Amazon Case Syudy

AMAZON. COM Q. 1 A. Analyze amazon. com victimisation the competitive forces and hold dear stove models. Five competitive forces shape fate of firm fit to Porters Five Forces Model, in my opinion, contender has increased all over only as a result of the meshing and e-Commerce. The internet and IT has made it possible to both snap on the top and bottom lines and market shargon is expanded and be are cut. Many overlaps and swear outs exist just online, major companies leave gone online to successfully augment the brick and mortar corporations, and the playing field is all the way to edges of cyberspace, wherever that is Traditional competitors amazon has strong competitors like online sell stores and a large number of physical stores(Books, Grocery,Electronics,Video games etc). Examples Barnes & Noble, Inc. , Wal-Mart. com USA, LLC (privately held), Catalog & Mail put up Houses High As search engines are becoming the first survival for consumers when shopping on-line e. g. Google. This increases the opportunities for other(a) retailers. High thither is an increasing do of dotcom companies due to the little capital needed to start up. Smaller street corner affiliate online stores when combined create even more competition novel market entrants Threat of sensitive entrants is high when it is easy for new competition to enter the market. As the technology is increasing and facilitating the business concernes more and more so it is becoming easier for any business to start online retailing operations. scurvy For online naturalised retailers a strong brand estimate generates consumer trust. Low Economies of scale Retailers that engage refined technology and processes and are able to buy in deal toilette offer the lowest prices. This is a major competitive expediency as there is oftentimes choice online.Low Strong hold appear in the online retail industry gives e-retailers advantages in terms of cost and guest loyalty. High Capi tal requirement entry is a low for online businesses as cost of lease premises is minimal. Substitute products and services High sensual stores and touch, feel, hear factors. High Renting products online instead of buying them is increasing in popularity. This is a major concern for virago in their book sales as online retailers such as Textbookflix. com and BookRenter. com are providing much cheaper options than buying.High The internet is a spheric Market, consumers can substitute any product by purchasing from companies overseas where products are cheaper, but of slap-up quality. Low Catalogue/mail order although non as popular lull a substitute to online buying. Customers/Buyers High There is a large miscellanea of online shops and comparison websites to compare best prices. Buyer power is higher when buyers keep more choices. Businesses are forced to add look on to their products and services to achieve loyalty. Many loyalty programs include excellent services th at customers demand on-line.Customers insufficiency to solve their problems and many times they are more successful on-line than on-phone. Also, we see internet savvy businesses springing up offering more of import goods and services at lower costs. Now with the advent of eBay, many passel are assuming roles as drop shippers. Individuals can engage a thriving business selling goods of larger companies without having to carry inventory. Suppliers Low For standardise products that are easily on tap(predicate) supplier power leave behind be low. High Specialized products and brands increase switching costs for buyers so the suppliers have higher power.With Amazon products such as the Harry Potter books are exclusive from publisher. High Online shops making it easier for publishers/ brands to sell directly to consumers without a one-third party (e. g. Blackwells), suppliers may not need Amazon. High If there is a concentration of suppliers for certain products in the industr y rather than fragmented. Low Global merchant marine has increased the amount of suppliers available. Value Chain The value chain analysis undertaken examines the operational effectiveness of activities that enable Amazon. om to perform better than its competitors. Amazon. com configures its value chain activities to create unique value for customers, reduce its costs of carrying out these activities and reduce the cost of its customers transactions. SUPPORT ACTIVITIES Firm Infrastructure Huge key customer data warehouse available to all business units. central planning function. Amazon. com has a single Technology platform with services universe incrementally distributed to other worldwide locations, thus diminution costs by supplement enthronizations. Human Resource Management Amazon. om offers employees unique benefits such as medical, stipendiary time off and entrepot grants and relocation allowances. Such a system means warehouses could be located in economically che aper areas yet these benefits can attract highly skilled workers. For modelling in Kentucky, Amazon. com offers a comely rate of pay of about $11 $12 thus minify cost of labour. Amazon. com sources expertise from highly experienced workers from other competitors such as Walmart. Technology Development High investments in technology development to leverage new but unknown opportunities in digital sales of music, books and goggle boxs.For example being able to quickly digitize media for direct online sales/ transfer or for Search inside the book service. Using standard computer hardware systems from HP to reduce cost of maintenance and compatibility Building an IT scheme, IT infrastructure and data Centre on Linux open source software thus reducing cost of technology development. Renting computing resources to other companies reduce gist cost of Ownership Procurement Using the Strategic Business unit BookSurge to keep a rich inventory of digital copies of books so as to make this readily available for customers through with(predicate) print-on-demand and reduce time of delivery. curiously built distribution centres, warehouses and fulfillment centres to increase the speed of order touch on thus avoiding transaction costs. PRIMARY ACTIVITIES Inbound logistics Highly reduced returns to suppliers (such as unsold books and media) due to available accurate forecasting technology Laseter et al (2000). Efficiently gathering information about customer experiences to inform service inputs and inventory controls. Operations Easy and fast payment systems Online customer impinging and feedback. 24hour warehouse operations to meet customer demands. Outbound logistics Close propinquity to motorways e. g.UK Fulfilment Centre in Bedfordshire located next to M1. Ability to meld orders bound for specific locations. Marketing & Sales Discounts and price reductions made available with suggested product mixes. Similar products recommended to customers interactively. In teractive shipping and parceling price calculations. bountiful delivery based on single transaction spend. Service step down returns policy within 30 days. Uses marketplace to increase channel and reaching of goods through 3rd parties and customers. Price comparison of new products with used products in marketplace shops. B. How has it responded to pressures from its competitive environment?They responded with a continuous innovation in business strategy and information systems. Its business innovations are all set by huge investments in information systems. There were three billion titles in print, and any one physical bookstore could only stock a fraction of them. A virtual bookstore offers a much larger selection of titles. Amazon. com was able to charge lower prices than physical bookstores because it well-kept very little of its own inventory (relying instead on distributors) and did not have to pay for maintaining physical storefronts or a large retail sales staff.Amazon also introduced Amazon. com Auctions (similar to those offered by eBay), and zShops (online storefronts for small retailers). To service these new product lines, Amazon significantly expanded its warehouse and distribution capabilities and leased large numbers of employees. C. How does it provide value to its customers? In 1995, former investment banker Jeff Bezos took advantage of new business opportunities created by the Internet by scene up a Web site to sell books directly to customers online. Amazon. com provided online synopses, tables of contents, and reviews to cooperate with selection.Amazon tried to provide superior customer service through e-mail and telephone customer back off, automated order confirmation, online tracking and shipping information, and the ability to pay for purchases with a single click of the mouse using credit card and personal information a customer had provided during a previous purchase. This was called 1-Click express shopping, and it made the shopping experience even more convenient. Q. 2 Describe Amazons evolving business strategy? Amazon has changed its strategy for the last 13 years.They started from a way to sell books over the internet directly to customers, They offered so many things with time as a. A much larger selection and lower prices b. Great customer support via telephone and e-mail c. Customers ability to connect with authentic people d. The creation of 1-click shopping e. In 1998 began selling music and video products They set a goal of being a biggest virtual retail keep company. Their scope includes lean inventories, low head count, and significant cost nest egg over traditional bookstores and other retail competitors.Also in advance(prenominal) 2000 they lowered prices, gave free shipping, and offered e-commerce to customers in order to increase profit. They improved their capacity and became a profitable corporation. Q. 3 Why did the company change its strategy? Amazon kept changing its strateg y throughout its existence to contend better. To be a successful player in the market a company especially an online retailer needs to have the ability to counterbalance according the changing situation of the market. Due to continue adjustments in its business strategy Amazon was able to get profits in less(prenominal) than ten years and getting a continuous profit in the recent years.They changed their strategy timely and in order to keep the company growing they need to change the business strategy according the flow rate market and by keeping in view the competitors. Q. 4 Do you think Amazon can continue to be successful? exempt your answer. Amazon is one of the biggest online retailing company and is famous for providing textbooks and reading materials for purchase. mountain do not surf on internet in large(p) deal to find another online retailing company because the Amazon has created an image in the minds of the users and they are confident that they get out get a pro minent deal at Amazon.Personally I would gladly use Amazon as It has developed a trust level over the years. As for as the success of the Amazon is concerned I think Amazon will keep getting success in the future and they will continue to deliver for their investors. If the senior management is flexible and creative they will be able to adjust in any economic situation. There will always be a great number of students and other people who needs books and other reading materials. Amazon with a good history and good steady revenue and customers also support my vertex more solid in regards to their continual success.