AMAZON CASE

SARIN RAJU
CET,TRIVANDRUM
LEVEL ANALYSIS
1. PRE-STRUCTURAL LEVEL
WORLD’S LARGEST ONLINE STORE

2. UNISTRUCTURAL LEVEL
WIDE GEOGRAPHICAL EXPERIENCE-5
INTERNATIONAL STORES-’WHOLE WORLD
IS MARKET PLACE’
3. MULTISTRUCTURAL LEVEL
BUYER SALE APPROACH,MULTI-LEVEL E-
COMMERCE,MULTIPLE PRODUCTS AND
CUSTOMER TRAFFICKING

4. RELATIONAL LEVEL
MULTI-TIER INVENTORY MODEL-VERY LOW
FIXED COSTS

5. OUT OF BOX
LEVERAGED ON THE STRENGTHS OF BRAND
VALUE AND BUSINESS MODEL
QUESTIONS
AND
ANSWERS
1. Why is Amazon building more warehouses as it grows? How many
warehouses should it have and where should they be located?

Answer: As it grew, the company added warehouses, allowing it to react

more quickly to consumer orders,
It is clear that when the no of warehouses increase the response time
decrease, and when the no of warehouses decrease the response time
increase. So by increasing the no of warehouses and locate them near the
customer will improve response time .

Amazon has about 50 warehouses, 20 in U.S and rest 30 in Canada,

France ,Germany , Italy , United Kingdom , China , and Japan.
2. What advantages does selling books via the internet provide over a
traditional bookstore? Are there any disadvantages to selling via
internet?

Answer:
Now a days world has become global village that’s why there is a need to
start business via e-commerce as we know e- business affects customer
service elements such as product variety, availability, customer experience,
time to market, visibility, and return- ability.
Amazon offers a much larger selection of books than a typical bookstore.
Offering the same selection at a retail store would require a huge location
with correspondingly large amount of inventory.

Disadvantages:
Response time
Transportation cost
3. Should Amazon stock every product it sells?

Answer: No …. It should stock those products which are in higher demand.

4. What advantages can bricks-and-mortar players derive from setting
up an online channel? How should they use the two channels to gain
maximum advantage?
Answer: The performance of traditional bookstore supply chain can be
improved significantly by combining the strength of the retail and online
channels. It is important to realize that the benefits of aggregation are most
significant for low- demand books whose demand is hard to forecast.
The book supply chains should be structured so that retail outlets carry
many copies of best sellers for customer purchase and one copy of low
demand books to encourage customers to browse and make impulse
purchase. Terminals or internet kiosks should be provided so that
customers wanting to order low demand books that the bookstore can
offer.
This approach allows the supply chain to reduce inventories by
aggregating low demand books sold online while keeping transportation
costs low for best sellers sold at retail store.
5. What advantages/ disadvantages does the online channel enjoy in sale
of shoes/ diapers relative to a retail store?
Answer:
Advantages:
1. Time to market
2. Flexible pricing, portfolio, promotions
3. low facility cost
Disadvantages:
1. Transportation cost
2. Response time
3. IT cost
6. For what products does the online channel offer the greater advantage
relative to retail stores? What characterizes these products?

Answer:
Online channel offer the greater advantage for those products having large
product varieties.
For example; Netflix offers a much large selection of movies than any video
rental store, offering the same selection at a store would require a huge
location with correspondingly large amount of inventory.
AMAZON BASIC SUPPLY
CHAIN
Supply chain drivers
Facilities:
warehousing and order-fulfillment for third-party
sellers
49 fulfillment centers across globe
United States – 14 spread across 14 states
Canada – 2
France – 3
Germany – 7
Italy – 1
United Kingdom – 8
China – 8
Japan – 6
TRANSPORTATION
Transportation
rely primarily on national parcel couriers
UPS, FedX
Own logistics network
INVENTORY
BOOK SHELF OF AMAZON
Inventory
SOURCING
PRICING
Pricing
Amazon does make millions of price changes
daily
HIGH- LOW PRICING
HIGH PRICE FLUCTUATIONS
Information
Amazon web service: allow partner retailers, the
individual sellers and developers to advertise
their products through Amazon.com by building
their web based applications in a reliable,
scalable, and low cost way.
Simple storage service: designed to make web-
scale computing easier for the business partners
and developers by web service interface to keep
and receive any data, any time, from anywhere.
Smart analytic search: allow detecting and
decreasing the examples of fraud in Amazon web
site by analyzing the behavioral patterns of
fraudsters and designing the predictive scores.
INFORMATION:AMAZON
SERVERS
INFORMATION :AMAZON CLOUD
STORAGE
STRATEGIC FIT
AMAZON STRTEGY ANALYSIS
Strategic fit
Competitive strategy
Respond to wide range of demand
Fulfill orders in short lead time
Meet high service level
Supply chain strategy
Both cost effective and responsive
Facility: more towards centralization
Inventory: high
Transportation: Faster
Information: high investment
Cyclic view
THANK YOU