Running head: AMAZON.

COM EVOLUTION 1

Amazon.com Evolution

Brian Schenker, Alisa Marie Rezendes, Lisa Copeland, Christie Mc Clelland

BIS/219 Business Information Systems

January 4, 2010

Juan De La Matta

Amazon.com Evolution
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Amazon.com started as the world’s largest bookstore and rapidly became the most

substantial variety store. Expansion and success thrust Amazon.com in many directions. This

paper will discuss Amazon.com and how they use E-commerce. The company faces scrutiny yet

does not move away from its core competency as an online retailer. Competition proves a wise

strategy between Amazon.com, Google and Microsoft. Database applications handle

relationships among information, knowledge, and data management resolution. Amazon.com

applies e-business and e-commerce for business to business (B2B) and business to consumer

(B2C) needs.

Core Competency

A pioneer of e-commerce was Jeff Bezos, founder of Amazon.com. Bezos left his job as

vice-president of the Wall Street firm D.E. Shaw, moved to Seattle, WA, and worked out a

business plan for what would become Amazon.com (Wikipedia, 2010). The website debuted in

July 1995 and quickly became the number one book-related site on the Web. Amazon.com found

quick notoriety and overnight success, thus such swift ascent left people wondering if

Amazon.com lost focus from its core competency leading online book retail.

The mission of Amazon.com is “to be 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”

(Amazon Investor Relations, 2010, p. 1). Amazon.com is like no other Internet retailer in the

world. The site is customer friendly and relates to all consumer types offering powerful search

capabilities of its 1.5 million-title database. The company then offers 10 to 30% discounts on

merchandise that which makes it affordable. Amazon.com provides other user-friendly touches

such as alerts when new books by a favorite author or subject come into stock, optional gift
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wrap, and the ability for customers to write product feedback. Finally, Amazon.com provides an

alert and tracking number so customers can follow packages upon arrival.

The competitive strategy challenging Google and Microsoft

Consider the historic rises of companies like Amazon.com, Google, and Microsoft, which

all outpaced traditional ideas. Other company management responded by their Information

Systems (IS) support personnel building competitive Websites. Amazon.com, however,

advanced ahead and kept its leadership position on the Web by leveraging its new business

model into other global marketplaces, such as music, electronics, auctions, and more. This new

model in place cleared profitability hurdles by achieving a mix of IS and business basics:

capitalization on operational efficiencies derived from inventory software and smarter storage,

cost cutting, and effective partnering with such companies as Google and Microsoft (Pearlson &

Saunders, 2006). Because Google also began with a unique business model critical for future

success, they used this factor to change people’s thought about Web content with an available

online search format with notably rapid response time.

Amazon constantly develops technology, which is the source of their expansion into new

areas such as its Web-search service. Through its A9 application, Amazon offers user searches,

which locate restaurants, museums, and other particular local places. Bezos’ vision, a disruptive

technology that created a new industry, clarifies Amazon understands the importance of

information and knowledge as wise strategies for use in 21 st-century competitive perspective

(Hitt, Ireland, & Hoskisson, 2007).

Database applications: data relationships and management resolution

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For a company like Amazon to conduct business in the completive market of e-business,

they must ensure a current database able to handle a large volume of information. Some

database challenges for Amazon are constant maintenance and catalog product updates, keeping

a secure site for customer’s private information, and compile all the collected data.

The relationship among Amazon’s data, information, and knowledge is seamless, secure,

and reliable. The data collected by every transaction done on Amazon organizes into workable

information. Some of the personal data collected include “the gender, date of birth, interests,

occupation, education, income level, residence, race and ethnicity of customers for Amazon's

‘gift clustering’ program” (Harris, 2006, para. 11). Amazon transforms gathered information into

knowledge, which evaluates business needs, customer base, and products, which the organization

offers on its website.

Amazon.com use for e-business and e-commerce: B2B and B2C

Amazon is a leading web-based online store, who creates its own web service to help

sellers excel in the e-commerce world. To participate in an e-business, a company would offer all

aspects of business, including human resources department. Amazon does not offer this specific

service, although they do offer tutorials, which help any seller set up, maintain, and organize

products. In the end, Amazon excelled in the e-commerce world by offering both sellers

exceptional service and treating each sale as most important (Amazon, 2010).

B2C and B2B sellers have an opportunity to earn money by selling Amazon.com items;

the company’s own branded storefront, Amazon-backed checkout, and a fraud protection

guarantee. In addition, sellers can set up multiple online stores for the price of one, thus no

closing fees on items sold for a 7% flat commission cost (Amazon, 2010). To further assist
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sellers, Amazon developed Amazon Marketplace Web Service (Amazon MWS). This service

helps seller’s business growth by exchanging product information on listings, orders, payments,

and enables seller communication without human intervention (Rainer & Turban, 2008). Last, by

using Amazon MWS, sellers can increase sale efficiency, reduce labor requirements, and

improve response time to customers.

Conclusion

Although competitors exist now, which did not at the time of launching, some

analysts think Amazon is always one step ahead. Bezos believes that the organization’s

continuing investment in technology allows it to innovate in ways that prevent competitors from

duplicating Amazon’s competitive advantages (Hitt, et al., 2007). With a steady reputation for

reliability, Amazon develops its infrastructure with a source of technological innovations that

allows it to offer customers a reliable and easy-to-navigate way to buy products. These consistent

characteristics in an unstable environment only leave room for continued organizational growth.
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References

Harris, C. (2006). Amazon database would put shoppers' intimate details on the line.

Retrieved from http://seattlepi.com/business/280894_amazon10.html

Amazon investor relations. (1996-2010). Retrieved on December 27, 2010, from Amazon.com:

http://phx.corporate-ir.net/phoenix.zhtml?p=irol-irhome&c=97664

Rainer, R. K., Turban, E. (2009) Introduction to information systems: supporting and

transforming business (2nd ed.), Hoboken, New Jersey: Wiley.

Pearlson, K. E., Saunders, C. S. (2006) Managing and using information systems: astrategic

approach (3rd ed.), Hoboken, New Jersey: Wiley.

Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2007) Strategic management: competitiveness and

globalization (concepts and cases) (7th ed.), Mason, Ohio: Cengage Learning.

Selling at amazon.com (2010). Retrieved on December 27, 2010, from http://www.amazon.com

Wikipedia. (2010). amazon.com. (n.d.). Retrieved on December 27, 2010, from Wikipedia:

http://www.answers.com/topic/amazon-com
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