Comparative study of e-commerce industry and tech bubble

Abstract

The dot com bubble, also called the Internet Bubble or the Dot-com collapse was because of the rise of commercial growth of the Internet, where venture capitalists and other investors saw potential for huge returns to their investments owing to massive internet adoption and thereby a new and growing customer segment. As the newer Internet companies experienced unprecedented rises in their stock prices and subsequently moved faster, the VCs took in more risk and chose to mitigate the risk by starting many contenders and letting the market decide which would succeed. The macroeconomic scenario then, categorized by a low interest rates in the late 90s added to this growth speculation. Since none of the companies in the long run could differentiate themselves as opposed to their competitors, a lot of company ultimately ceased to exist and this led to a collapse. This comprehensive project proposes to look at the current E-commerce industry, draw an analogy with the Tech bubble of the 90s by utilizing some of the strategy tools available, and be able to provide a strategy roadmap of the future. The study will also look at some of the dominant players in the E-commerce industry, analyze them and try to predict if they possess any competitive advantage to sustain themselves in the long run.