FACULTY OF OUM BUSINESS SCHOOL

MAY 2016 SEMESTER

11TH SEMESTER

BBED4103

E-COMMERCE

STUDENT NAME : MOHAMMAD OSMAN GONY

MATRICULATIN NO : UGS00020292
IDENTITY CARD NO : 16020104
EMAIL : md.osmangony989@gmail.com
MOBIL NO : +8801676743989
LEARNING CENTRE : WEST COAST INSTITUTE OF MANAGEMENT &
TECHNOLOGY, DHAKA, BANGLADESH.
Introduction to Amazon:

Amazon.com, Inc. is an American multinational technology company based in Seattle that

focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is
considered one of the Big Four tech companies, along with Google, Apple, and Face book.
Amazon is known for its disruption of well-established industries through technological
innovation and mass scale. It is the world's largest online marketplace, AI assistant provider,
and cloud computing platform as measured by revenue and market capitalization. Amazon is
the largest Internet company by revenue in the world. It is the second largest private
employer in the United States . And one of the world's most valuable companies.

Amazon was founded by Jeff Bezos in Bellevue, Washington, in July 1994. The company
initially started as an online marketplace for books but later expanded to sell electronics,
software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon
surpassed Wal-Mart as the most valuable retailer in the United States by market
capitalization. In 2017, Amazon acquired Whole Foods Market for US$13.4 billion, which
vastly increased Amazon's presence as a brick-and-mortar retailer. In 2018, Bezos announced
that its two-day delivery service, Amazon Prime, had surpassed 100 million subscribers
worldwide. Amazon distributes downloads and streaming of video, music, and audio books
through its Amazon Prime Video, Amazon Music, and Audible subsidiaries. Amazon also
has a publishing arm, Amazon Publishing, a film and television studio, Amazon Studios, and
a cloud computing subsidiary, Amazon Web Services. It produces consumer electronics
including Kindle e-readers, Fire tablets, Fire TV, and Echo devices. In addition, Amazon
subsidiaries include Ring, Twitch, Whole Foods Market, and IMDb. Among various
controversies, the company has been criticized for technological surveillance overreach, a
hyper-competitive and demanding work culture,[23] tax avoidance,[24] and anti-competitive
practices

History about Amazon.com:

Jeff Bezos incorporated the company as “Cadabra” on July 5, 1994. Bezos changed the name
to Amazon a year later after a lawyer misheard its original name as “cadaver”. In September
1994, Bezos purchased the URL Relentless.com and briefly considered naming his online
store Relentless, but friends told him the name sounded a bit sinister. The domain is still
owned by Bezos and still redirects to the retailer. The company went online as Amazon.com
in 1995. Bezos is said to have browsed a dictionary for a word beginning with “A” for the
value of alphabetic placement. He selected the name Amazon because it was “exotic and
different” and as a reference to his plan for the company’s size to reflect that of the Amazon
River, one of the largest rivers in the world. Amazon is headquartered in Seattle, Washington.
The company has individual websites, software development centers, customer service
centers and fulfillment centers in many locations around the world. Amazon announced on
October 11, 2016, plans to build convenience stores and develop curbside pickup locations
for food. In December 2016, the Amazon Go store was opened to Amazon employees in
Seattle. The store uses a variety of sensors and automatically charges a shopper’s Amazon
account as they walk out of the store, therefore there are no checkout lines. The store is
planned to open for the general public in early 2017. In 2011, Amazon had 30,000 full-time
employees in the USA and by the end of 2016, it had 180,000 employees. It employed
306,800 people in full- and part-time jobs worldwide.

Amazon Mission, Vision

Amazon Vision:

Amazon’s corporate vision is “to be Earth’s most customer-centric company, where

customers can find and discover anything they might want to buy online.” This vision
statement underscores the business organization’s main aim of becoming the best ecommerce
company in the world. In this regard, the following characteristics are identifiable in
Amazon’s corporate vision statement: 1) Global reach 2) Customer-centric approach 3)
Widest selection of products

Amazon Mission :

"Amazon is guided by four principles: customer obsession rather than competitor focus,
passion for invention, commitment to operational excellence, and long-term thinking.
Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by
Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and
Alexa are some of the products and services pioneered by Amazon."

Discussion:

Difference between business and business to business to consumer transactions within

Amazon:
When choosing an e-commerce solution for your online store, it’s essential to identify the key
differences between B2B and B2C e-commerce in order to make sure your platform of choice
works best for your specific business. The choice of ecommerce solutions on the market is
quite broad, and selecting the right one out of the spectrum may prove to be quite
challenging. If you are a B2B company, it’s especially important to be aware that there is a
number of specific needs the sector has, that are hard to meet with most standard e-commerce
solutions. Here are the main differences between B2B and B2C ecommerce that would
directly affect the choice of solution for an online store.

Order approvals and organizational structures:

B2C works directly with end-buyers and does not require any order approvals or special
related procedures. B2B, on the other hand, often needs to accommodate for a whole chain of
negotiations and approval processes, and the e-commerce platform they use has to be able to
support approval process by often as many as 10 different roles with an order trail being
accessible by some or all of those roles. B2C-focused software doesn’t often face those
challenges and might not have a quick solution for situations like this. The ownership of sales
processes within the organization differs between B2B and B2C as well. B2C sales are
typically managed by Marketing with a little involvement from IT and Operations. In B2B,
Operations and IT are the main process owners, which bring us to the key difference of
building relationships with the buyer.

Sales representatives:

With its priorities set on building long-term partner relations B2B sector has another specific
factor that is not really present as much in B2C e-commerce these days – using actual
salespeople, who work directly with the customer. It’s fairly safe to assume these days that
regardless of the commerce sector most people, in general, prefer to order directly online
rather than talk to a salesperson. Naturally, B2C ecommerce has quickly adapted to this new
reality and direct sales professionals there are now pretty much extinct. Even more naturally,
the remaining salespeople see e-commerce as a huge threat. However, in B2B sector, given
its specifics, sales representatives are still essential for building and maintaining partner
relations. And with this set-up, on-line purchasing options are actually a big help rather than a
threat - they are extremely useful for getting routine orders out of the way in order to let your
sales team focus on the more important tasks at hand.
For complex transactions or bigger orders, B2B buyers would still want to talk to a
salesperson. So, now your field sales can actually put their energy into their main goal –
relationships, rather than be routine order-takers; and if they still get compensated for their
customer base, they no longer feel threatened by the new technology, and it’s still net-
positive for the salesperson and the company. In order to make routine orders fast and easy
for your clients, while not taking away from your sales reps, your e-commerce solution needs
to accommodate both – a convenient online ordering system and a way to track and bind the
orders to specific sales people within the company. Plus, it needs to be able to accommodate
more complicated interactions, when there is a salesperson involved.

Customer relations:

When talking about the differences between B2B and B2C ecommerce, the key question is
“Why do we do e-commerce, to begin with?” What’s the main goal? The answer to that will
vary depending on your retail sector. B2C tends to be heavily focused on acquisition. The
main goal here is to get more customers and sell as much as possible. You have the number
of items that you market to as many potential buyers as you can. In B2B, the priorities shift
quite significantly. Here you sell high volumes of product to the same buyer, so, the main
priority is to retain that buyer. Building and maintaining long-term partnerships is crucial for
a B2B-focused vendor. Another important point is that the buyer in B2B is often not the end
consumer, but a purchasing agent – a specially trained person who makes buying decisions.
That’s a totally different approach to “shopping”! Based on this difference, B2B e-commerce
requires easy and convenient tools, which may include: Strong multi-storefront support;
Flexible catalog taxonomy; Scope based security for catalogs/ And a number of other B2B-
specific functions - as opposed to the B2C sector that typically strongly prioritizes a flashy
and catchy website meant to attract as many potential customers as possible.

Type of sale and logistics:

As we have previously determined, the sales types and customer relations are among the key
points when talking about the main differences between B2B and B2C sectors of commerce.
While in B2C you’re marketing the same few items to a huge pool of customers, in B2B
you’re selling products to the same 1 customer by pallet-load. That requires different logistics
and a different way of organizing shipping processes. Thus, your e-commerce solution needs
to be able to handle that difference. It’s essential for B2B e-commerce to have a well-
structured system, where returns, concerns, etc. could come through a measurable channel,
and metrics and analytics can be applied. Shipping and tracking would need to accommodate
higher volumes within fewer order entries as well.

Terms and pricing:

As has been mentioned before, the Amazon-like experience works perfectly for B2C.
Everyone is getting the same range of products and the same price for every item. They then
pay for the order with a credit card and is pretty much good to go at that point. B2B however,
as pointed out before, needs to be able to account for customer relationships. That applies to
not only the product assortment but also to partnership terms and pricing. Plus, a B2B vendor
needs to support additional ordering and payment options that are not necessary for B2C -
credit checks, credit account status, etc. Working with customers who order high volumes of
product, naturally, a B2B vendor negotiates different pricing with different buyers based on a
number of factors, like purchase volumes, custom orders, customer loyalty programs, etc. So,
unlike B2C e-commerce software, where you simply set a price that applies to everyone, a
B2B e-commerce solution needs to be able to work with negotiated and contract based price
adjustments - specific terms agreed upon with your customer.

To sum it up, transactions and shipping volumes, customer relations, and sale types are all
drastically different in B2B and B2C e-commerce. And those differences create a number of
unique requirements for B2B companies making it hard, if not impossible to comfortably
adapt B2C-focused e-commerce solutions to B2B needs through customization. B2B requires
its own set of tools and set-ups to be able to use e-commerce solutions conveniently. Finally,
the most obvious similarity is that on both sides of these two e-Commerce models are people.
Relationships between people based on trade have been developing for centuries. Now, their
external appearance has changed, but the essence remains the same.

Explanation of the benefits of Amazon having own website :

One of the latest additions to Amazon's repertoire is a subsidiary company called Amazon
Services. Through Amazon Services, Amazon sells its sales platform, providing complete
Amazon e-commerce packages to companies looking to establish or revamp their ecommerce
business. Amazon sets up complete Web sites and technology backbones for other e-
commerce companies using Amazon software and technology. Target, for instance, in
addition to having a store on Amazon.com, also uses Amazon Services to build and manage
its own e-commerce site, Target.com. The associate can also take advantage of Amazon Web
Services, which is the program that lets people use Amazon's utilities for their own purposes.
The Amazon Web Services API (application programming interface) lets developers access
the Amazon technology infrastructure to build their own applications for their own Web sites.
All product sales generated by those Web sites have to go through Amazon.com, and the
associate gets a small commission on each sale. In the next section, we'll take a look at how
all of these programs and channels come together to create a sales and marketing
powerhouse.

Benefits of Amazon having own website:

The beneficiaries of this tool are widespread. Prospective brands are able to assess their
potential on Amazon before induction, gaining the knowledge required to understand and
predict the trajectory of their brand on Amazon. This information allows brands to decide if a
partnership with Amazon is worth Amazon’s imminent influence before they experience any
consequences firsthand. Furthermore, current brands are better able to anticipate their future
as a result of their partnership with Amazon and develop strategies to help dictate their
course. With this tool, brands are able to act proactively, getting back some of the control
they relinquished by joining the site. Lastly, this tool promotes Amazon’s longevity and
improves the perception of the company overall. If brands are able to protect themselves from
brand dilution, Amazon is able to retain the security of brand leverage promoting its success.
Also, this new focus on transparency heightens both consumers and brands evaluation of
Amazon. Both consumers and brands will feel supported by the company with this
implementation of accountability and will remain loyal to company as a result, contributing
to the company’s long term success. As such, it is Amazon’s duty to actively attempt to make
a positive impact on its business partners and consumers; this tool is a step in the right
direction. Online retail is Amazon’s playground and it is clear that it makes the rules. The
company’s breadth equates to no company before it, resulting in the impossibility of
determining the overall impact of such an expansive and competitive force.

The nature of e-commerce communication within Amazon :

At first glance, Amazon's business structure is easily dubbed "e-commerce." And, in fact,
that's how company representatives and others generally classify Amazon and its namesake
website. But over the years the company has expanded into services that go beyond the
boundaries of strict e-commerce. Some even go as far as saying that Amazon isn't a
commerce company at all, as Amazon grows and expands in the ever-changing global
marketplace. More than two million third-party merchants in over a hundred different
countries are currently selling on the Amazon platform, and this number has doubled in the
past decade. More than 40 percent of all the merchandise sold on Amazon last year was sold
by a third-party merchant, or a total of about two billion items—double the number of items
sold on the platform in 2013. Of course, there’s a cost involved in selling on Amazon’s third-
party platform. Amazon collects a percentage of each item sold.

This fee ranges from 6 percent to 50 percent, though most Amazon third-party merchants pay
somewhere between 8 percent and 15 percent. But this fee isn’t the only cost to being an
Amazon third-party merchant. Due to the nature of the company’s unique business model,
Amazon third-party merchants often discover that Amazon is not only their partner, but also
their biggest competitor. Commerce, simply defined, is the activity of buying and selling,
especially on a large scale. When a company's platform for selling and enabling its customers
to buy its goods is electronically based, being online, then it's safe to say that it's an electronic
commerce – or ecommerce – company. Not only does Amazon fit that description, it
epitomizes it, being, as of the publication date, the largest online retailer in the world.
Personalized Given its colossal commerce nature, Amazon offers a surprise – personalized
service. This service is similar to what you find traditionally in mom-and-pop stores, when
the store owners are also the store clerks who know their customers as individuals, and are
thus able to give customized service tailored to each person.

Amazon does this electronically, by tracking the online behavior of customers on the
Amazon site and providing suggestions to customers based on that information. Business-to-
Business Beyond online retailing, Amazon has also entered business-to-business commerce.
Amazon offers its business operations – such as its warehouses, packaging, shipping, and
advertising and checkout services – to other businesses. So Amazon is also in the
"fulfillment" business, helping other companies take care of their customers from the point of
sale to delivery of the product. In 2013, the company revealed that outside sellers accounted
for 41 percent of units sold on the Amazon site in a recent quarter, according to the
Bloomberg article "Amazon Surges to Record High on Global E-Commerce Growth." Data
In addition to the aforementioned fulfillment services, Amazon has a large cloud
infrastructure that it leases out to companies who need storage space for their data. Amazon
also provides access to its Internet servers, giving companies more computing power. Beyond
that, Amazon has also blazed a trail in the publishing industry with its Kindle e-reader and
sales of e-books. For these reasons and more, some view Amazon as a data companies first
and a retailer second. Perhaps overall, though, we can say that Amazon from its very
beginning is an e-commerce company that's widening to include other forms of commerce, or
"waters," similar to the river that bears the same name. It takes a well thought out strategy,
creative marketing and a real investment of time, energy and resources to compete. It is true
that Amazon is no longer a quick way to make an easy buck. But for committed sellers, it can
result in monumental sales and drive your business through the roof.

Conclusion:

Amazon.com has undoubtedly been able to cater to different markets in different conditions.
It has been rapidly being expanding its operations across the globe while giving access to
infrastructure, technology, etc. Various strategies have been adopted by Amazon for its
sustainability and competing hard in some countries like China and India. Its business model
of online marketplace has had great success in rest of Asia, Europe, North and South
America. It has truly been aligning with its Vision and Mission statement of being the earth’s
most customer-centric company, to build a place where people can come to find and discover
anything they might want to buy online. There is lot of business opportunities in the
developing countries. For instance, the East and Centre European countries joined or are
about to join the European Union or the BRIC countries - Brazil, Russia, India, China, which
are considered as the fastest growing market, and Amazon.com should enter or invest heavily
into these countries. Amazons’ strong logistic alliance ensures that the company can deliver
its products fast and safe to the new customers. It has also been testing the delivery via drone
and many more to come. Amazon has proved to be the main pioneer of the global economy.
As a global e-commerce player, it has changed the process of the global business, increasing
the logistic efficiency and facilitating the acquisition, the sale and the promotion of goods,
etc. In a similar way, e-commerce helped millions of consumers through decreased prices,
high competition, orders and fast shipping. Big and small companies from multiple industries
depend on ecommerce applications in order to survive and to compete in local, nationals and
global economies. Amazon has been adapting the changes evitable in this dynamic
environment from web services, fulfillment and warehousing centers to logistical hurdles,
prime video and many more etc. From just the go-to website for books, electronics and
cookware, Amazon is now one of the world’s largest and most powerful technologies.
Reference:.

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2019.
6. Lotz, Amanda. "'Big Tech' isn't one big monopoly – its 5 companies all in different
businesses". The Conversation. Retrieved May 16, 2019.
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