The Business, Its Mission and Its Strategy Term Paper

The Business, Its Mission and Its Strategy - Term Paper Example The organization has continued to experience an explosive growth, which is demonstrated by its annual revenues moving from $250,000 in 2009 to over $2 million in 2010 (Samasource, 2011). Samasource’s core business is outsourcing of digital work from large or small organizations. The organization offers outsourcing services under five broad categories: data services, research and archival services, machine learning, customer support services, and online content services (Samasource, 2012). This is mainly done on the Internet. The organization operates as follows. First it sources for work from other organizations. It then uses a proprietary technology platform to divide the digital work it has received into smaller tasks which are then distributed through the Internet to its various processing centers or partner sites. At these processing centers Samasource specifically recruits and trains women and youth from poverty-stricken areas who then perform the small tasks. Upon co mpletion, each of these small tasks is taken through a rigorous quality-assurance process on the proprietary platform before they are aggregated back into complete projects and delivered to the clients. The proprietary technology platform is known as SamaHub and the small tasks are referred to as microwork – a term first coined by the Samasource founder. ... This industry has numerous buyers and suppliers, which makes the bargaining power of both parties relatively weak. The three forces that Samasource would need to be wary of are competitive rivalry, threat of entry and threat of substitutes. The intensity of rivalry here is currently moderate because of the contrasting characteristics. On the one hand, there are numerous competitors, which should warrant a fight for market share. On the other hand, industry growth is high, and this somewhat negates the need for fighting over market share. Also, exit barriers in this industry are low, which means that companies that are earning low or negative returns can easily opt to leave the market rather than struggle. This eliminates excess capacity from the market (Porter, 2008). Nevertheless, we single out competitive rivalry because of the potential for rivals to converge and compete on the same dimensions. The nearly identical services of rivals coupled with low buyer switching costs could lead to price competition and, consequently, destructive rivalry. Barriers to entry for this industry are low for the following reasons. Firstly, the primary infrastructure for this industry is the Internet, which weakens the incumbents’ ability to harness supply-side economies of scale. Secondly, buyers face low switching costs in changing suppliers. Thirdly, capital requirements are modest. Fourth, the Internet gives new entrants equal access to the distribution channel. These low entry barriers make the threat of entry industry force to be very high. Substitutes to Samasource’s offerings are Odesk, Elance, Freelancer and other online outsourcing sites as well as the traditional BPOs found in the developing countries. We have