Imagine you're a student who's struggling with calculus. You turn to the internet for help and stumble upon online tutoring companies that promise to provide personalized support in real-time. You sign up for Chegg, one of the most popular online tutoring services and start attending virtual classes and interacting with tutors when you receive an email alert from a competitor, ChatGPT.
Curious, you click on the email and are directed to ChatGPT's website, which offers a similar range of services to Chegg but has one crucial difference: a lower subscription fee than Chegg.
Unfortunately for Chegg, you and many other students like you decide to switch to ChatGPT, resulting in a significant decrease in Chegg's new customer growth rate.
This scenario is becoming increasingly common in the online tutoring industry. Chegg, which had been steadily growing its subscription base before ChatGPT's arrival, saw a decline in the number of new customers it attracted, leading to a significant drop in its stock price. Chegg's stock has declined by more than 20% over the past month due to ChatGPT's arrival.
Chegg's case is not unique. Many other companies have fallen victim to the arrival of new players in their industry.
One recent example is Blockbuster. Once the largest video rental chain in the world, Blockbuster became obsolete with the arrival of Netflix. Netflix's streaming service offered a more convenient and affordable alternative to traditional video rental stores, leading to Blockbuster's eventual bankruptcy.
Another example is Kodak, which failed to adapt to the rise of digital photography and was eventually forced to file for bankruptcy in 2012.
The lesson here is clear: companies that fail to adapt to changing market conditions risk becoming obsolete. With the rapid pace of technological innovation, it's more important than ever for companies to be agile and adapt to new competitors and customer preferences.
Online tutoring companies, in particular, need to be aware of the threat posed by new players such as ChatGPT. They need to differentiate themselves by offering unique value propositions and stay up to date with industry trends to remain competitive in the market.
In conclusion, Chegg's decline is a cautionary tale for companies in the online tutoring industry and beyond. It shows the importance of being proactive in responding to new threats and adapting to changing market conditions. With the right strategy and mindset, companies can stay ahead of the competition and continue to thrive.
Akash Mittal Tech Article
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