Strategic Management

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1. According to Housenbold, success is to “figure out what you’re good at, figure out where you can make money, and focus”. This is related to strategic management because it necessitates that the company involved in the Internet based image industry or similar industries develop a path towards success as it is this path that will necessitate future changes the company maintains. For Shutterfly, the company’s ability to continually develop innovative products and to market this products to a growing body of consumers is not just a hallmark of the company’s success but also something that is indicative of the strategic management approach the company assumed in terms of its approach to developing long-term competitive advantage.

2. The industry Shutterfly is competing in is the Internet-based image industry. In terms of threats of new entrants, Shutterfly has a number of aspects of competitive advantage that are very strong. The company hired PhD scientists in an effort to lower its manufacturing costs. This ultimately resulted in the company having the lowest costs in the industry by cutting-out the middle man. Other companies exist in this same market-place, but Shutterfly has been successful in increasing to establishing innovative product lines and low-prices that ensure the company remains in-front of the curb when it comes to products within this industry.

3. In terms of threat of substitute products or services, the video indicated that in terms of 3 x 5 images, the company has a substantial amount of threats as customers are even capable of printing such images on their home computer. In terms of bargaining power of customers, the customers are able to bargain regarding these forms of purchases with other companies, but Shutterfly’s unique product line has created a situation where a multitude of the products the company supplies are products that can only be purchased directly from Shutterfly. In these circumstances, the customer’s bargaining power is limited in terms of the products that are available from other avenues.
In terms of bargaining power of suppliers, the company has been successful in establishing a product line that almost entirely eschews forms of manufacturing that would otherwise slow the company’s products down or cost increased amounts of money in terms of production. This has created a unique situation for the company and allowed it to bypass traditional forms of supply costs that would traditionally result in increased amounts of supplies. In terms of intensity of competitive rivalry, there are a number of companies competing in the industry.

4. Shutterfly’s business-level strategy has remained strongly in favor of providing innovative product lines to consumers. Additionally the company has sought to limit the amount of manufacturing costs it incurs.

5. Shutteryfly has a number of business challenges. Perhaps the most overarching challenge the company faces is the challenge related to its customer-based. The company’s customer-base has the ability to choose for a multitude of other suppliers or to simply use the images on their Internet-devices and bypass shutterfly completely. Increasingly in future contexts Shutterfly will be required to innovate products that will allow the company to remain competitive into the 21^st century. This innovation is clearly contingent on the rapid changes in technology that take place in the modern world environment. With such changes, Shutterfly will surely remain one of the industry’s leading companies in the upcoming decade.