Gazelle in 2012 Harvard Case Solution & Analysis

Gazelle in 2012

Gazelle is a leading online market to purchase and sell used electronic devices. However, its legal name is “Second Rotation” but customers see it as “gazelle” which was chosen for branding and operational purpose by Gannet, Aurelien McElhiney the co founders of Second rotation.

How did gazelle attain sustainable competitive advantage?
The secret of Gazelle for attaining the sustainable competitive advantage (a competitive advantage that is difficult for competitors to imitate) lies in wisely considering the business opportunities at the right time. The co founders observed different practices made by the people i.e. they did not try to recycle or sell their electronic devices. Rather they would just leave using the device, which was not of any interest to them.
Nevertheless, responsible consumption, financial crisis of 2007-9, space requirements to keep useless items and new produt introduction did persuade people to either sell the device or recycle it. Gazelle was developed by keeping these factors in view. Since no other platform was present at that time to provide the facility of buying and selling the used products other than eBay, which itself was not much effective. Therefore, Ganot and cofounders took the advantage of that opportunity and provided the platform for such transactions. Gazelle from its origin has been very competent in doing the business as it took over a large magnitude of large retailers and local customers. With an easy access to the customers, it became famous in no time with heavy web traffic on its website. It was due to the skills of the management that it had almost 900000 viewers of website in 2012.
Competitive Advantages: Gazelle has competitive advantage over other competitors in following attributes:

-Listing process used by Gazelle is splendid as it specifies every thing related to the product.
-Shipping logistics: An addition of a box to pack the goods in and pre-paid shipping charges are also an advantage over other competitors.
-Dealing with pre- and post sale customer inquiries efficiently
-Re-pricing consideration: if the product does not come out to be matching with the specifications and conditions mentioned by the seller, it is wisely re priced by Gazelle.
-Price Arbitrage: Gazelle certainly have significant advantage of information regarding sellers and buyers. Therefore, it can draw sufficient margins from buying and selling prices.

Strengths: Gazelle certainly had the strengths as it had a competitive advantage. Strengths of Gazelle are listed below.
Variety of products:  Gazelle offered a variety of electronic devices to customers with 22 categories of it.
Customer obsessed culture: Gazelle has been customer oriented since its start, as it has been providing several facilities to buyers and sellers including a box offered to the seller to pack the goods in.
Company Image: Gazelle has been very popular even in the initial years, as it had been providing quality service to customers. This resulted in creating a good image about the company in customers’ minds.
Quality items: Quality of the product was kept in consideration while selling it to different buyers, as buyers seemed to be quite reluctant in buying used goods because of the possible defects present in them. However, Gazelle assured quality.
Market share: Gazelle has an advantage of bigger market share compared to its competitors. Recent figures show that views of gazelle.com are almost thrice as that of its biggest competitor.

Weaknesses: Gazelle lacks weaknesses in many regards but according to some reviews by customers gazelle sometimes took extra time while dispatching the goods and also in delivery of checks. Gazelle also had a weak image outside US.

Opportunities:

 Gazelle has following opportunities from its external environment, which can lead it to better growth.
New product introduction:

New products keep coming in the market and people after using a product for short time switch to a newer one. This provides Gazelle an opportunity to grow.
Intermediation:
Ganot is currently thinking to switch the gazelle as an intermediary between sellers and buyer’s .This would get larger profits with minimum liabilities for gazelle.
Social trends:

 Social trends keep changing but world has now started thinking about the environment critically. They do not waste the product. They either sell it or recycle it. This is an opportunity for Gazelle to make growth...............

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Gazelle is a pioneer model reCommerce mediation: he buys used electronics from consumers and resells them on eBay or to wholesalers. Looking ahead, its two main strategic objectives: 1) deciding how much to rely on partnerships with large retailers for growth, 2) the decision whether to continue as a "merchant", ie, the purchase and resale of goods (and thus inventory risk), or turn into a "two-sided platform" that connects buyers and sellers with no inventory risk. "Hide
by Andrew Haji, James Weber Source: Harvard Business School 19 pages. Publication Date: September 28, 2010. Prod. #: 711446-PDF-ENG

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