1-Based on the data from the case use the frameworks from the chapter and analyse the resources and capabilities of Rocket Internet:

a. What are its resources and capabilities?

b. What are its threshold, distinctive and dynamic resources and capabilities?

2-Based on your initial analysis and answers to question 1, carry out a VRIO analysis for Rocket Internet. What do you conclude? To what extent does Rocket Internet have resources and capabilities with sustained competitive advantage?

3-What is the importance of the Samwer brothers? What would happen if they left or sold the company?

Rocket Internet is a very successful Berlin-based start-up incubator and venture capital firm. It starts, develops and funds e-commerce and other online consumer businesses. With over 700 employees and an additional 30,000 across its network of portfolio companies, the firm has helped create and launch over 100 start-ups and is currently active in more than 70 companies across more than 100 countries.

The company was founded by the Samwer brothers, Alexander, Oliver and Marc. After going to Silicon Valley in the late 1990s they became inspired by the Californian entrepreneurial culture and especially eBay. The brothers contacted eBay offerring to create a German version of the online auction house, but they received no reply from eBay. Instead they launched their own eBay clone, Alando. A month later they were acquired by eBay for $50m (£30m, €37.5m). This was to be their first great online success, but far from the last.

Next the brothers created Jamba, a mobile phone content platform. It was sold to VeriSign, a network infrastructure company, for $273m in 2004. Since then they have become experts in spotting promising business models, especially in the USA, and imitating and scaling them internationally quicker than the originals. This model is the basis of Rocket Internet, which was founded in 2007 and stock listed in Germany in 2014 valued at $8.2bn. Several of their ventures have been acquired by the company with the original idea (see Table 1 ). Two of their most high-profile ventures after Alando were CityDeal, which was sold off to American Groupon, and eDarling sold to American eHarmony.

The company has frequently been criticised for simply being a copycat machine without any original ideas, and some have even claimed it is a scam that rips off the originals. However, the question remains: if Rocket Internet has been so incredibly successful and what it does

is simply copying, why has no one successfully imitated Rocket Internet yet? The brothers, through Oliver Samwer, defend their model in Wired: 1

‘But look at the reality. how many car manufacturers are out there? how many washing-machine manufacturers are there? how many Best Buys? Did someone write that Dixons copied Best Buy, or did anyone ever write that Best Buy copied Dixons, or that [German electronics retailer] Media Markt copied Dixons? No, they talk about Media Markt. They talk about Dixons. They talk about Best Buy. What is the difference? Isn’t it all the same thing?’