publishing industry and provides opportunity for young and talented writers to reach global audience and promote themselves. It has also implemented strategies to protect the copyright infringement and rights of the writers. The primary users of the company are under the age of 25 and tap this market by offering free stories in different genres. The current visitors of the company rival that of Pininterest, a popular social media website (Bello, 2012).

Another competency of the company is that it was the first to venture in the market of online book publishing. The company was introduced before Kindle, Nook and Kobo ventured into the market of e-books (Hoffelder, 2011).

Market Commonality vs. Resource similarity: Wattpad has a global market and has customers all across the globe. Therefore, it has high market commonality where it competes with large number of organizations in the similar industry. However, it has distinguished itself from other competitors by adopting a unique business model. Its strength is the providing instant connectivity between different users and free of cost usage.

Main Competitors for This Company: The main competitors of the company are Scribd, Kindle, Nook, Kobo and Amazon books

Drivers of the Company’s Competitive Behavior: The competitive behavior of the organization is driven by its unique business model in which the users can easily access qualitative stories with the Wattpad App or website. This business model is effective in tapping the users who are price-sensitive such as students or kids. It has also added features such as creating different categories such as What’s Hot, Romance, Adventure and Horror to suit the taste of different customers. The consumers browse through their favorite category and select their favorite books.

Factors affecting likelihood of Competitive Attack: With the success of the organization, several online counterfeit companies have emerged to tap the online reading community. The major factors that can impact the competitive attack are providing quality content at low cost. Another factor is establishing communication between the writes and the different readers, which establishes a social community.

Company’s competitive advantage: Currently, the competitive advantage of the company is the free services that it is providing. It also has a loyal user base that ardently follows the stories and the books of the famous authors.

In order to evaluate the external environment of the organization, an external environment analysis is conducted through PEST analysis.

Main Competitors for This Company

Political Factors: There are several political and legal factors that can affect the online publishing companies. Firstly, the laws related to the copyright infringement and breach of rights of the writers can impact the company. Moreover, defamation and publicity rights are other significant legal factors in the publishing industry (Hawkins, 2013).

Economic Factors: Since the company is operating a free access site and mobile app, the economic factors have little impact on the business of the company. However, the company is planning to raise fan-funding. Economic recession can impact on the fan-funding for the organization (Bensoussan & Fleisher, 2008).

Social Factors: The development of Wattpad is based on the social phenomenon of reading and the love of books. Therefore, the social factors have a huge impact on the business of the organization. The popularity of the book will be affected by the book reading habits and culture of a specific region or age group (Applegate & Johnsen, 2007).

Technological factors: The technological factors also have a strong impact on the business operation of the organization. The business model of the company is developed as such that the customers can access the books through online modes such as personal computers and the smartphones. Therefore, business in a specific community is dependent upon the smartphone users and their reading habits. The technology is also crucial for the organization for the development of the mobile application an advancing its features to compete with the emerging online publishing companies (Applegate & Johnsen, 2007).

The internal analysis of the organization is significant in the strategic planning and identifications of new business opportunities for the organization. SWOT (Strength, Weaknesses, Opportunities, and Threats) is significant in the defining the core competencies of the organization and deciding which opportunities it can invest by determining the strengths and the weaknesses of the organizations.

Strengths: The strength of the organization is its novel approach to the online reading community. It has developed a large user base in which different users can access books in their favorite genres at a very low cost. It is free of cost and provides opportunities for social interactions.

Weaknesses: The primary weakness of the organizations is the absence of a robust revenue model. Additionally, its incompetency in the identification of copyright infringements by the user which can deteriorate its reputation and brand is another significant weakness (Romano, 2012).

Opportunity: The opportunity is to exploit different geographical regions and age groups by offering readings as per their taste.

Drivers of the Company’s Competitive Behavior

Threat: The major threat to the organizations is the increased number of the competitors and counterfeit organizations.

Wattpad is a unique and innovative business model and there exist a lot of opportunities for it to exploit. In this regard, several recommendations are made for the organization to boost its relative position in the marketplace of global publishing industry.

• Wattpad should focus on developing a robust revenue model for the organization for its sustainable growth. It can take inspiration from other social media websites such as Facebook and invest in increasing the revenue by promoting brand promotion (Unicorn Economy, 2016). It can also charge minimal fees from the readers as well as the writers to increase its revenue.
• Wattpad can also increase its customer base by investing in market research at different countries and suggesting region specific books to the users. It can also focus on developing a mechanism in the app in which the customers are suggested books based on their past searches and reads (Harrison & Cupman, 2017).  

Conclusion

Wattpad is an innovative business model that offers opportunity to book lovers to read books from its large library totally free of cost. It has been identified that charging zero prices and social community is the core competency of the organization. It has been identified that several laws, social trends and technological factors can impact the business of the organization. The company has immense opportunities in the global markets and can adapt its product to increase its customer base.  

References

CBC books. (2014). Wattpad: A Canadian publishing success story. Retrieved 19 February 2017 from https://www.cbc.ca/books/2014/07/wattpad-a-canadian-digital-publishing-success-story.html

Bello, G. (2012). PW Select December 2012: Wattpad Revolutionizes Online Storytelling. Publishers Weekly. Retrieved 19 February 2017 from https://www.publishersweekly.com/pw/by-topic/authors/pw-select/article/55231-pw-select-december-2012-wattpad-revolutionizes-online-storytelling.html

Rochester, S. (2012). Wattpad: Building the world’s biggest reader and writer community. THe literary Platform. Retrieved 19 February 2017 from https://theliteraryplatform.com/magazine/2012/10/wattpad-building-the-worlds-biggest-reader-and-writer-community/

Fleisher, C.S., & Benoussan, B.E. (2015). Business and Competitive Analysis: Effective Application of New and Classic Methods. FT Press.

Jackson, B. (2011). Wave Accounting and Wattpad win people’s choice awards at CIX. It Business. Retrieved 19 February 2017 from https://www.itbusiness.ca/news/wave-accounting-and-wattpad-win-peoples-choice-awards-at-cix/16717

Alexa.  (2017). wattpad.com Traffic Statistics. Retrieved 19 February 2017 from https://www.alexa.com/siteinfo/wattpad.com

Ingram, M. (2014). Collaborative-writing platform Wattpad gets $46M in financing for global expansion. Gigaom. Retrieved 19 February 2017 from https://gigaom.com/2014/04/08/collaborative-writing-platform-wattpad-gets-46m-financing-round-for-global-expansion/

Hoffelder, N. (2011). Amazon Hides Competitor’s Reading Apps on the Kindle Fire. The Digital Reader. Retrieved 19 February 2017 from https://the-digital-reader.com/2011/11/16/amazon-hides-competitors-reading-apps-on-the-kindle-fire/

Hawkins, S. (2013). 5 Top Legal Issues for Authors and Self-Publishers. The Book Designer. Retrieved 19 February 2017 from https://www.thebookdesigner.com/2013/03/5-top-legal-issues/

Bensoussan, B.E., & Fleisher, C.S. (2008). Analysis Without Paralysis: 10 Tools to Make Better Strategic Decisions. FT Press.

Applegate, E., & Johnsen, A. (2007). Cases in Advertising and Marketing Management: Real Situations for Tomorrow's Managers. Rowman & Littlefield.

Romano, A. (2012). The downside to Wattpad’s brave new digital world. The Daily Dot. Retrieved 19 February 2017 from https://www.dailydot.com/business/wattpad-downside-digital-publishing/

Unicorn Economy. (2016). How does Facebook Make Money. Retrieved 19 February 2017 from https://unicornomy.com/how-does-facebook-make-money/

Harrison, M., & Cupman, J. (2017). Competitor Intelligence Research & Market Intelligence. B2B International. Retrieved 19 February 2017 from  https://www.b2binternational.com/publications/competitor-intelligence/