...Amazon.com’s E-Business Model Pros and Cons of Amazon’s Growth and Diversification of Business and Specialization Amazon.com is a digital shop, open around the clock. Consumers are able to access amazon.com literally at any moment, on any given day, due to its real-time optimization. Amazon provides unlimited reach to the worldwide market, with no substantial boundaries. Amazon has unlimited inventory and is just as diverse in categories which helps promote a speedy inventory turnover. Their focus on low prices, a diverse selection and customer convenience has proven to be successful. Amazon also has endured one of the fastest growths in the internet’s history reaching almost 3 billion dollar in sales within the first five years. Amazon is considered an ecommerce giant and has over 30, 000 thousand employees and brings in more than 30 million in revenues annually, topping Barnes & Nobles and Borders. Amazon owns many companies consumers use every day not knowing they are owned by such. Zappos, fabric.com, pets.com and audible.com are each owned by Amazon. Furthermore, entities of Amazon often used are AmazonBasics: amazon branded electronic products, AmazonFresh: sells and deliveries groceries, AmazonStudios: online social movie studio and AmazonWarehouseDeals: offers discounts on refurbished products. Amazon also facilitates many other businesses, such as providing web services for companies like: Netflix, Etsy, Papaya and Reddit, to name a few. So not only is Amazon...
Words: 1164 - Pages: 5
...Assignment #2: Amazon.Com’s E-Business Model Je’neen A. Wilson, B.S. The Business Enterprise – BUS508 Strayer University – White Marsh Prof. A. Kobina Armoo Has Amazon Lost Its Identity? Amazon.com is a famous Internet retail company in E-commerce. Its business includes B2B and B2C. It opened its business in July 1996. Today, Amazon.com has expanded its business in more than two hundred and twenty countries and this company sells various products like electronics, books, music, DVD, House wares, PCs and cars (Amazon.com Announces 4th Quarter Profit 2002). It is the biggest retail store in E-commerce. Even though Amazon.com owns these accolades, this company is struggling to survive. Amazon.com had a $19 billion market value before its stock prices decreased from $75.25 to $9.25 (German, 2001). The problem is that Amazon still has not made real profits since it opened. How to help Amazon.com keep standing on the stage? If Amazon.com wants to survive in E-business and start making real profits, Amazon.com should merge with other retail companies, operate a new E-business strategy, and rebuild its financial structure. Business strategies and activities play a very crucial role in the future development of the organization. These strategies become more important, in case of e-business organization such as Amazon. Every organization uses different business strategies in order to remain in business. Some adopt customer- centric strategies; some uses strategies to maximize...
Words: 1103 - Pages: 5
...Amazon.com’s E-Business Model Donna Lowther Dr. Kitoko Contemporary Business July 30, 2011 1. Discuss whether or not Amazon has lost its identity by expanding into markets well beyond books. According to Sandoval (2001) Amazon is losing its original identity because it is losing ground in the book selling department, for which it was created and because Amazon may have diverted its attention from books or, worse, spread the company too thin to compete effectively in any single area, by expanding into other areas. Though I do no ever remember a time when Amazon was just strictly books I would have to agree with Sandoval, since Amazon now sells items such as video games DVDs, toys, electronics, software, and home-improvement products as stated by Quittner (1999). Quittner (1999) also states that Bezos has further expansion plans such as: “washing machines, cars, rubber gaskets, Prozac, exercise machines, marmalade, model airplanes, everything but firearms and certain live animals.” Looking at this shows that Amazon has definitely lost its identity as strictly a bookseller. I think Amazon’s identity is becoming close to that of e-bay, in so far as the fact that Hof (1999) states that Amazon now has daily auctions. In their annual report for 2010 Amazon (2010) states “this expansion increases the complexity of our business and places significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial...
Words: 1786 - Pages: 8
...Amazon.com’s E-Business Model Introduction In this paper we will explore the rise of a mega business empire, Amazon.com. From the beginning of just books sales to the current diversified online store and why it has gained world wide recognized by branching out to other sales items besides books. As CEO Bezos stated in their 2010 annual report, “ Amazon.com opened its virtual doors on the World Wide Web in July of 1995 and offers Earth’s Biggest Selection. We seek to be Earth’s most customer-centric company for three primary customer sets: consumers, sells and enterprises” (Bezos, 2010). It is apparent that CEO Bezos understood that customer service and listening to the consumer would separate them for the rest. This paper will also compare and contrast competitors in the book sale market, competitors such as Barnes and Noble ad Borders and what has separated Amazon.com from them. Has the diversification of Amazon.com helped them gained global recognition? Or has a solid understanding of the market and customer needs propelled them to where they are today? The Pros and Cons Amazon.com jumped into the market in 1995 with an effective business tactic of online book sales. Not only did the company launch an English version of the website, but they also launched a Chinese, French, German and Japanese version to gain a global audience quickly. Amazon also receives about 615 million visitors annually according to a survey by complete.com (History of Amazon). Some dare to...
Words: 1707 - Pages: 7
...Amazon.com's E-business Model by: Rebecca Hovanec Instructor: Veronica Brown-Corbin Business 508: The Business Enterprise April 28, 2011 Pros and Cons of Amazon's Diversification Amazon’s growth and diversification is unusual if only because it happened gradually and no one was expecting that it took off like it did. There have been both pros and cons to this growth. Since it was done gradually, there was little chance for it to backfire on Amazon. The design of the marketplace can help to influence success by improving the flow of information, thereby reducing stress and enabling buyers and sellers to function more effectively (McMillan, 2002). By setting the main page to show favorites based on prior purchases, Amazon was building a loyal customer base from which they could try different marketing and selling strategies with. The company used this customer base to expand and diversify, based on their needs and wants. They have also allowed small businesses and individuals to partner up with them to expand business even more. They helped to pioneer the Business to Consumer e-business during a time when many dot coms were going by the wayside. In doing this, Amazon provides better risk control in an ever changing economic climate by not being reliant on a single market. The cons of diversification include a lack of basic knowledge of a new industry, having double the sales team, and may be incompatible businesses (Diversification in Business, 2011). All Amazon...
Words: 1642 - Pages: 7
...America and International. Websites are also being individually focused for UK, Germany, France, Japan, Canada, China, and Italy. Other than those countries, Amazon also provides them internationally shipping for some products. Amazon succeeds in its online business, and gains more net incomes than some competitor on ground such as Barnes and Noble, and Borders. Amazon’s e-business strategy is a combination of products. The company started with online books then other products to gain customers in a wide range. However, offering a large product variety, Amazon has still maintained its strong brand. 1. Discuss the pros and cons of Amazon’s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. Amazon plays strategy planning on the growth and diversification which objects to provide a “One Stop Shopping” for its customers. Amazon serves customers through the website focusing on selection, price, and convenience. There are million of unique products across 12 categories to be sold by Amazon and third parties. Amazon also manufactures and sells the Kindle E-book, which so far is the biggest electronic library. Customers can instantly download e-books, music or video from anywhere and anytime. It even costs less than traditional product such as a book almost half price. Additionally, Amazon is using two strong valued strategies, which...
Words: 1791 - Pages: 8
...Running head: AMAZON.COM’s E-BUSINESS MODEL AMAZON.COM’S E-BUSINESS MODEL Y. A. ARIYO STRAYER UNIVERSITY, COURSE: BUS508001011*201103 01/24/2011 Abstract Over the years, it has become imperative for an entrepreneur to continually seek ways to stay competitive in any market. In the twenty first century, a very important way to achieve this is by use of e-business; doing business via the internet. This report taps into the influencing factors of the e-business model and business plan that helped maintain Amazon.com’s competitive edge and propelled it to becoming the largest online bookseller and retailer. Keywords: Amazon.com, business plan, E-Business Model Amazon.com’s E-Business Model In determining whether or not Amazon.com has lost its identity, my approach will involve reviewing and comparing Amazon’s web site purpose with other competition websites, using Appendix Table 1. I will also be comparing site’s objectives with the general business plan outlined in the 2009 Amazon.com Annual Report which states:- “Amazon.com opened its virtual doors on the World Wide Web in July 1995 and offers Earth’s Biggest Selection. We seek to be Earth’s most customer-centric company for three primary customer sets: consumers, sellers, and developers. In addition, we generate revenue through co-branded credit card agreements and other marketing and promotional services, such as online advertising” (p. 3). Functionality and Design From its inception, Amazon...
Words: 1606 - Pages: 7
...The Internet Business Review Issue 1 – October 2004 THE IMPACT OF E-COMMERCE INDUSTRY TURMOIL ON AMAZON.COM: A STRATEGIC PERSPECTIVE Russell Casey - Clayton State University, USA William Carroll - University of Phoenix, USA Edited by Faith W. Smalls Abstract Internet retailers face intense competition in their quest to gain market share due to the large number of competitors, ease of entry, low switching costs and the strength of existing multi-channel retailers. To survive, it is critical that online retailers create a sustainable competitive advantage in their e-commerce strategy and plan for long-term strategic positioning. The article uses a case study analysis of Amazon.com's strategy to develop an understanding of the e-commerce competitive environment and the importance of building a sustainable competitive environment to create value for the firm, its customers, and its shareholders. © 2004 The Internet Business Review The Internet Business Review Issue 1 – October 2004 Introduction Is the Internet a leech that sucks a company’s assets dry? Many investors, entrepreneurs, and managers pondered this billion-dollar question as hundreds of dotcoms collapsed over the last two years. Companies, such as Boo.com, Etoys, Onsale, @home, and Webvan, are extinct and many more cling to existence. The dreams of consumers, shareholders and other stakeholders have been shattered. From their inception, these dotcoms were going to revolutionize the world and...
Words: 8879 - Pages: 36
...stock market since May of 1997 -Amazon.com works with companies such as Nordstrom’s, Gap, Eddie Bauer, Urban Outfitters, Osh Kosh, Footlocker Barnes & Noble 1873: From his home is Wheaton, Illinois Charles M. Barnes starts a small book business 1917: William Barnes, Charles’s son travels to New York to negotiate with G. Clifford Noble and from a partnership, then opening the first Barnes and Noble 1987: Barnes and Noble acquires B. Dalton 1991: Barnes and Noble pioneers the super store concept that has huge location, wide selections of titles, experienced bookstore staff, warm atmosphere and cafes in stores 1993: Barnes and Noble goes public on the stock exchange on September28, 1993 In May 1997 Barnes and Noble opens it public site on the world wide web barnesandnoble.com 1999: barnesandnoble.com goes public on the stock exchange and raised $468 million and unprecedented amount for an internet company Business Models -Amazon.com’s business model is still being proven to this day -Barnes & Noble’s business model is called Brick-and-Mortar retailing -Brick and mortar retailing is when a company expands their business to the internet and by doing this develop new business and increase their profits Amazon.com’s Advantages -Innovative -Customer Focused -Virtually Efficient Barnes & Noble’s...
Words: 1185 - Pages: 5
...Amazon.Com’s E-Business Model Amazon.com’s E-Business Model Contemporary Business – Bus 508 Dr Linda Harris July 21, 2011 Question 1 1. Discuss the pros and cons of Amazon’s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. As the economy continues to grow and change so will consumers with how they shop and purchase their everyday needs. Having a successful business online takes time and effort to ensure that consumer needs are being met. This paper will discuss how Amazon has been able to stay so successful with new and upcoming competitors. In addition to discussing the success, the struggles will be evaluated as well as ways to improve the company. When visiting Amazon, one obtains several products at one time;-it is a one-stop shop similar to an online “Seven-Eleven Store. “ Amazon is the largest online book retailer composed of a multi million-customer base. Jeff Bezos, the founder of Amazon, had great confidence in the World Wide Web even before the dot.com boom. He used the internet as the core of Amazon's business model. Amazon customers are able to search inside the book before buying it, read customer ratings on products of interest, and purchase products at low prices. Amazon’s initial target market of online book consumers, proved to be very lucrative. In addition, the expansion into more diverse product offerings beyond books, such as music, DVD & video, toys, electronics...
Words: 304 - Pages: 2
...amazon global fullfilment strategyAmazon.com Supply Chain This area of the paper focuses on Amazon.com's supply chain and how it supports their business in the internet retailing environment. First, we have discussed Amazon.com's different operating models and explained the different supply chains that support those business models. After the business and supply chain models are defined we have discussed Amazon.com's supply chain network, inventory segmentation strategies, order sourcing decisions, overall replenishment and fulfillment process flows, intra-warehouse process flows, and transportation policies. This report analyzes the overall Amazon.com supply chain for United States distribution with a specific emphasis on the Media product segment. Amazon.com US Retail Product Segment Books, CDs, and DVDs and magazine subscriptions comprise the media product line at Amazon.com (Amazon.com 2002 Annual Report). Amazon.com began as an online bookseller and its first product line expansions were music and movies. As a result, the Media segment comprises a large percentage of Amazon.com overall revenues. In 2004, Media accounts for 74% of all revenues. Within the US, the Media segment accounts for 67% of all revenues. In dollar terms, the Media segment in the US generated $2.6 billion in revenue in 2004, compared 115 to $3.8 billion generated across all segments in the US (Amazon.com 2004 10-K Report). The pie chart below shows the breakout of revenue percentages by product and...
Words: 12603 - Pages: 51
...Amazon.com: An E-Commerce Retailer A case report prepared for MG 495 Business Policy Fall ! 2014 Amanda Ransdell August 23, 2014 AMAZON.COM: AN E-COMMERCE RETAILER I. INTRODUCTION Amazon.com is one of the most prominent names in the e-commerce sector and has been for many years. In order to stay relevant in an ever-expanding market, Amazon.com has to continue to evolve. A. EXECUTIVE SUMMARY 1. Amazon.com wants to expand to keep up with the growing online marketplace. Their goal is to expand the product selection while controlling costs. They have two options to choose from to continue expanding their business one is to expand their business in online auctions. Because of the continued need for an intermediary in these types of transactions, Amazon.com would be able to market this additional service to both its current customer base, through the use of personalized emails, and to new customers through a general advertising campaign, including television and print ads. There second option was to develop and implement a business-to-business (B2B) exchange for suppliers, manufacturers, distributors, and retailers to use. Because the largest percentage of e-commerce sales resulted from transactions conducted on 13213 exchanges, this opened up a large potential market for Amazon.com to expand into. 2. My solution is to create the B2B exchanges, as it seems the most likely to provide the kind of expansion that Amazon.com is looking for while still...
Words: 3737 - Pages: 15
...Bezos 2. “Amid the Gloom, an E-Commerce War” New York Times, October 12, 2008 Assignment Questions: 1. Consider the challenges facing the company. As a member of the Amazon.com board of directors in early 2001, what actions would you take? 3 pts. I would not have partnered with the dot-com retailers because they didn’t need topartner with another dot-com realtor it was a good move to partner with companys that need the partnership. 2. Do you agree with the decision to pursue the Toys “R” Us deal? Why did the company do the deal? Should they do more deals like this? What impact does the Toys “R” US deal have on Amazon.com’s business model in early 2000? What is the present status of relationship between Toys “R” Us and Amazon.com? Provide your comments. 5 pts. The deal with Toys “R” Us were brought upon as a result of Amazon.com reevaluating its business model due to the dot-com crash and declaring bankruptcy. They made a decision not to partner with anymore dot-com retailers but to lean towards the traditional retailers. I do agree with the decision that was made to pursue the deal with Toys “R” Us because it brought expansion to Amazon.com’s business model as a logistics services provider. The objective was helping traditional retailers that desired to develop its online retailing systems capabilities while upgrading and enabling its distribution and nourishing skills that enabled its end-to-end visibility and speed while doing business online. 3. Trace the...
Words: 537 - Pages: 3
...Center for Research on Information Technology and Organizations UC Irvine Title: Competing in Book Retailing: The Case of Amazon.com Author: Shrikhande, Aarti; Gurbaxani, Viijay Publication Date: 11-01-1999 Series: I.T. in Business Publication Info: I.T. in Business, Center for Research on Information Technology and Organizations, UC Irvine Permalink: http://escholarship.org/uc/item/67p057vv Citation: Shrikhande, Aarti, & Gurbaxani, Viijay. (1999). Competing in Book Retailing: The Case of Amazon.com. UC Irvine: Center for Research on Information Technology and Organizations. Retrieved from: http://escholarship.org/uc/item/67p057vv eScholarship provides open access, scholarly publishing services to the University of California and delivers a dynamic research platform to scholars worldwide. COMPETING IN CENTER FOR RESEARCH ON INFORMATION TECHNOLOGY AND ORGANIZATIONS University of California, Irvine 3200 Berkeley Place Irvine, California 92697-4650 and Graduate School of Management AUTHORS: Aarti Shrikhande and Vijay Gurbaxani BOOK RETAILING: THE CASE OF AMAZON.COM NOVEMBER 1999 Acknowledgement: This research has been supported by grants from the CISE/IIS/CSS Division of the U.S. National Science Foundation and the NSF Industry/University Cooperative Research Center (CISE/EEC) to the Center for Research on Information Technology and Organizations (CRITO) at the University of California, Irvine. Industry sponsors include: ATL Products, the Boeing Company, Bristol-Myers...
Words: 10707 - Pages: 43
...OPER/023 ICMR Center for Management Research Amazon.com's Inventory Management This case was written by Purnima Pillai, under the direction of Sanjib Dutta, ICMR Center for Management Research (ICMR). It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. Licensed for use by the students of the Executive MBA Program, The ICFAI University. Not to be reproduced. 2004, ICMR. All rights reserved. To order copies, call 0091-40-2343-0462/63 or write to ICMR, Plot # 49, Nagarjuna Hills, Hyderabad 500 082, India or email info@icmrindia.org. www.icmrindia.org Abstract The case provides an overview of Amazon.com’s inventory management. Jeffrey Preston Bezos, the founder of Amazon.com, launched the company when he realized that Internet provided immense scope for online trading. Although the site was originally launched as an online bookstore it eventually offered several other products to keep abreast of the competition. The case takes a look at the different products and features offered on the site. The case also discusses Amazon's value propositions and its criteria for choosing strategic partners. It then elaborates on the strategies adopted by Amazon for managing its inventory. It also explains Amazon’s decision to outsource inventory management to distributors. The case takes a look at Amazon’s decision to sell the...
Words: 5973 - Pages: 24
