"All eCommerce actors will be slaves under Amazon...": - A study on how Amazon has affected Swedish eCommerce and their defensive marketing strategies.

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“All eCommerce actors will be slaves under Amazon…”

- A study on how Amazon has affected Swedish

eCommerce and their defensive marketing strategies

Master’s Thesis 30 credits

Master’s Programme in Business and Management Specialisation: Marketing

Department of Business Studies Uppsala University

Spring Semester of 2021

Date of Submission: 2021-06-01

Hans Tam

Oskar Elfström

Supervisor: Jukka Hohenthal

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Acknowledgments

A long journey finally comes to an end - a journey reflected by hard work and dedication but also a great time we will look back on! We want to thank everyone who has supported us during the time we have been writing the thesis. Further, a big thank you to all respondents for your contribution and the opponents for the great feedback and constructive criticism throughout the thesis period.

Lastly, we want to express a sincere appreciation for the invaluable support our supervisor

Jukka Hohenthal has provided during this period in showing great commitment, drive, and

guidance. This would not have been possible without you!

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Abstract

Increased competition by new market entries has long been studied with defensive marketing strategies (DMS) being identified as one of the ways of combating a new competitor. There is limited research concerning defensive marketing strategies in the Swedish eCommerce business landscape against new market entries. To contribute to the research gap, this study aims to outline what defensive marketing strategies Swedish eCommerce businesses have implemented as a result of Amazon launching in Sweden late 2020. Qualitative semi-structured interviews were held with respondents in key positions of firms, where the individual either was consulting or working in an eCommerce business. The findings suggested that, in its generality, that no new DMS has been implemented as a result of the market entry. Amazon is expressed to have a weak position and lack in several aspects compared to Swedish eCommerce. The biggest fear lies in Amazon’s future with many potential “strong cards” left to play in their sleeve. However, the entry of Amazon increased the focus of some areas, as they were seen to become more important for survival and competing.

Keywords: Amazon, defensive marketing strategies (DMS), eCommerce, new market-entry,

market competition, competitive advantages, resellers & brand owners.

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1. Introduction

The first chapter presents the phenomenon that is studied. Previous research is showcased and a general overview is given to the reader. Amazon is introduced as an organization where relevant happenings are exemplified and culminate into a problematization. Furthermore, the study’s purpose, research question, and limitations end the chapter.

“Then we’re all dead! All eCommerce actors will be slaves under Amazon and there is no room for us.” - CEO of Pricerunner (2017)

Amazon Inc. launched in Sweden on October 28, 2020. During this time the authors of this thesis were working closely with several large Swedish eCommerce chains. The build-up and speculations leading up to this launch were immense. Almost every business the authors came in contact with was uneasy about the launch, expressing concerns over Amazon's potential impact on the Swedish market and the necessary preparation. These were usually marketing managers already having ambitious sales and profit goals. They had to meet those goals while combating the new powerhouse of Amazon. One of the authors had an encounter with a group of marketing managers needing to cut the marketing budget in half while increasing their profits for 2021. Challenging goals regarding growth from the shareholders combined with Amazon’s entry created fear and concern for marketing managers.

This fear did not appear just the months before the launch. Years before the launch, when Amazon’s entry in Sweden was announced, experts and eCommerce actors voiced their concern over what Amazon could bring with a market entry. The conversation started in late 2017 after Amazon started buying more advertisements, land and started recruiting in Sweden, promoting rumors that an entry would happen (Isacson, 2018; Boström, 2017). As soon as the rumors started, stock values amongst Swedish eCommerce went down. This was the first concern, that the market value will drop for Amazon’s competitors (Boström, 2017).

The prediction was that Amazon would enter Sweden and force lower prices that Swedish

eCommerce actors would not be able to compete with (Isacson, 2018). Competitors to

Amazon would be forced to have constant discounts on their products to keep market share

and have any chance of survival (ibid.). The consensus of which sector of eCommerce will be

hit the hardest are mostly the same. Some predicted that all offline shopping will suffer,

especially sectors that already have been hit by online shopping like electronics, books, and

toys, while groceries and clothing will not be as affected (Lindström, 2018; Handelsrådet,

2019; Boström, 2017). The predictions for Sweden are that Amazon will affect the markets of

eCommerce similar as in Germany, which has become Amazon’s second-largest market after

the US (Redaktionen, 2020). When the launch finally happened there were several issues with

the site and it quickly garnered criticism (Eriksson, 2020). The hype dropped in the following

months after the entry. However, Amazon themself are confident that they are on the right

track and are predicting to have a market share of 5% to 10% within 5 to 10 years (Bränström

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& Wisterberg, 2021). Boston Consulting Group recently published a report that Amazon will be the biggest eCommerce firm in Sweden within that time frame (Gunnilstam, 2021).

Companies that have suffered by not going digital will be hit even harder when Amazon enters (Handelsrådet, 2020; Lindström, 2018). Companies need to go digital and the ones that already have will need to further improve their services to compete with Amazon (Handelsrådet, 2020). Resellers will be especially vulnerable if they do not produce any of the products they are selling since they can't leverage Amazon as a platform (Handelsrådet, 2019). The recommendations are that these resellers start producing products under their brand and use Amazon as a platform for selling (Handelsrådet, 2020). However, the margins on Amazon will be low since Amazon has been previously good at negotiating, the recommendations are therefore to produce unique products that force consumers to go directly to the brand site to buy them since Amazon will not have a competitive product.

(Handelsrådet, 2019). Resellers sell multiple different brands, some of them they own and produce but mostly an online store selling brands that others produce. Single brand owners produce one brand and sell these via resellers and their own channels. Resellers and brand owners will be used in this study when referring to different types of eCommerce firms.

1.1 Problem Statement

With the emergence of eCommerce and its rapid growth, businesses need to be on their toes as new competition should be expected at any time. New competition brings new challenges and new innovative ways to deal with it. Competitors will try to lure your customers away with different business strategies that fulfills their needs and desires. This makes innovation, staying ahead of the curve, and a general understanding of the market environment critical aspects for preventative and counteractive actions for firms to not let competitors gain market share. Additionally, changes in strategy output is identified as a vital part of business success and should be a core activity for survival (Burke, 1984).

In the fundamental core of businesses, customers are what drives business growth and are the

foundation for existence and survival. For a firm to increase loyalty amongst customers and

essentially keep them within the borders their satisfaction level, demands and needs have to

be met. Customers want to be heard and feel that they gain something out of their purchases

(Vargo & Lusch, 2004). Roberts (2005) states that customer satisfaction needs to be kept at

any cost as it is the main driving factor for business growth. Firms should seek to give and say

what customers want and want to hear to increase satisfaction. Additionally, Aaker (1997)

describes shared values as an important factor in loyalty, customers seek firms they can relate

to. Even the most loyal customers can be lured away and engage in relationships with

competitors even if it's short-term. Fournier (1998) describes this as a fling, a short-term

relationship that generates single transactions, where the main drive from the customer is the

curiosity for something new. The idea of having satisfied customers is highly relevant in the

discussion of competition and new market entries and should be considered one of the main

activities in retaining customers (Morgan & Hunt, 1994).

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Actions taken to retain market share and valuable customers are known as DMS, i.e.

defensive marketing strategy (Roberts, 2005; Hauser & Shugan, 2008). DMS as a concept was introduced as late as 1983 (Hauser & Shugan, 1983), although strategies as such had been used by businesses for centuries. A sign of rapid market changes with marketing literature not keeping up (Heriyati et al., 2010).

With Amazon's launch last year in Sweden, one could argue that the level of competition increased for eCommerce businesses in Sweden, as Amazon is considered an eCommerce business (Amazon, 2021). The Nordic countries have historically been front figures in technological advancements (Economist, 2006; NRI, 2020). E-readiness is used to measure a country's ability to participate in the electronic world, i.e. utilizing information and communication technology (ICT) digitally. This includes eCommerce. The tool is essentially an indication of development and adaptability to Internet-based opportunities in a country (Molla, 2004). Nordic countries have a history of placing high in terms of e-readiness (Economist, 2006), and Sweden, in particular, is ranked 4th in the pillar of technology globally (NRI, 2020). Although studies show a high e-readiness amongst the Nordic countries and specifically Sweden, eCommerce is something greatly understudied in Sweden, not to mention the competitiveness in the area, with almost little to no research. Statistics show that eCommerce is rapidly growing in Sweden, where its turnover since 2003 has increased by 850% (Postnord, 2014). Furthermore, covid-19 has given eCommerce a big boost, with numbers of a 44% increase from April 2019 to April 2020 (Postnord, 2020:3).

Drawing upon the fact that Amazon has had successful launches in multiple countries across the world shows their ability in adapting to local business environments and it has resulted in high market shares. If firms fail to protect their market position against competitors, they are likely to lose customers and in the worst-case scenario might even lose the business. Large corporations are known to disrupt markets and many times resulting in business closures of competitors (Forsgren, 2017). The competition has undoubtedly increased amongst Swedish eCommerce, as a result of Amazon's new market entry. Thus, this study seeks to address the impact of new market entrants with Amazon being the studied phenomenon as there is a lack of research in this field and with the accumulated expectations that has been created of it.

1.2 Purpose

As stated in the problem statement, technology, and eCommerce, in particular, is on rapid growth. Competition by new market entries is something that should be expected and firms need to be prepared. With Amazon’s launch in late 2020, it can be argued that an increase of competition in the Swedish eCommerce landscape has taken place. These factors, in combination with a lack of research regarding Swedish eCommerce and their defensive marketing strategies against new market entries, will serve as a basis for the study’s purpose and research question.

This study aims to investigate the defensive marketing strategies that have or will be

implemented by Swedish eCommerce businesses to combat new market entries, with a focus

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of retaining market position and current customers. The new market entry this study will investigate is Amazon, as they are argued to be relevant because of their recent launch in Sweden and their reputation as a large multinational eCommerce. This study aims to explore DMS implemented before Amazon’s launch (actions in a preventative matter) and after the launch (actions in a resulting matter). It will be examined with the study’s theoretical framework.

Additionally, the study seeks to contribute to both theory and practice by investigating this research gap. As there is no prior research in Sweden on this particular area, the insights gained seek to contribute to marketing theory in the development of constructs in defensive marketing strategies against new market entries. Furthermore, it seeks to provide scholars and practitioners examples of strategies used by businesses in the Swedish eCommerce landscape, the knowledge shared can hopefully be of guidance in future strategy planning.

1.4 Research Question

How have Swedish eCommerce businesses’ reacted towards the new market entry of Amazon, in terms of defensive marketing strategies to retain market share and customers?

1.5 Limitations

The research is limited to the Swedish market and will consist of Swedish respondents that have knowledge of the domestic eCommerce landscape. Thus, the findings in this paper should not be generalized to other markets. Furthermore, as the study only examines Amazon as a business and how Swedish eCommerce businesses have reacted to their launch, it should be carefully taken into account when applying it to other new market entries.

Additionally, the consumer side will not be examined as the aim of this paper is to investigate

the actions by Swedish eCommerce upon the increased level of competition opposed by

Amazon.

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2. Theory section

In the following chapter, the reader gets an in-depth look at the study's choice of theory that creates the theoretical framework the study will be based on. Definitions and descriptions of the theory presented are from key researchers in the chosen area. The chapter begins with a background of MNCs, Amazon as the studied organization for the study and the Swedish eCommerce landscape. It is followed by a theoretical framework and an analytical model.

2.1 Background

2.1.1 MNCs and Amazon Inc

A multinational corporation (MNC) can be described as a firm that carries out activities in more than one country, often referred to as economic activities with the aim to either generate revenue or seek to minimize costs by exploring the new market (Forsgren, 2017). It is further described that MNCs can, with their power, have negative impacts upon local markets and societies. Some problems are monopolies, lobbies for legislation in favor of the firm and crushing competition (ibid.). Meyer (2004) argues that MNCs can have both positive and negative effects on new markets and economies. One positive effect is the innovations and technology an MNC can bring into new markets because of their financial power. It is usually the companies outside the industry gaining the benefits: suppliers, business partners, etc.

Despite the potential benefits an increased competition is inevitable (Meyer, 2004).

Competitors and other actors within the industry will have to compete with the MNC (ibid.).

Amazon can by Forsgren’s (2017) definition be described as an MNC and is also one of the largest eCommerce companies in the world (Markinblog, 2020). Amazon had a 49% market share of American eCommerce in 2019, and what makes Amazon so popular is their shopping experience, mainly through their Prime membership (Dayton, 2019). The membership gives members various exclusive services, with one being next day shipping of your purchase.

(Amazon, 2021). Amazon has become a search engine with 54% of product searches in the US taking place on Amazon.com (Franklin, 2019).

Amazon had such an influence on the American economy that the effects later were given the name the Amazon Effect, which refers to the disruption of retail by eCommerce (Cavallo, 2018). While the Amazon Effect is credited to all eCommerce (Cavallo, 2018), the market share of Amazon within American eCommerce shows that the company can have large effects on a country's economy. With Amazon launching in Sweden, and as a large MNC, one could argue that the country's economy will be affected and the competition will increase amongst eCommerce businesses.

Amazon has had successful launches in several markets. Amazon has shown an ability to

adapt their business model to different markets and cultures. They cooperate with major

delivery services more suited for the domestic market (Garner, 2018; Govindarajan & Warren,

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2016). It is not always a success for Amazon and they have failed in some markets. An example is in 1999, when Amazon launched in China but had to close down in 2019, continuing to sell across borders to consumers. One of the main problems is that they faced strong competition from Alibaba and Gmarket (Liu & Hong 2016).

2.1.2 eCommerce

Chaffey (2007) argues that an electronic business or e-business can be defined as a firm moving key business procedures online. This could be moving sales online via a website, advertising through social media and websites, leveraging portable devices such as mobile phones or tablets, etc. An eCommerce on the other hand is a subset of e-business and can be defined as selling or buying goods and services on the internet (Chaffey, 2007). Establishing eCommerce has been shown to increase a firm's value if the right strategies are taken (Filson, 2004). For small businesses being able to handle eCommerce is a must (Eriksson et al., 2008).

For example, location becomes less of an issue, just being one click away from your customers (ibid.). Eriksson et al. (2008) claim that Swedish eCommerce, at that time, was one of the most developed in the world and Swedish consumers had high expectations regarding the eCommerce platforms and their offerings.

2.1.3 eCommerce in Sweden

Swedish eCommerce has grown massively since the beginning of the millennium. From a total revenue of 4,9 billion SEK in 2003 to 87 billion SEK in 2019 (Postnord, 2015; 2020).

The eCommerce sector has grown at a rate of between 13% and 20% each year since 2014 (Postnord, 2015; 2016; 2017; 2018; 2019; 2020:1). From having 2,7% in 2003 of the country's total retail to 8,8% in 2017 (Postnord, 2017). eCommerce stood for 55% of the total growth for rare goods in 2019, having stood for 100% of the total growth in 2018 (Postnord, 2020:1).

The sectors that stand for the largest part of Swedish eCommerce are the ones that have the most e-readiness from Swedes (Postnord, 2020:1). The sectors with the largest share being online are books, electronics, and clothing with 59%, 33%, and 20% respectively (ibid.).

Some sectors see an improvement in e-readiness from Swedish consumers. These are pharmaceutical and groceries, both growing above 20% in 2019 (ibid.). The fastest-growing sector is pharmaceuticals despite the large part of prescription drugs being difficult to sell online due to the regulations associated with those products (ibid.).

It is a pharmaceutical company that is by far the most popular eCommerce company in Sweden, where consumers shop the most but also like the most (Postnord, 2020:1).

Noteworthy is that they only sell online, a trend that is also present when looking at the 20

most popular eCommerce stores by Swedish consumers. 18 of those 20 sell exclusively

online, the two that do not are two giants; H&M and Åhléns (ibid.). On the most popular list

are Amazon (this even before they entered with a Swedish domain) and four other foreign

actors with Zalando being the most popular (ibid.).

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In 2020 eCommerce was affected by the Coronavirus. In February 68% of Swedes bought something online, in April that was up to 78% and throughout 2020 there has been an increase of about 10 percentage points compared to 2019 (Postnord, 2020:2). The sectors that decreased significantly due to Corona were travel, restaurants, entertainment, clothing, and beauty (ibid.). While the sectors that saw a significant increase were streaming services and groceries (ibid.). However, these numbers are both offline and online. The different eCommerce sectors have either seen growth or no growth (ibid.).

2.2 Theoretical framework

2.2.1 New market entries & the early stages of DMS

Defensive marketing gained attention in the late 20

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century and started to become a widely studied phenomenon (Fornell & Wenerfelt, 1987; Kumar & Sudharshan, 1988; Erickson, 1993; Hauser & Shugan, 1983). The term ‘Defensive marketing strategies’ (DMS), according to Hauser and Shugan (1983), was introduced and coined by themselves, which is further acknowledged by Fornell and Wenerfelt (1987).

It was indicated in the late 20

^th

century that there was a research gap that needed to be addressed. Past literature was heavily focused on offensive marketing strategies, rather than on defensive marketing strategies (Hauser & Shugan, 1983; Erickson, 1993). With no prior research to give existing firms knowledge of how to behave with new competitive entrants in a market, Hauser and Shugan (1983) knew the unexplored nature of DMS would take years to fully address and could not be done in one single study. As a result, they decided to devote their first study on DMS with an angle to narrow it down a bit, specifically a focus on readjusting price, advertising expenditures, distribution expenditures, and product improvement expenditures (Hauser & Shugan, 1983).

By definition, Hauser and Shugan (1983) describe DMS as how firms marketing their existing brands should react towards newly launched competitive brands. In their study, they chose a focus of looking at expenditures in the marketing area, making their definition of DMS very well suited for their cause. A more general definition, that is based on Hauser and Shugans’, is presented by Fornell and Wenerfelt (1987). Their view includes new brand entrants but also bearing in mind the current state of competition in the environment. Their model seeks to give guidance in terms of preventative actions against current and new competitors from taking away the market share of a business (Fornell & Wenerfelt, 1987). Erickson (1993) uses a simpler definition and expresses DMS as strategies to “hold on to the firm’s present customers'' (Erickson, 1993. p.1), with no indication of whether it implies new market entries or current competitors. Kumar and Sudharshan (1988) take on a different angle on viewing DMS as reactions from existing firms upon new market entrants.

Erickson (1993) presents the view of closed-loop strategies which outlines the interplay

between offensive and defensive marketing strategies. When market share is low a firm tends

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to invest in offensive strategies to gain more share, as opposed to when market share is high a firm will naturally invest more in defensive strategies to “defend” their share, ultimately defending their existing customers against external forces. Martin-Herran and Sigue (2018) claim that a company needs a good mix of both offensive and defensive to succeed. However, focusing too much on the offensive strategies could in some cases harm the defensive strategies.

The common thread in the descriptions of DMS is that existing firms within a market environment take actions to retain market share and its customers against external threats, whether it’s a result of a new market entry or an existing competitor. The definition this study will adhere to is the one presented by Erickson (1993) “hold on to the firm’s present customer”(Erickson, 1993. p.1). The particular definition is focusing on all competitors whereas the study will solely be focusing on new market entries, in this case, Amazon.

2.2.2 Different types of DMS

Since defensive marketing strategies first were introduced, it has gained in popularity and has been a studied area throughout the years. However, Heriyati et al (2010) state that the area is still lacking in the literature. Looking at more recent literature, i.e. early 21

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century, it is evident that different views on DMS amongst authors have arisen and the concept as a whole has gone through a broadening (Roberts, 2005; Heriyati et al., 2010).

In the study done by Heriyati et al. (2010), five different dimensions of DMS are outlined; 1) personal communication, 2) firm-customer’s trust development, 3) firm-customer’s bonding development, 4) customer complaint management and 5) switching barriers.

1. Companies improve their communication through personalization, openness, and dedication to their communication.

2. Increase trust from both ways of the customer-company relationship

3. Increase the bonding between customer and company. Reaching a point where both the buyer and seller work together towards a common goal.

4. Improvement in dealing with customer dissatisfaction. Setting up a service department, training employees in dealing with complaints, and providing ways to compensate customers if necessary.

5. Creating barriers to leave. These could be unique products, longer contracts, rewards for repeat customers, and discounts for repeat customers. (Heriyati et al. 2010)

In contrast to the view of Heriyati et al (2010), Roberts (2005) identifies four types of

strategies that can be categorized within DMS, namely; positive strategies, inertial strategies,

retarding strategies, and parity strategies. These strategies can further be classified depending

on the way to achieve those targets (see figure 1)

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(Figure 1: Four types of categorization of DMS by Roberts (2005))

Before attempting to initiate a strategy, whether it is a defensive one or not, it is suggested that firms access themselves by for example employing marketing mix variables to find their core strengths and weaknesses. This should lay the basis of what strategy should be used, understanding what weapons in your arsenal can be used and utilized is crucial. Deploying a positive strategy demonstrates a firm's willingness to improve its perceived advantages in the eyes of the customer, the aim is to retain customers. If opting for an inertial strategy, actions are instead taken towards delaying a customer’s switch. The firm has come to understand that customer switches are inevitable and tries to put brakes on the rate of customer loss by laying out the potential benefits lost in switching. The two strategies are both classified as strategies that build upon a firm’s strengths. Compared to parity strategies that aim to mitigate competitor advantages and retarding strategies that emphasize the minor advantages gained in a switch. These two strategies draw upon weakening the competitor's perceived strengths (Roberts, 2005).

In the exemplified case of Telstra in Roberts’ (2005) study, a retarding strategy was shown to be exceptionally effective. A fear of customers leaving for the new competitor and acknowledging that some customers inevitably would switch, Telstra tried to delay that process by launching an advertising campaign with a promise to improve their services and address issues customers were not happy with. An improvement in communication was later deemed to be key in keeping their market share. This strategy can be well connected to the fourth dimension of DMS, complaint management, by Heriyati et al. (2010). Furthermore, increasing satisfaction and addressing complaints is linked with loyalty (Aaker, 1997;

Fournier, 1998). An inertial strategy described by Roberts (2005), can play on its own

strengths to delay the customer-switching process. A good example is to play on the strength

of being a domestically grown company versus a new foreign market entry. Creating the

feeling of “promoting a home-grown company” and building the brand (ibid.). Generating

positive consumption emotions has proven to directly positively affect satisfaction and loyalty

(Hawkins & Mothersbaugh, 2010).

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2.2.3 Diving deeper into DMS & new market entries

As previously established there are various categorizations within DMS, while some authors have chosen to focus on new market entries and how an incumbent can defend its position in the market (Timmor et al., 2009; Gatignon et al., 1997; Xie et al., 2017).

Timmor et al. (2009) has outlined a clear timeline of the different entry phases of a new market entry. The entry phases are, lining up; when the competitor prepares to enter the market, entry; when the firm enters the market, expansion; when the firm starts gaining market share and acquiring other firms, and entrenchment; when the firm has established a dominant position in the market and most domestic firms, are now smaller in size relative to market share.

Timmor et al. (2009) provide three common strategies that a new firm can compete with.

These are better products, lower prices, and a global brand. Finally, they conclude that a domestic firm has three options when a new firm enters their market: Fight, join or flee. The certain strategy recommended depends on the phase and the competitive advantage of the new entry (see figure 2). Xie et al. (2017) present three different ways of response with new market entries: accommodate (decrease), retaliate (increase), or neutral (no change) in expenditures on their marketing mix variables.

If the advantage is the product Timmor et al. (2009) recommend fighting with technological improvements in the lining up phase and with improvement in customer service and price competition in the entry phase. Fight with price reduction becomes a strategy in every phase if the advantage is lower prices. Price reduction is seen as an effective strategy against a new market entry to retain market share and if the market is uniform it will also increase profits (Hauser & Shougan, 1983; Kumar & Sudharsa, 1988; Bell & Carpenter, 1992). Bell and Carpenter (1992) state that firms should analyze what is the priority. If it is to retain market share and aggressive price reduction is recommended. If the priority is to retain profits a smaller price reduction is still effective (Bell & Carpenter, 1992). Gatignon et al. (1997) give an opposite idea, that price reduction is not an effective way to compete with a new firm. One of the explanations for this is that it gives the impression that the firm could have given lower prices before leading to bad faith from their current customers. Balachander et al. (2010) argue that selling products in bundles or cross-selling with discounts is an effective DMS as it increases both profits and maintains market share. A profit basis is that the discounts are implemented on products with high profits, promoting sales for those products. This strategy also can increase loyalty among customers only loyal to some products, bundles can create loyalty for more products. Balachander et al. (2010) continue and comment that firms with significant data on their customers can tailor these bundles directly to each customer to optimize the results.

Alongside price reduction, Timmor et al. (2009) recommend fighting with brand

differentiation and join in terms of product agreements in lining up, entry, and expansion. If it

is a global brand they recommend joining in terms of brand licensing and a joint venture in

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lining up, entry, and expansion. Fight is possible by improving your brand, mainly brand image and variation (Timmor et al. 2009). If the new market entry has made it to the entrenchment phase, meaning that they have become the dominant firm in that market the only recommendation is to flee by targeting a niche market (Timmor et al. 2009).

(Figure 2: Defensive marketing strategies by Timmor et al. (2009))

The idea of adopting a niche strategy is something that was discussed by experts before Amazon entered the Swedish market (Redaktionen, 2020). Xie et al. (2017) also tap into the notion of how incumbent firms (generalist and specialist firms) can defend their position against new market entries. First and foremost, the incumbent firm must have a comprehensive understanding of the competitive environment and the new entrant before initiating a response strategy. It is concluded that specialization firms tend to have greater success when new firms enter their market. Customer relationships are mentioned to be critical in gaining advantages over competitors. It is suggested that if relationships between the incumbent firm and its customers are weak, a new entry will likely capitalize on this asset in the market. Strong customer relationships are connected to loyalty (Aaker, 1997; Hawkins

& Mothersbaugh, 2010), as loyal customers make repeated purchases a firm's profitability

will be influenced positively (Xie et al., 2017). It is expressed that defensive strategic actions

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taken as a response by incumbent firms against new market entries are not always in line with research. Therefore it can decrease the chances of successful strategies (Holtrop et al., 2015).

When it comes to regaining customers Johnson and Selnes (2004) provide an interesting perspective that a firm should put a lot of effort into less loyal customers (acquaintances) since they make up the base of the customer portfolio. The authors use the phrase: “a leaky bucket may generate more value than a tight one” (Johnson & Selnes, 2004 p.15). DMS is becoming more profitable for companies, therefore making building and enhancing long-term relationships with customers should be a priority, i.e. building customer loyalty (ibid.).

2.2.4 Building brand equity as a DMS

Loyalty is one of the outcomes of strong brand equity (Aaker, 1992). Aaker (1992) describes brand equity as the value of the brand itself, where a set of assets and liabilities is connected to a brands’ name. The term can be described as a combination of 5 attributes, with no attribute weighing more than another; brand loyalty, name awareness, perceived quality, brand associations, and brand assets (Aaker, 1991). Loyalty can especially create more awareness of the brand, reassurance of the brand, and most importantly time to respond to competition (ibid.). Keller (2008) follows a similar path by stating that brand equity is the value embedded into a brand, with strong and unique associations linked to strong brands. However, the key difference is that Keller sees brand equity as something determined by consumers, the associations to a brand consumer’s have in their head. Known as customer-based brand equity, CBBE. If consumers hold favorable associations towards a brand, a positive CBBE is established. Keller (2008) emphasizes the importance of brand knowledge in creating strong CBBE and ultimately competitive advantages. This is done by creating strong and unique associations to stand out from the competitors, i.e. unique and superior services or products in the minds of the consumers. In uncertain times increasing CBBE is described to be something critical to focus on (ibid.). Implementing actions that increase CBBE is not enough without efficient marketing communication. Research suggests that there is a correlation between marketing communication and brand equity, making it critical to strategize efficient marketing communications to increase brand equity (Mongkol, 2014).

However, the research connecting brand equity with DMS is limited. Choi’s (2017) research connects the two areas and argues that building a premium brand, i.e. unique brand associations, should be the first line of defense against a new market entry. It is argued to be more effective than aggressively cutting prices while simultaneously benefiting resellers that sell the branded products. For private brand owners increasing the brand equity will benefit partnerships with resellers (ibid.).

2.2.5 Analytical model

Amazon is a global firm that entered Sweden, which was a new market thus making it

important to acknowledge the new market entry theories. Looking at the study by Timmor et

al. (2009), Amazon can be argued to be in the entry phase, and probably moving towards the

expansion phase (Bränström & Wisterberg, 2021). It is further argued for incumbent firms to

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identify the stages and strategic focuses and initiate strategies depending on where the new market entry is present. Entry phases: lining up, entry, expansion, and entrenchment. Strategic focus: global brand, better product, lower prices. (Timmor et al. 2009). As it is argued that the entry phase and strategic focus are important variables for incumbent firms while strategizing, the Y-axis (strategic focus) and X-axis (entry phase) of Timmor et al. 's (2009) original model is directly applied to the study’s analytical model. It is important that the resulting DMS from the findings are put in context of why and when they are implemented, due to what competition (strategic focus) and what stage (entry phase) that triggered them. This will form the basis of the analytical model.

There are extensive theories surrounding what DMS should be used, but not many take into the account of when, i.e depending on the entry phase and strategic focus. The intent is to structure the existing DMS of Swedish eCommerce businesses into the analytical model that takes time phase and strategic focus into account. Simply put; the empty space in the table will be filled with the DMS found in the empirical findings. See figure 3.

(Figure 3, analytical model)

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3. Methodology

The chapter begins with presenting the chosen research method and why it fits the study and how the work relates to it. It is followed by a description of how the empirical material was collected, the choice of respondents, and the conduct of the interviews. Furthermore, transcription and method analysis is presented, where it is described how and why it was performed with the support of the theory. The section concludes with operationalization and the ethical aspect of the study.

3.1 Research design

This study aims to understand what types of defensive marketing strategies Swedish eCommerce have or will implement, as a result of Amazon’s entry into their market. A qualitative approach is considered appropriate since it will steer the study in a way that will lead to an understanding of the processes, meanings, and concepts of the defensive marketing strategies that the organizations have used (Bryman & Bell, 2013). A qualitative approach is especially fit for purposes that aim to investigate matters with a complex nature, where there is no single answer to the problem (Cassel et al. 2006; Bryman & Bell, 2013). In addition, the chosen approach allows the study to gain a deeper understanding of the studied phenomenon, where the focus is on descriptions and meanings of what DMS is used (Andersen 2012; Hyde, 2000).

A qualitative approach also allows the study to ask questions to the eCommerce businesses that will create an understanding of the different processes behind the defensive marketing strategies that the firms use (Bryman & Bell, 2013). Qualitative interviews have been chosen to get in-depth responses from the respondents (DeMarrias & Lapan, 2003). Each respondent will be unique and each interview will be unique. A qualitative approach allows the interviewer to tailor questions to fit the current interview which will lead to a better understanding of the unique respondent’s experience (ibid.).

3.2 Research approach

A deductive approach has been chosen due to the existing defensive marketing theories. The study aims to understand the defensive marketing strategies used by Swedish eCommerce businesses. The study does not aim to create new theories, rather uses the existing theories of defensive marketing strategies and new market entry to guide the research through the phenomenon that is studied (Bryman & Bell, 2013). To our knowledge, no prior studies are investigating Swedish eCommerce businesses in conjunction with DMS and new market entry theory, thus making it an unexplored phenomenon. The deductive approach can be seen in the creation of the theoretical framework that later formed the interview guide, and, lastly, laid a basis for the analysis of the study’s findings. i.e. going from theory to reality (Rienecker &

Jörgensen, 2002). The study will therefore investigate if the previous theory is still relevant

and can be used in understanding the Swedish eCommerce landscape (Bryman & Bell, 2013).

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3.3 Data collection

3.3.1 Semi-structured interviews

The study’s empirical findings are collected from semi-structured interviews with the respondents. This method is characterized by open-end questions that stimulate conversations, and by its nature is known for being flexible and a great method for collecting qualitative data for an in-depth understanding of the research area. The advantage of having a semi-structured nature is to enhance the feeling of having a dialogue and allowing the respondent to speak freely in a reasonable way that is connected to the thematic areas the study aims to investigate. Closed questions as in a structured interview or in some cases a questionnaire, may leave important information out (Bryman & Bell, 2013). In contrast, unstructured interviews allow the respondent to fully control the direction of the interview, and areas that need to be touched may not be covered and relevant information may be missed out.

Semi-structured interviews were therefore seen as the most appropriate method for the study, as it aims to investigate what defensive marketing strategies Swedish eCommerce businesses have used. To be able to have a deep understanding of the studied phenomenon, an interview guide was made with questions covering theoretical areas (see table 2: operationalization), while leaving room for discussion and follow-up questions. Furthermore, a semi-structured nature allows new questions to be asked along with the conversations depending on each situation, making each interview unique (Jacobsen, 2002; Alvehus, 2013). Individual interviews with each respondent were considered the most appropriate for the study, in terms of enhancing the feeling of a conversation but also eliminating the chance of sensitive organizational information being shared (Bryman & Bell, 2013).

Semi-structured interviews were conducted via Zoom, an online video conferencing service.

This was a result of the ongoing covid-19 pandemic and due to the nature of not being able to have physical meetings which was the initial goal. Physical meetings are considered superior in creating bonds and closeness between the interviewer and the interviewee, a better understanding is generated of the studied phenomenon through for example body language (Bryman & Bell, 2013). For this study, a video conference call was decided to be the best option in the current situation, by enabling authors to still see the body language of the respondent without having the meeting physically.

3.3.2 Selection of respondents

Three interviews were conducted with respondents who had knowledge about their respective

organizational strategies, this was due to time constraints for the researchers and many of the

contacted respondents declining. There is no right or wrong in the size of the sample in

qualitative research, what determines it is time and the information gained (Bryman & Bell,

2013; Malterud et al., 2016). The choice of having three interviews was also a result of them

being comprehensive and time was instead put on transcribing and analyzing the findings. As

the findings should not be generalized to markets, rather show what Swedish eCommerce

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businesses have strategized, a small sample could therefore be enough. It is important to emphasize the importance of interviewing respondents that can provide relevant information for the study’s purpose with valid answers. Each respondent had good representation in the research area, i.e. either working with setting organizational strategies or having sufficient knowledge of the Swedish eCommerce strategies. It was also important for the study to interview individuals who either were active or recently been active in strategy planning, as Amazon launched in late 2020. This was further a requirement as a way for the study to gain relevant contributions from knowledgeable respondents (Olsson & Sörensen, 2011; Bryman

& Bell, 2013; Grisham, 2009).

The interviews took place between the dates 31-03-2021 and 23-04-2021. In the case of finding relevant respondents, convenience and snowball sampling have been used as methods.

1 out of the 3 respondents was selected through a convenience sample, i.e. a selection method that is based on accessibility and a respondent that is easy to find. Initial contact was made with one of the authors’ previous workplaces, who later went on to be the first respondent.

Respondent 1 referred to other suitable respondents, known as snowball sampling. A known disadvantage of both convenience- and snowball sampling is the possibility of selecting respondents with no sufficient knowledge in the field of research, thus not contributing (Polit

& Beck, 2012). However, all respondents that were selected had to fulfill the requirement of knowing organizational strategies, thus, the chance of selecting insufficient respondents was considered slim. 2 out of the 3 respondents were selected through a snowball sample.

3.3.3 Interview process

The initial contact with the respondents was made through e-mail to introduce the study and its purpose. Specific time and date for the interview were mutually decided upon an agreement of the respondent to participate. At the beginning of each interview, the respondents were asked by the authors for permission for the interview to be recorded.

Recordings are critical for the data analysis as it facilitates the transcription (Sunders et al, 2016). By informing that the recordings would only be used for the study and to be able to correctly quote them led to all respondents giving consent to record. However, some studies suggest recording of interviews may be harmful, as respondents may feel restricted in their answers (Bryman & Bell, 2013; Engdahl et al., 2010). The need of being transparent and to conduct an in-depth analysis with transcribed material was decided to outweigh the cons.

It was also informed that real names would not appear in the study and that each respondent would receive a copy when the study was completed. The interviews were held in Swedish, the native language of the authors and the respondents, after carefully outweighing the pros and the cons. The main argument was to create a safe environment for discussion rather than a formal questioning, for the respondent to be comfortable in fully expressing themselves, as Bryman and Bell (2013) describes. The interviews lasted between 30-45 minutes.

Each interview began with basic questions that served as an introduction, to create and

establish an open and safe environment for discussion and to guide the respondent on what to

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come (Qu & Dumay, 2011; Bryman & Bell, 2013). It is important to emphasize that some of the introduction questions do not have any direct connection to the study's chosen research area. The questions were asked to get a better picture of each respondent's background and to lay a basis for the coding process, by being able to categorize the answers to each respondent (Bryman & Bell, 2013). The questions that followed after the introduction were based on the work's operationalization process and the interview guide that covered three main theoretical areas. This was done to gain an understanding of what DMS Swedish eCommerce businesses have used. Follow-up questions such as: “can you elaborate on that?” and “what do you mean?” were frequently used to open up the respondent and to gain an even deeper understanding of what was being said.

Interview with

respondent

Respondents’

position

Date Length of

interview

Size of the firm

(employees)

Business

R1 Partner 2021-03-31 45 min 20+ Digital

Marketing Consulting Agency

R2 COO 2021-04-13 45 min 30+ Digital

Marketing Consulting Agency

R3 CEO 2021-04-23 30 min 15+ eCommerce

Office Supplies

(Table 1, interview respondents)

3.4 Operationalization

It is considered that some basic and leading questions are necessary to keep the respondent within the chosen research area while leaving room for further discussions (Bryman & Bell, 2013). As a result, operationalization of the interview questions based on the work's theoretical frame of reference has been made. This is to make the interview questions relevant to the purpose of the study and to draw clear theoretical connections to them.

The questions in the interview guide will act as a tool while conducting the interviews and can

be considered a short memory list of areas that will be addressed under the semi-structured

interviews (Ibid.). The interview guide eliminates the possibility of the authors solely relying

on spontaneous abilities that potentially could have been harmful. The interview guide

consists of four questions, only the most central and relevant questions for the study’s purpose

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were chosen as it is argued that there should not be too many predetermined questions in a qualitative interview (Trost, 2010). Each question captures different theoretical areas.

Questionnaire Linked Theory

Introduction -

How will/have Amazon affect the Swedish eCommerce landscape?

-

Q1 What factors do you believe Amazon

will compete with? Competitive advantages of a new entry (Timmor et al. 2009) - Q1 captures anticipations and related threats to Amazon’s market entry, thus going into perceived competitive advantages and obstacles that may need to be assessed Q2 What strategies have you implemented

to combat Amazon? Defensive marketing strategies (Heriyati et al. 2010) - Q2 aims to give an understanding of what defensive marketing strategies have been implemented to combat Amazon.

Q3 When did you implement these strategies?

Phase of market entry (Timmor et al. 2009) - Q3 incorporates the aspect of time by being able to categorize the actions on a timeline.

(Table 2, interview guide)

3.5 Data analysis & coding

Both authors conducted the coding, as suggested by Berends and Johnston (2005), as a way to ensure no relevant information would be missed out and to have the benefit of both authors' perspective being present as well as the opportunity for discussing the coding (ibid.).

Thematic analysis is an appropriate coding method to analyze empirical findings collected through qualitative research (Bryman & Bell, 2013). A thematic approach aims to identify themes, notions, and topics relevant to the study in unstructured data. It is argued to be a flexible approach to discover subjective meanings in the respondent’s answers (Bryman &

Bell, 2013). For this study, a thematic analysis is conducted to gather an understanding of the defensive marketing strategies that Swedish eCommerce use.

When conducting a thematic analysis it is important to frame the case, for this study each case

is a respondent, by developing a short description of each case that is described to be the

motto of the case. The description should be connected to the research question, for this study

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it will be a description of each respondent’s background related to the research question and the central topics mentioned by the respondent about the research topic (Flick, 2009).

When first starting thematic coding it is important, to begin with, a deep analysis of each case to allow the coders to extract the relations the respondent has to the research topic. After this, the development of categories for each case will be possible. Developing categories that the respondent shows but are not related to the research topic should be done to develop thematic domains and categories for the single case. It is possible to cross-check these categories when analyzing a single case. Cross-checking will lead to better comparability of the cases. (Flick, 2009)

The analytical model (Figure 3) will be used to analyze the empirical findings. The coding is divided into three dimensions, listed below, to keep the context within defensive marketing strategies and new market entries. Three dimensions developed from theory: time frame, competitive advantages, strategy. Data from each interview will be analyzed through the dimensions to find thematic categories. The most common and relevant categories for the study’s purpose are presented under each dimension.

3.5.1 Dimension 1: Time frame

The analysis will identify the time frame of when a decision about a strategy was implemented. This is based on the Timmor et al.s’ (2009) entry phase, as time is an important aspect for when strategies are implemented.

During the coding, three categories were found in this dimension. The first was foresight which is what the firms believed Amazon would do before they had entered and the strategies that the firms implemented before the entry. The second category was after entry, this was the discussion about what happened after the entry, the strategies used by both Amazon and Swedish eCommerce firms implemented after the entry. The third was the future, mainly about the future potential of Amazon and what they possibly can do.

Foresight After entry Future

3.5.2 Dimension 2: Competitive advantage

The competitive advantage from Timmor et al. (2009) will also be used to categorize what they believe is Amazon’s competitiveness. There were two categories created during coding.

competitive advantages, the advantages Amazon has now, potential advantages and what advantages Amazon could bring to the Swedish market.

Competitive advantages Potential Advantages

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3.5.3 Dimension 3: Strategy

The five dimensions of DMS by Heriyati et al. (2010) will be used to categorize the defensive marketing strategies respondents have used. Different categories were also found with the help of Aaker’s (1993) brand equity model and Timmor et al. 's (2009) theory of DMS.

There were five categories found in coding based on the type of eCommerce firm. These are Price, Customer Experience, Brand Equity, Join, and Customer retention. In the coding there was a clear difference in strategy within these categories between brand owners, companies owning and producing one brand, and multi-brand resellers, companies mainly selling other brands that they do not produce.

Price Customer Experience Brand Equity Join Customer Retention

3.6 Ethical aspects

To deliver a thesis that is ethical and moral is a responsibility of the authors, and is especially important in qualitative research (Bryman & Bell, 2013). This has been a vital aspect of the study, as confidentiality and anonymity have been the point of departure in each interview.

This was notified to each respondent before starting each interview together with a description of the research aim. Furthermore, it was described that the information retrieved would be for research purposes for this particular study only with no modification under any circumstances, apart from translation. It is a way to eliminate the risks of leaking confidential information but also for the respondent to feel safe in fully expressing themselves. Permission was taken for an audio recording of the interviews, to be able to correctly quote the respondents and to be able to make an in-depth analysis. Participating in the interviews was made sure to be voluntary and the respondents were provided the ability to withdraw at any stage of the study (Creswell & Creswell, 2017). The ethical considerations presented to the respondents created a mutual understanding with the authors to gather information.

3.7 Method discussion and reflection

The study is based on a small sample size, which makes it hard to generalize to other markets.

However, the intent of the study’s findings was not to be generalized to other markets than the Swedish.

As mentioned earlier while presenting the respondents, two of them have a background in digital marketing agencies (R1 & R2) and one operates in an eCommerce business (R3).

Interviewing knowledgeable individuals in digital marketing agencies gave the study a broad

view of eCommerce businesses as each agency deals with over 30+ eCommerce clients. It can

be argued that the benefit was the ability to keep the sample size low while gaining

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comprehensive knowledge from the respondents from digital marketing agencies. However, after doing all the interviews, it became clear that despite gaining a comprehensive overview of their respective client base, the potential drawback that arose was the lack of in-depth details. Comparing the interviews with R1 and R2 with R3, it was evident that R1 and R2 seemed to avoid going into details of what a single eCommerce in their client base had done/will do in the future. Despite the potential drawback of gaining less information from single eCommerce businesses, the benefit of retrieving information from a broader perspective was deemed to be key in finalizing the study.

By having each interview in Swedish, it resulted in the transcription and interview guide being in the same language. This was later translated into English, thus causing the quotations not to be translated word by word, rather enticing the same meaning.

Digital interviews were firstly chosen due to the covid-19 outbreak but convenience was also a factor. It was difficult to find respondents for this study and without the convenience, it could have been even harder. The convenience aspect of online interviews is also shared by Janghorban et al. (2014) saying that online tools give respondents that have a place or time limitations the opportunity to participate in face-to-face interviews. The respondents of this study were able to take a break from work or other activities and join the interview with a press of a few buttons. This also provided the respondents an easy way out of the conversation by just clicking a button, if they wanted to withdraw (Janghorban et al. 2014).

Online interviews can also provide software for recordings (Janghorban et al. 2014). The audio could easily be recorded and extracted to the coding just a few minutes after the interviews were conducted. There is the relative anonymity of online interviews that leads to less personal conversations compared to real-life (Bargh, McKenna, & Fitzsimons, 2002;

Ellison, Heino, & Gibbs, 2006). However, with the addition of a webcam, the respondents were visible and common body language was visible for evaluation. Sullivan (2012) argues that online interviews provide the same authenticity as real life due to the impression management process being visible through webcams. One drawback of online interviews noticed by the authors, during the interview process, was the difficulty to read the room. Due to either delay or difficulties reading pauses from the respondent, a follow-up question was sometimes asked before the respondent was done with answering the previous question.

Upon reflecting on the interview process, additional respondents would have given an even

more comprehensive view of the Swedish eCommerce landscape. However, due to the given

timeframe, it was decided that three respondents were enough since two had a background in

digital marketing agencies.

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4. Empirical results

A brief introduction of the study's respondents opens this chapter. The companies and each respondent are presented anonymously in the study to preserve the agreed anonymity. The three dimensions created from the theoretical framework create the headlines for the chapter;

time frame, competitive advantage, and strategy output. The dimensions are further narrowed down into categories that were common notions amongst the respondents. The categories were found in the empirical results.

4.1 Dimension 1: time frame

To gain an understanding of the dimension of time frame, i.e. when strategies by Swedish eCommerce businesses were initiated, the area was covered in the interview guide. The common notions connected with the aspect of time by the respondents are further categorized into the categories below. Categories are as follows: foresight, after Amazon’s market entry, and future.

4.1.1 Foresight

The Swedish eCommerce sector is described by the respondents to be developed, and a foresight has resulted in the entry of Amazon not creating strong reactions among eCommerce businesses. This is implied by R1: “I would say that most reactions came before their entry, You could say that there has been a foresight”. One of the reasons described, by R1 and partly by R2, is the Swedish eCommerce sector being developed. R1 claimed: “Looking at Sweden, yes, we have a very well developed eCommerce sector”. R3 implied that their firm has not changed anything and showed no current fear of Amazon: “We have been well prepared for Amazon. The strategies we use are well customized to handle Amazon”.

4.1.2 After Amazon’s entry

It is described by both R1 and R2 that there has been a reaction, although not being an extensive one. R1 describes the reaction in three departments that became evident after Amazon's market entry. Further, it is described that the three departments have always been important for businesses but has since Amazon’s arrival seen a tendency: “I think they have been accelerated or so call it sped-up - R1”.

“I believe that the focus to provide the right price, quick deliveries, and have a really good customer experience, that focus has eventually gotten larger since Amazon entered. “ - R1

According to R1, no new strategies seem to have been implemented after Amazon’s entry.

The three departments mentioned, are areas many businesses are already focused on and are

also described to be Amazon’s biggest competitive advantages. However, R1 experienced an

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acceleration after the entry. This reaction was not massive and is in a more speculatory nature.

R2 describes a similar view but the increase of focus has instead been on consumer experience and handling consumer data.

“I think it has been an ongoing process...but it has probably become a little more focused since the official date of launch was set.” - R2

R3 expressed that no actions had been taken upon Amazon’s entry as their strategies were seen to be competitive enough: “Since their entry, we have not changed anything in our strategies, it was not needed”.

4.1.3 Future

The respondents spoke about Amazon's potential “I believe that Amazon has a few cards left to play - R2”. The language used when talking about certain strategies was in the future tense, countering what Amazon potentially could do in the Swedish market. R1 spoke about the strategies that Amazon could launch “Prime is Amazon’s competitive advantage, if they successfully launch it in Sweden they will be able to offer a membership that no one else can offer - R1 ''. R3 mentioned that they fear that Amazon might start to focus on B2B, as they operate towards both B2C and B2B: “If Amazon starts to focus on B2B it will be more difficult for us, but even then, we do not plan to change anything strategy-wise - R3”.

The common notion among the respondents within the future category is heavily connected to Amazon's future rather than what Swedish eCommerce businesses are doing for the future.

4.2 Dimension 2: advantages

Dimension 2 aims to outline the competitive advantages that Amazon has or will have over Swedish eCommerce chains, according to the respondents. It became clear that some of the advantages mentioned are not yet fully realized or implemented by Amazon, and are based on Amazon’s previous successful market entries.

4.2.1 Competitive advantages

Both R1 and R2 implied that Amazon possesses competitive advantages as a brand. However, R2 claimed that “Amazon's current position in Sweden is currently rather weak, but looking globally they are a successful brand”. Amazon was described by all the respondents to be an international eCommerce giant that everyone knows about.

Three factors mentioned by R1 that are seen as their main competitive advantages was:

“Having the lowest price, best customer experience on the website

and superior deliveries. Amazon is so damn good at those three

factors, and to not be outcompeted you have to be competitive in those

three specific factors. “ - R1

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R2 was, in this matter, more generalized and described Amazon as “incredibly good at creating incentives for repeated transactions and eliminating purchase barriers”. It is claimed by both respondents that Amazon aims to be the go-to platform and wants to be known for having the best price, the best experience, and the fastest delivery. According to R3: “Amazon has said that they will not compete on price, but on the product range. We will do the same”.

R2 claimed that Swedish eCommerce has come such a long way and is well developed. Most consumers have strong relationships and good experiences with eCommerce brands, both resellers and brand owners that are trusted.

4.2.2 Potential advantages

One way to reach the goal of becoming the go-to platform is through their Prime membership, this was mentioned by both R1 and R2. They mention that if Amazon can provide the same benefits of a Prime membership in Sweden, as they do in other countries, they probably would have a loyal customer base that “uses the website almost as a habit - R2”. R2 further claimed: “The 2 hour delivery for prime users that they provide in the US is extraordinary, but seems unlikely to happen here soon.” However, since Amazon has other services e.g Amazon Video and Amazon Music, they can leverage these services to attract Prime members. It is agreed by the two respondents that Amazon’s other services are strong in providing a more attractive membership than most other eCommerce chains. Provided that Prime membership would be launched in Sweden. All respondents claimed Prime to be the biggest threat by Amazon. Exemplified by R3: “Their biggest threat is prime”

Prime is described to be critical, R2 puts it: “if Prime succeeds then I believe that Amazon will”. Furthermore, a large corporation such as Amazon is described to have the financial power to create their own content: “they create tv shows, movies, music, etc., similar Swedish firms can not do it in such a way. That type of USP is very difficult to compete with, so you have to find something else - R2.” R3 indicates that prime is a potential threat but the process for it to be successful might take time: “prime membership is a threat if they are willing to go with a loss for a while”.

4.3 Dimension 3: strategies used

Dimension 3 refers to what strategies Swedish eCommerce businesses have implemented to combat Amazon’s entry, i.e. to maintain their market share. Important to note, R1 and R2 divides eCommerce into two categories, resellers, and brand-owners, it is implied that there are differences in the strategy output between them.

4.3.1 Price

Competing with the price is a strategy mentioned by the respondents. R3 claimed, “We’re

always trying to provide a low price”. However, they say that competing with the lowest price