A thesis discussed at the University of Padua highlights the need to ensure an in-depth understanding of markets before setting out to conquer them: an essential aspect of good production culture
When, how and where to enter a market: these are key themes, at the top of the agenda for many companies. These themes can be approached in a variety of ways and – when properly understood – are fundamental to the culture of production which can make all the difference between companies.
The issue of the relationships between businesses and the market is not easy to unpick, yet this is at the heart of Andrea Paggetta’s thesis work, “L’uomo saggio impara dai suoi errori, quello più saggio dagli errori degli altri. Le strategie di Netflix, Stadia e Spotify nel mercato dei beni digitali” (A wise man learns from his mistakes, a wiser man from the mistakes of others. The strategies of Netflix, Stadia and Spotify in the digital goods market), discussed at the University of Padua, “M. Fanno” Department of Economics and Business Sciences.
Paggetta writes: “The theory of the ‘first-mover advantage’ maintains that a company that succeeds in entering a market segment first, through the implementation of certain strategic behaviours, gains a competitive advantage. Many organisations have managed to achieve this type of advantage, but this does not mean that there are no negatives to this approach, or better and more effective strategies.” This is the statement that provides the basis from which Paggetta’s research begins. The author explains how a business may also “decide to enter a market in which one or more companies are already well established, by deciding to copy, either in whole or in part, the strategy of the leading organisation.” He also examines how a company may “intuit a new need in the market and decide to wait for another organisation to make the first move, because it may not have the funds to invest in the research and development processes required in order to create a product that meets consumer requirements.” And in other cases, Paggetta asserts that it is better “to simply wait and study the behaviour of the first mover organisation, to avoid making the same mistakes as it does.” There are various types of entrepreneurial behaviour behind the different approaches that companies take to the organisation of production organisation and to their market vision. Paggetta thus attempts to demonstrate that being the first company to enter a market is not always sufficient to gain a competitive advantage, just as it is not always beneficial to copy the model presented by the best company in a given sector. Alongside the theoretic argument, the author examines the cases of Netflix, Stadia and Spotify, in order to provide a better understanding of the topic.
The final conclusion is clear: as a business, it is essential to be unique for what you are. And accordingly, before making a strategic decision, it is crucial to seek to understand which variables can influence a company from the perspective of its structure and its organisation. With this in mind, fostering a sensible and shrewd culture of production is always the best way to conduct oneself effectively in any market.
L’uomo saggio impara dai suoi errori, quello più saggio dagli errori degli altri. Le strategie di Netflix, Stadia e Spotify nel mercato dei beni digitali (A wise man learns from his mistakes, a wiser man from the mistakes of others. The strategies of Netflix, Stadia and Spotify in the digital goods market)
Thesis, University of Padua, “M. Fanno” Department of Economics and Business Sciences, Master’s in Economics, 2020