This action might not be possible to undo. Are you sure you want to continue?
com Case Study
By, Hariharan J MSIS Number: - M00381388
5. Jewellery sales increased by more than 100%. and customers can make use of that offer. Amazon launched A9. Amazon restructured its multiple site locations with the closure and development of various facilities. 6. Amazon started facing pressure from traditional retailers. Number of changes within Amazon’s international operations was carried out. where customers can intimate Amazon.1. music and videos.cn.com also found itself subject to number of litigious actions from various companies like cartiers’s.com. opening development centres. Amazon. During “Thanks Giving Holiday shopping Season”. 6. 3. because traditional retailers started expanding to the web. This caused lots of logistics challenges and cost. Also introduced a feature. Amazon. Ranking 2 behind Netfix. which were china’s largest online retailers of books. 8.com. 10.com each year from 2004 to 2006 2004:1. Which made an remarkable sales in Electronics goods. And the price of the same was reduced to all the customers. Expanded its product range to Herbal remedies to Outdoor Equipment. 4. Amazon. Started Hiring more Computer scientists and Software engineers for further innovation for customers. 8.com. “Search inside the book” concept was launched in 2004. Amazon. Launched more product categories like “Beauty” and “Jewellery”. 3.com about the same. 9. which was created for building innovative search technologies that integrated multiple sources. 5.com increased its dominance in online DVD sales.com faced some technological problem.com and Joyo. 9. A study of e-retail sites by FGI Research revealed that Amazon had continued to be a “High Flier” in customer satisfaction. Acquired Joyo. like closing Taocoma call centre.com 4. Toys’R’Us. strategic partnerships and innovations during 2005.com hired gemmologists and jewellery experts. came with another feature like “Gold Box”.com was given special discounts. Numerous companies turned to Amazon to power their websites. 2005:1. . where offers were given for every click. Opening new distribution centres . Analyse Amazon. 2. And beauty Store added more sales to Amazon. For which Amazon. 2. people who used A9. Heavy investment was made in technology and shipping promotions compromising on profit margin. who offered more customer service options like store pickups for online orders and store returns for online purchases. There were assortment of acquisitions. 7. because of which it lost 1000’s of customers. 7.
Amazon covered customers from china. 2. Amazon eliminated the warehousing for books. What do you consider to be Amazon’s unique resources and strategic capabilities? 1. because of which more customers took the membership.integrated multiple sources and had access to most of Amazon’s establishment search capability. Through Booksurge and Mobipocket . section or chapter in entire book. 4.cn(acquisition) Strategic Capabilities:.provided “print on demand”. Amazon continued to focus upon global expansion. Resources :.Using these acquisitions. 3. 5. 4. Resources :.2006:1. amazon could directly forward the orders to the printers and ordered them to drop the books directly. Resources :. Amazon was continued to be seen as the “Gold Standard” in customer satisfaction for online shopping. .A9.Booksurge and Mobipocket(acquisition) .introduced unlimited 2 days shipping.com.Joyo. Many new innovations were included. By doing so. 2.com and Joyo. “Amazon Pages and Amazon Upgrade” – provided customers to access any page. Amazon released “Amazon S3” (Simple Storage Service). Resources :. 3. Resources :-Computer scientists and software engineers Strategic Capabilities:. this web based services offered the latest ICT standards.based web services interfaces for the developers 2. it was helpful for producing profit on low and uncertain demand.to give more innovation to the customer. like Alexa Top sites Web services.Amazon prime membership program Strategic Capabilities: .“Amazon Pages and Amazon Upgrade” Strategic Capabilities:Booksurge . Amazon connect.com Strategic Capabilities:.
com and drugstore.com Amazon could offer new products for sale in their existing market SWOT ANALYSIS: AMAZON. secure due to integrated operations. Market Development – through the opening of distribution centers and the launching of websites in the UK and germany Amazon offered their existing goods and sevices for sale in new markets.COM Strengths: · · · Reliable. Patented customer technology. Weaknesses: · · Huge amounts of inventory and high inventory turnover.com name itself. consumers have brand loyalty and trust. . The Amazon.Amazon seem to have chosen thwo of the four growth strategies: 1. such as one-click buying. 2. Took seven years for the company to make a profit. Product Development – through the acquisition of several online companies such as pets.
· The continuous changing of trends in the marketplace.com brand has been diluted by entering a wide number of product segments. increasing competition • Need to restructure business to drive toward profitability has meant upward pressure on prices • • No offline brand presence Insufficient community added value • Now competes as a mass merchant.g. allowing specialty stores to identify with particular segment.Tools. eBay.books. Strategic alliances with companies. eToys .com. and half.com.com. · Book publishing companies could start up own website and get rid of the middleman companies such as Amazon. e.Toys. • Customers need to return products through third parry delivery services.Opportunities: · · Create a higher international market segment. Barnes and Noble . even for ToysRUs merchandise . Strengths • • • • • • Well established web brand Loyal customers base of over 12million shoppers Distribution facilities to handle growth and fulfillment Leader in use of technology to delivery targeted content Excellent offline customer service Building international presence in markets outside of the USA • Has moved away form being a low price supplier of books toward a focus on delivering outstanding service at a price Weaknesses • Amazon. Home Depot . Threats: · Competitors such as Barnes and Noble.
. most .com stands for • Shopping bots make it easy to find books. like The Gap and Eddie Bauer. The company identifies keys to success and uses them to gain a advantage over their competitors by partnering with other online retailers because of their technology and distribution centers. music and videos at lower process elsewhere • Amazon's lack in-depth community leaves it exposed to customer being attracted to competitors with more in-depth content • Barnes and Noble may establish itself as the world's dominant book eRetailer with its ability to provide better services and a physical presence .• No telephone support Opportunities • Opportunity to establish itself as a global mass merchant leader in the online shopping arena • Building community events around the brand would help create brand affinity as well as loyalty • • Establish 24x7 hour telephone support for customers and order processing Frequent shopper discounts will increase retention and repeat purchases • Further offline partnerships can potentially help Amazon by allowing customers to return products offline stores Threats • Success in mass merchandising typically requires low prices • Diversification of product assortment may result in diluting the brand identity leaving shoppers unsure of what Amazon. Also they partnered with brick-and-mortar retailers who did not have the e-commerce expertise.com’s website. to sell their goods through Amazon. This helped them take advantage of the competition because of the stock market collapse and internet stocks. The Company’s Current Strengths and Weaknesses Strengths Amazon has entered into contracts with numerous retail partners. which in turn creates more business for the website.com company’s cumulated losses and ended up going bankrupt. Another strength of Amazon is the number of households with internet access is expected to increase as time passes world wide. This type of partnership is known as the powered by Amazon and allows companies to use the technology.
the Internet Tax Moratorium law was up for renewal. so they do this in partnership with third party sellers in different ways. The following can be considered to be the primary sources of Amazon’s competitive advantage: . Target. What are Amazon’s primary sources of competitive advantage? Analyze how they built their competitive capabilities over the years.com’s markets. and was able to pass savings on to the customers. Another weakness is the lack of face to face customer service. Eddie Bauer.S. The company’s competitive market position within its industry Threats One of the environmental threats facing Amazon was the overall economic malaise of the U. The Founder of Amazon was faced with the task of developing an effective differentiating enterprise wide strategy to prosper against the competition over the intermediate and long-term futures. Nordstrom. with retailers like The Gap. The stock market pressured the company to produce consistent operating profits and to prove that its business model worked financially over the long term. and Toys “R” Us. The goal of Amazon is to gain market share and not to produce a profit. therefore generating a large amount of working capital. Amazon made use of the partnerships and affiliation agreements to supplement its own product lines. The Company’s Current Environmental Opportunities and Threats Opportunities The company reacts to opportunities and threats by building a place where people can come to discover anything they might want. From a financial position.Weaknesses Pressure from the stock market as well as decreased customer confidence levels and an increase in the unemployment rate were weaknesses the company faced. the more sales that Amazon. III. the greater increase in profit margin on the items sold. Due to low overhead. this could be a weakness for the company at the time. They realize they can’t sell everything people want directly. and world economies.com had. 1. This is due to Amazon being able to collect payments immediately for sales. with no assurance of its being extended and online stalwarts EBay and Yahoo were expanding into Amazon.
Amazon’s competitors are at a disadvantage because their costs are significantly higher than Amazon’s costs.” Each customer had a Web page personalized based on his or her recent purchases. This is because its content and e-Commerce tools have served as a powerful differentiator. and one-to-one marketing is the forte of Amazon. the company established direct relations with Publishers to obtain better discounts but at the same time. Technology . Sahlman. such as Barnes and Noble. and Borders use brick and mortar as their main distribution channel. products and services. It can be argued that Amazon has successfully created a “community feel” with its customers. Roberts.It has provided one of the largest locations for consumer choices in product categories such as books and electronics. community building. 2002). Once the volumes increased. • Distinctive Procurement Strategy: Initially. Content includes product enhancements (Software patches for glitches). Strong Brand . Thus we can say that Amazon excels at customer intimacy. it kept in mind the inefficiencies of the operations.• Use of Internet: Amazon uses the internet as the sole method for selling goods to its consumers. 2002). a very modest inventory in its warehouses and a heavy reliance on the wholesalers(Ingram and Baker & Taylor) helped Amazon to have a very rapid inventory turn (70 in 1996) and hence it had the growth in revenue needed for a company to grow in its initial growth stage. Amazon’s competitors. Roberts. Strengths Customer Intimacy -The degree of customer intimacy. allowing Amazon to sell the same goods at a lower price. It is successful in providing complete end-to-end consumer experience (Leschly. It has provided a high degree of personalization. This has been achieved by continuous innovation and by keeping customer satisfaction as its main focus (Leschly. a. & Thedinga. & Thedinga.Amazon has become synonymous with online book retailing and now has become an umbrella brand extending to various items.It is able to retain the customer participation through its superior innovations technology. This is the equivalent of having a unique storefront for each customer in hopes of drawing in as many return customers as possible. Roberts. Sahlman. . personalized interactions and problem resolution (updates of delivery schedules and e-mail responses). This method of using many store fronts is extremely costly. Sahlman. Huge Choice . and comprehensive information about its products including customer reviews and ratings (Leschly. & Thedinga. 2002). easy to use features and check out process. This can be supported by the fact that it is one of the most popular websites globally. and by virtue of its omnipresence and comprehensive information management systems has garnered superior knowledge of consumer purchasing habits. and competitive pricing as compared to traditional brick and mortar stores and other online retailers. Thus. • Amazon Uses Web-based Model to Personalize Service: Amazon attempted to use personalization to “build the right store for every customer.
com image (Leschly. Sahlman. Strong regional competition . & Thedinga. It has such a large product category base that it has to focus itself on certain product categories to avoid brand dilution. the company is only making profits of $22 million on revenues of $1.1 billion. like it is with the books (Leschly. Sahlman. Roberts. 2002). No Manufacturing Facilities . such as clothing. & Thedinga. Rigidity . Opportunity of alliances – This could create a broader market without the having to manage everything. . It also creates issues with trust. & Thedinga. This can be referenced int the SEC filings for the year 2003 ("Amzn . hassle of Business 2 Business transactions are increasing considerably – This generates additional revenue from consumer transactions ("Menlo logistics on. even though Amazon has posted a profit in the 3rd quarter 2003. Roberts. This could lead to degradation of the Amazon. c. 2002). Roberts.Lifestyle changes. & Thedinga.This leads to dependence on the suppliers and their cost efficiency." 2003). Yahoo. Dilution – Amazon. Sahlman.com. Trend of consumerism and online business increasing . Moreover it is not so successful with the other product categories.Increased competition through eBay. d. Amazon is forced to trust the suppliers of items they don’t store to ensure customer satisfaction. after interest is paid." 2000).Multinational Organization – Amazon is physically present in 6 countries.amazon. Sahlman. and Google (Leschly.It has become a big organization having sales of more than $1 billion which has led to red tape political dependency and rigidity. Threats Increasing governmental regulations – Anti-trust regulations and possible dismissal of the state tax moratorium make operations and expansion harder to complete . which creates gaps with other products (Leschly. Sahlman. 2002). Opportunities Economic development of Asia and other developing countries such as India – Even though the United States is in a recession. 2002). 2002). population. Roberts. & Thedinga. b. and demographics favor online retailing and consumerism (Leschly. the global economy in some key areas are experiencing economic growth (Leschly.com is trying to do revamp anything and everything which is hampering its image. Roberts. & Thedinga. Roberts. Sahlman. Weaknesses Weak Financials – As stated above. 2002).
Using current technology adherence to legal. toys and games. There are also opportunities for Amazon to build collaborations with the public sector. it is rumoured that shipping costs could be up to $500m. and such a high figure would undoubtedly erode profits. DIY and more. This would confuse its consumers and endanger its brands. It is a fair strategy since one could visit a more local retailer. London. based upon preferences demonstrated through purchases or items visited.9m) from $76m in the same period in 2004. . Toy-R-Us is the number one retailers for toys and games. and pay no costs. British retailer Marks and Spencer announced a joint venture with Amazon to sell its products and service online. Opportunities. The benefit is that customers c an search for rare or antique books. This enables them to offer to an individual specific items.75bn. Toys-R-Us and the NBA. Amazon is a huge global brand. many of the new categories. and now has product categories that include electronics. For example the company announced a deal with the British Library. It was one of the original dotcoms. for example automotive. In 2005 profits for the three months to June dipped 32% to $52m (£29. Challenges of legal. Amazon is the number one retailer for books.5m books on the site. may prove to be too confusing for customers. The company may at some point need to reconsider its strategy of offering free shipping to customers. As Amazon adds new categories to its business. due to its huge initial set up costs. In the same way. meaning it has details of more than 2. It has built on nits early successes with books. The company carefully records data on customer buyer behaviour. However. For example. The company is now increasingly cashing in on its credentials as an online retail pioneer by selling its expertise to major store groups. Weaknesses. in 2004. which made it one of the first online retailers.Using the Internet effectively to increase the reach to consumers while reducing the integration cost.Technological changes and emergence of new technologies . and over the last decade it has developed a customer base of around 30 million people. Other recent collaborations have been with Target. or bundles of items. Amazon's new Luxembourg-based division aims to provide tailored services to retailers as a technology service provider in Europe. security and privacy issues . The library's catalogue of published works is now on the Amazon website. The recent dip is due to promotions that have offered reduced delivery costs to consumers. to ensure Strengths. Imagine if ToysR-Us began to sell books. It was an early exploiter of online technologies for e-commerce. Until recent years Amazon was experiencing large losses. it risks damaging its brand. security and privacy concerns. Customer Relationship Management (CRM) and Information Technology (IT) support Amazon's business strategy. It is recognisable for two main reasons. Sales jumped 26% to $1. Amazon is a profitable organization.
strategic alliances and mergers could see Amazon losing its top position in some markets.oppapers. http://www. it may become more and more difficult to differentiate the brand from its competitors.com/essays/Amazon-Case-Study/493179 http://www. The deal was reported to be worth around $75m (£40m).com/essays/Amazon-Com-From-Start-Up-To-2004/639641 http://www.davechaffey. The products that Amazon sells tend to be bought as gifts.com has many similarities to its new owner.com . may entrench overseas and compete with them on foreign fronts. by trading in overseas markets in different cultures such seasonality may not be enduring. It also has a huge range of products. movies. price competition could damage the business. especially at Christmas. In 2004 Amazon moved into the Chinese market. Since Amazon sells the same or similar products as high street retailers and other online businesses. Otherwise. Joyo. and music at discounted prices. toys. Joint ventures. by buying china's biggest online retailer. Those domestic (USbased) rivals unable to compete with Amazon in the US. Threats All successful Internet businesses attract competition. However. International competitors may also intrude upon Amazon as it expands.oppapers.com/E-commerce-Internet-marketing-case-studies/Amazon-case-study/ .oppapers.oppapers. Joyo.com/essays/Amazon-Case-Study/451448 http://www. in that it retails books. Amazon does have it s brand. This means that there is an element of seasonality to the business.com/essays/Case-Study-Of-Amazon-Com/706819 http://www.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.