...External Analysis for Amazon, which includes macro and micro factors, Strategic Analysis, consisting of Porter's 5-force model, SWOT analysis and Marketing Mix, which conclude 7Ps, in order to assist Amazon in extending into a new online service, a social platform named `Amazon Book Club`. Part A: External Analysis 1. The Macro environment 1.1 Economic In recent years after economics crisis, global economy has been gradually improved. GDP, as a measure of a countries’ economy, has been increased in a stable pace in America [1]. At the same time, according to the data from People’s Daily Online, China’s household disposable income reached 20167 yuan in 2014, 8.0 percent increase compared with 2013 [2]. Take China as an example, ‘shopping online’ becomes the hot words in recent years. As it indicates in the chart [3], the scale of the E-commerce market extends gradually. All these figures indicate that people are more capable to purchase and attach more importance to the quality of life. Amazon, in the last 18 months, undoubtedly benefited from this tendency. For example, in the first Chinese ‘shopping overseas festival’ beginning on 28th, November in 2014, the sale increased by 24 times compared with the week before it [4]. 1.2 Political a. Governments’ policies will influence market structure and behavior. For example, China carry out the policy to encourage consumption. China raised individual...
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...Write Up 1: Amazon Goes Global 1. Why did Amazon choose the United Kingdom as its first entry location? Why not other countries such as Canada and Austrlia? With the emergence of a global marketplace, Amazon has since ridden on the waves of the opportunities that comes with globalisation. After more than a decade of expansion, Amazon’s international operations accounted for about 43 per cent of its revenue, bringing in $26.28 billion in 2012. This shows the significance of targeting the international markets. However, entry into foreign market does not come without risks and costs that resulted from barriers created by distance. The CAGE Framework of distance by Ghemawat explained distance as 4 main attributes – Cultural, Administrative, Geographic, Economic.1 To address these risks and costs, it is crucial to first assess the extent and type of differences between the USA market and the United Kingdom market. Amazon’s entry into United Kingdom (UK) can be attributed to minimal distance and various similarities, which allowed Amazon to significantly reduce risks and costs. Primarily, the UK market has a lot of similarities to the US market in terms of cultural, administrative and economic distance. UK has the second most number of native English speakers (60 million), after US (231 million), and is also the place where English was first spoken. Since books were the primary products sold by Amazon, the similarity in language made it extremely ideal for Amazon to target...
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...Amazon is an American international electronic commerce company formed by Jeff Bezos in 1994. It is one the largest online retailer in the world.[1] Below is the analysis for the market valuation of Amazon. PORTER’S FIVE FORCES ANALYSIS [8] Threat of New Entrants When it is easy to enter the industry, the threat would be big. A bigger threat will lower the potential profitability in the industry. Regarding the industry, the market entry barrier is low because the technology requirement is not high. However, economic of scale enables Amazon to provide services and products at a competitive low price. Also it has built up its reputation and accumulated a certain amount of loyalty customers. It is difficult for a new startup company to compete with Amazon. Profitability of Amazon is high due to the small threat of new entrants. Threat of Substitute Products/ Service When there are more substitute products or services, the threat would be larger and the profitability of Amazon would be lower. Amazon is an online retailer selling various products. It is an innovative service and hence has a high brand recognition. Compared with substitute service such as service of buying on customer’s behalf, Amazon can provide more confidence to customers. Also, traditional retailers are also a substitute service to Amazon. However, there would not be a big conflict between Amazon and the traditional retailers because of the consumer behavior. This means some consumers would insist in shopping...
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...e-commercial empire. The NYSE’s IPO is the signal to tell global investors and competitors that Alibaba is ready to join the global market competition. For Alibaba, going global means new frontier, however, the new frontier could be either a barren cliff or cornucopian grassland. In this essay, we will mainly discuss that why Alibaba want to expand global markets, and how Alibaba is going to make the global strategies to against global competitors in overseas market. by avoiding direct competition, targeting similar market as China and increasing firm size in the global market environment to step into a “grassland” market for persistent development. Alibaba -- the world’s largest online and mobile commerce company, was established in 1999 by the group of 18 people led by Jack Ma in Hangzhou, China. There are three main sites in Alibaba China, including T-mall, Taobao and Alibaba.com along with numbers of other companies to support Alibaba’s ecosystem development. Moreover, Alibaba also has Alibaba.com and AliExpress.com to provide worldwide online shopping services (Pressman 2014). Until 2013, Alibaba has more than 2 million merchants across more than 190 countries and regions. In 2013, there was amount of $248 billion transactions went through Alibaba’s online sites which is more than the total of eBay and Amazon. Furthermore, after the NYSE’s IPO, Alibaba’s market cap has reached up to 215 billion dollar, which only followed behind Microsoft, Google and Apple among the global tech...
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...alibaba By snoworb | Studymode.com xecutive Summary Founded just before the turn of the millennium in Hangzhou, China, Alibaba Group has to date become the largest online retail website worldwide in the planet, its total transactions surpassing the sum of both Amazon and eBay’s (Erickson, 2013). The report explains its business and operation model and market strategy, before moving to explore the reasons for Alibaba Group’s success such as its established market share in the large market of Mainland China and its efforts to promote the perception of the reliability and security of e-commerce. Comprising of its future plans in logistics improvement, expansion into developing nations, integration with social networks, venture into mobile commerce, and also, industries beyond, the report then ends with suggestions for future possibilities that the Group could explore. Outline of Alibaba Group Set in a fast moving, highly pragmatic e-commerce sector, Alibaba Group has never been shy of its ambition which comprises to top Walmart to become the largest retail company worldwide within the next 3 years (Hong, 2013). Alibaba Group has stakes in not only e-commerce platforms but also in cloud computing, group purchasing, payment processing, cloud computing, and even instant messaging. With its strategic position in a developing China, strong presence in the e-commerce sector and far looking management strategies, Alibaba Group might just be able to achieve its ambitious goals. ...
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...Mackenzie Kretz SCM 465W Alibaba Vs Amazon Supply Chain Alibaba’s (BABA) is a Global e-commerce platform that was founded by Jack Ma in 1999. Alibaba’s original customer base was rural China but now BABA’s is expanding globally. Alibaba’s has now received the highest Initial Public Offering (IPO) the United States has ever seen. One of the positives of Alibaba’s is that it is already bigger than Amazon. Alibaba’s is the world’s fastest growing e-commerce market. Another positive is that the company has rapid growth and plenty of growth potential. Alibaba’s revenue is up 52.1% from 2013. The final pro of Alibaba’s is that they have an effective business model. Alibaba acts as the middleman for buyers and sellers, meaning that they have no direct contact with any of the products. This business model keeps costs down and profits up which is why Alibaba’s has a net profit margin of 41%. One of the flaws Alibaba’s has is in its foundation. Amazon has a foothold in the U.S., which could make it tough for Alibaba to break into the market. Amazon can offer same day delivery, which Alibaba’s will not be able to do unless they commit to creating more infrastructure in the U.S. Alibaba’s would have to commit to building relationships with delivery companies such as UPS/FedEx if they want the edge over Amazon. Amazon offers a great customer experience that creates loyal customers. Alibaba’s would have to fully commit to offering great price points and amazing...
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...activities that a company undertakes with regards to its relations with foreign markets. * Internationalization can take many forms, such as investing in a foreign country (foreign direct investment), forming partnerships with foreign companies, subcontracting foreign experts, taking part in international networks, and many more. * Why consider going international? * To increase overall customer base * To offset seasonal fluctuations in local markets * To minimize risk of losing market share to clients who themselves use internet to find goods\ services in overseas markets * To offset increasing costs of doing business at home * To gain prestige with customers at home * Why STARBUCKS? In a globalized world where every company has the opportunity to explore the world in search of other profitable markets, there are different challenges and opportunities faced. I would like to explain this by focusing on Starbucks, one of the world’s leading coffee chains. Starbucks has come a long way from a coffee bean retailer to one of the world’s most recognized coffee houses. All throughout the years, Starbucks have expanded both domestically and internationally. In this answer, I would like to explain about the process of internationalization that Starbucks employed and continues to employ. The aim is to analyze the strategies of Starbucks in entering new markets and expanding internationally. For this answer, instead of choosing an...
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...Johnny R. Huffstutler BUS330 April 7, 2014 China and India are two of the largest countries in the world, both having a very large youth market. India for a number of reasons could be seen as being approximately fifteen to twenty years behind China in terms of age when it comes to averages of their work force (Devonshire-Ellis, 2013). There are trends in both Chines and Indian markets that emulate some US economic trends, but one of the common characteristics seen in India and China in today’s youth markets is a sense of individuality that is comparable to that seen in many members of Generation Y here in the United States. Some of the products that seem to strike a chord with youth markets in India and China, much like the US are automobiles, personal electronics (phones and tablets) and in many instances, designer clothing. From a marketing perspective, there are some similarities between the youth markets in China and India which resemble the youth markets in the US, such as online shopping and anything to speed up the shopping process. Cookie cutter approaches that are seen here in the US are not likely to be successful in Indian and Chinese markets. (Brown, 2011) Some of the factors that come into play that differ between China and India from the Macro perspective, are apparent due to the differences in types of government. India is often considered the world’s largest democracy, while China is still under communist rule and the most visible difference...
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...leaving N.Y. City for the Pacific Northwest. On its 15th-anniversary in 2010, Amazon is truly proud to be one of the world largest online retailers, selling everything from musical instruments and sports equipment to household appliances and apparels (Kayla, W. 2010). In our coursework group assignment, we are tasked to study and analyse the strategic management issues of Amazon.com. The case study will base on fourth quarter of 2007 as a current year. We will be evaluating the company's external and internal environments, how the company emerge into the industry by means of its strategies management in dealing with economic, technology & distribution issues and competition. We will also look at the company's vision & mission and it relate to the expansion of its product lines and reach, to increase its revenue and market share, and to understand and consider their possible near-term and long-term objectives that the organization could pursue. Lastly but not least, to out up recommendation for Amazon and conclude it with our learning experiences on BPS module. Page 3 of 27 2. Company Overview Amazon was founded by Mr. Jeff Bezos in 1994 with head office in Seattle, Washington, the company is one of the most customer-centric companies in the World and has grown to be a Fortune 100company. It has a diverse range of product offerings over at extensive network of customer service centers (About Amazon, 2007). Amazon.com is one of the most popular names on the internet, it operates...
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...B : AMAZON 1- By using Porter’s 5 forces’ framework, describe the forces that affect the core initial market of amazon (the online retailing industry) The power of Suppliers: Suppliers are not concentrated : thousands of publishers throughout the world. The inputs are not necessarily rare. The power of Suppliers: Suppliers are not concentrated : thousands of publishers throughout the world. The inputs are not necessarily rare. The power of Buyers: Buyers have a high bargaining power because of the low switching costs the Internet market allows. Besides, the market is very competitive, and that ensures a high power to consumers. The power of Buyers: Buyers have a high bargaining power because of the low switching costs the Internet market allows. Besides, the market is very competitive, and that ensures a high power to consumers. Potential competitors: Apple, Microsoft, and Google IBM, Sun system, barns and noble. Potential competitors: Apple, Microsoft, and Google IBM, Sun system, barns and noble. The threat of substitutes: Customers could switch to alternatives if traditional web retailers promote a substitute with a higher value such as Wal-mart that becomes more and more competitive on the Internet market. The threat of substitutes: Customers could switch to alternatives if traditional web retailers promote a substitute with a higher value such as Wal-mart that becomes more and more competitive on the Internet market. Potential entrants ...
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...The Strategic Framework Of Amazon Online Amazon.com Overview Amazon.com was one of the first major companies to sell goods over the Internet and has become a worldwide established name. Amazon.com is an American e-commerce company that is based in Washington. It was founded by Jeff Bezos in 1994 and began as an online bookstore but due to its success, Amazon has diversified into other product lines and services such as groceries, electronics and Merchant Program (see Appendix 1 for detailed portfolio). Amazon. com’s stock price has fluctuated in recent years from $105 in 1999 to $5 in 2001 (Lauden and Traver, 2000). Amazon.com has developed separate websites for Canada, UK, Germany, France, China and Japan. Amazon.com vision is to become (Amazon.com, 2007): “Earth’s biggest selection and to be Earth’s most customer centric company.” Definition of Strategy An integrated set of actions aimed at increasing the long-term well-being and strength of the enterprise relative to competitors. strategic thinking: creative, entrepreneurial insight into the ways the enterprise could develop. Strategic planning: systematic, comprehensive analysis to develop a plan of action. Opportunistic decision making: effective reaction to unexpected threats and opportunities. Strategic management: having an effective combination of coherent planning, incisive thinking and astute opportunism. The Evolving Nature of Strategy and Strategic Planning in Organization: World War II: Formal strategic...
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...E-commerce in China E-commerce has been greatly developed in both United States and European countries when we look at the success of eBay and Amazon. However, according to researchers at IDC (International Data Corporation), it is forecast the annual Asian sales outside Japan, including Taiwan, Hong Kong, South Korean and India, charged ahead at 38% a year through 2007 eBay sales (Miller, 2004). E-commerce not only creates business opportunities, but also helps enterprises save money and operate more efficiently. Therefore, the potential of the market among Asian regions in recent years has been extremely large, especially in Taiwan and Hong Kong. However, many people notice that China seems to be lagging behind this trend and e-commerce is not very suitable for the culture in China as people may prefer face-to-face business. This essay argues that China has the need and potential in developing e-commerce. E-commerce is becoming more compatible with the Chinese culture of business. Although it may be argued that E-commerce is too technological that violates the traditional Chinese business culture as in the past of Chinese society, social relationship plays an important role in Chinese business and shows appropriate respect to the customers or partners. However, all the things in e-commerce are done by the systems only. Nowadays, more and more people in China have an opportunity to receive education so that they can more easily access to internet world and also different cultures...
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...Market Entry Strategies for Entering E-Commerce Business in China May 18th 2014 Table of Contents 1 Introduction 1 2 Market overview 1 3 Market analysis 2 3.1 Approach using Porter’s Five Forces 2 3.2 Approach using SWOT analysis 2 4 Failed market entrants 3 5 Successful market entrants 3 5.1 Leveraging local platforms 3 5.2 Buying stakes in local businesses 4 5.3 The case of Amazon 4 6 Key success factors 4 6.1 Understanding the market 5 6.2 Differentiation 5 6.3 Social Media 5 6.4 Payments 5 6.5 Logistics 5 7 Conclusion 5 8 Bibliography 6 Introduction This paper covers challenges and strategies in entering the e-commerce business in China from a Western point of view. The focus thereby is on companies doing classical business-to-consumer (B2C) business and that are established players in their home market. Market overview According to market analysis (ref 1-2-3) the e-commerce market in China surpassed the U.S. one in 2013, reaching almost 300bn USD in turnover while U.S. reached just little above 250bn USD. Not only the size is impressive but also the growth rate, which has been around 70% in China since 2009 compared to 13% in the U.S. (see Figure 1). The online part of the retail sector is around 7% whereas Western countries report from 2% to 6% according to (Hoffmann & Lannes, 2013). In addition, more than 50% of all transactions are carried out via mobile devices. Finally, it is important to mention...
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...Amazon goes global Gary Sanghera BUSM 4200 Amazon goes global Gary Sanghera BUSM 4200 Table of Contents Executive Summary 2 General External Environment 3 Industry Analysis 6 Internal Environment 7 Porter’s Value Chain 10 SWOT Analysis 12 Endnotes 13 Executive Summary Amazon.com Inc. is the largest online retailer in the world. The purpose of this report is to find out whether Amazon should take a break from its global expansion and focus on strengthening its existing operations or if the company should continue to explore new market opportunities and if so to find out which market Amazon should enter if it continues to expand. The external environment indicates many significant trends that Amazon should consider and use to its advantage, for example the rapidly growing online retail industry; more investment from governments in information and communication technologies and a strong demand for this investment from the all markets is causing a rapid expansion in customers buying online. Porter’s five forces indicate that online retail industry is difficult to enter into due the brand image that the top firms have now established, but it is very easy for customers to compare prices among the top online retailers to find the best product for the cheapest price; indicating a high buying power for consumers. Suppliers do have some power if they offer a unique product that cannot be easily bought elsewhere, like Amazon selling Harry Potter novels. However...
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...Strengths * Leading position in the e-commerce market It is the world’s largest ecommerce company which instead of selling products themselves, provide a web platform for exchange of products. It does not warehouse the goods, instead connects the buyers and sellers which is the main reason for their fast growth. * Broader customer base To increase the customer base, have more information exchange and to build momentum to increase its influence, it has a team of three countries, i.e. Japan, China and Britain. * Brand popularity Alibaba has strong brand popularity and it is difficult to find another B2B ecommerce with such huge brand influence power and brand popularity in China. Alibaba has been doing the scientific marketing efforts for the global customers since many years and has used it to establish a good reputation and brand popularity in their customer’s mind, which has become the core competitiveness of them, and that is hard for the later competitors to exceed which acts as value for Alibaba. * Good understanding of its customers The customers of Alibaba are able to effortlessly navigate through the website because it has been created with a very good understanding of its customers. It also provides another forum for the customers who want to communicate information or find business opportunity in their location. It keeps on bringing new innovative ideas in the e-commerce industry in China which is a strong indication of its understanding of...
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