188 ENTREPRENEURSHIP
needs are very close to ours. With the advent of sophisticated Web search engines such as
Froogle.com and Shopping.com, this has become a commodity market and we will need to take
prices of such materials as a given.
The Threat of Relevant Substitutes. As noted earlier, there is little competition offering the
same combination of customization with children’s apparel, but indirect competition is growing
as leading retailers try to capture as much of the children’s apparel market share as possible. These
retailers have a distinct advantage in their physical locations that customers are already visiting.
It is likely that once we reach a certain tipping point, these larger companies will move aggres-
sively if they view us as chipping away at their core customer base. Our strategy allows us to
build equity while remaining under the radar of most large firms. We anticipate that, by the time
they effectively implement a business strategy to embrace customization, we will already own
that equity in the minds of the public. Several other auction sites have come along since eBay,
many quite good, but none will dislodge eBay as a synonym for online auctions unless the busi-
ness model radically changes.
The Threat of New Entrants into the Industry. As our market niche grows, we anticipate
more competition from the B2B competitors mentioned earlier. These branding companies
already understand the production processes needed to deliver customized products, but they
currently do not have our B2C marketing know-how or focus. Existing online shops like brand-
ing.com could decide to expand into the B2C marketplace in order to diversify their revenue
streams.
There are limited barriers to entry due to the low fixed costs involved in procuring our core
products and launching an e-commerce site. That is why we plan (see Objectives) to create entry
wedges wherever possible by obtaining nonexclusive rights to popular content. We will also cre-
ate and market our own unique products to further differentiate our offerings and extend our
brand presence. Our commitment to continuous innovation and our deep understanding of our
customer base will allow us to outmaneuver newer entrants.
The Rivalry among Existing Firms. The battle for the wallet share of brick-and-mortar retail
shoppers is growing in intensity as evidenced by the rapid growth of children’s apparel stores like
Babies-R-Us and Children’s Place. Fortunately for us, the quality of the rivalry among national
competitors in the online B2C marketplace focusing on customized children’s apparel is tame in
comparison. This lack of direct competition should help during our introductory months, and it
highlights how important it will be for Babyyourway.com to build market awareness and brand
recognition quickly in order to gain an immediate market advantage.
Macroenvironmental Influences. We focus here on two trends: online shopping growth and
the baby boomer demographic.
The shopping habits of Americans are always evolving. Just 20 years ago, most Americans
made the majority of their apparel purchases at conventional department stores. From 1998 to
2003, however, clothing store sales increased 22 percent while sales at conventional department
stores fell 10 percent. This decline resulted from the success of shopping malls, catalog sales, and
the Internet. Shopping malls are now dominated by chain apparel merchandisers that use their
marketing muscle and financial wherewithal to open dozens, if not hundreds, of new stores each