'Amazon.Com Case Studies\r'

'Name: PRASHANTH BALAKRISHNAN Student ID: 071090070 Course: BIS 541/03 â€MANAGING culture SYSTEMS Program: CEMBA Commonwealth decision maker Master of product line and Administration TMA 1: â€Å"virago. com”- A Business bill Tutor: Prasanan P. T. Kannan Submission Date: 07. March. 2009 [pic] TABLE OF confine ChapterTitlePage 1. 0Executive Summary 2. 0 puzzle Statement1 3. 0Analysis of Ca engages 3. 1 virago’s Debt 2-3 3. 2 Competition3-4 3. 3 elaboration4-6 4. 0 downslopeision Criteria and Alternative Solutions 4. 1 Reduce use of goods and servings in inventories and better management7 in supply string 4. Presenting a competitive edge to competitors7 4. 3 Expansionto Asia8 5. Recommended Solutions 5. 1 Technology Integration and R&D9 5. 2 strategic Cost Analysis9 5. 3 preeminence9 5. 4 arsenal10 5. 5 Laputan & In boundative10-11 5. 6 Keep nodes in the loop on e re whollyything11 5. 7 Shipping & Deli rattling11 5. 8 Expansion to Asia spher e11-12 5. 9 volume-of rima oris advert12 6. 0 Expand the product lines13 6. 0Appendices14-16 7. 0References17 Executive Summary The study comprises of amazon. om which started its history by selling word of honors and now iodine of the online grocery loss leaders globally non only when for books but products from various categories. come with started with a mission to be Earth’s most guest centric company. In methodicalness to become the largest and convenience online store for all, thither argon major troubles or threat macrocosm face up by virago. com in succeeding its mission. The major occupations ar virago facing high amount of debt, it’s less initiative in non widening to some different developed countries, and withal competition from late(prenominal) online retailers and mavin tough opp whizznt is Barnes & Nobles.\r\nMany plans of operations can be lotn and some of it is; virago. com should decrease long†depot debt by incre asing expenditure on chequerk and development, increasing word-to- blab out advertisement and good customer service. virago. com should in like manner expand the louvre most common deliverys in Asian neck of the woods. Focus merchandise strategies on customer feedback to find out what Asian customers tend to grease ones palms and forgeting to devolve on. Strategize new plan on improving sites to be informative and attractive as much as possible so amazon. com should to a fault adapt to the stovepipe technology where it can digest as a strong innovator in ever increasing retailer market.\r\nAmazon. com also essential strive to give customers the best service in transfer and deli actually as it’s an authorized scene in online logical argument to out unit of ammunition its entire competitors on this online industry. Problem Statement The master(prenominal) problem faced by Amazon. com now creation an online retailer can be divided to one-third in overall. Amazon. com is in confronting capacious debt behind their flourishing screen. Amazon. com is need of expansion to other regions or Asia which be utter as some other big market for a huge online bookseller as Amazon. com.\r\n some other problem is the competition being faced by them with one of the tough opponent as Barnes&Nobles. Analysis of the Problem Amazon. com’s in Debt 3. 1 Amazon’s Debt One of major causes of Amazon’s huge debt is its large expenditure. In recount to take note its expedient position, Amazon has no choice but to run put to spend astronomical amounts of money on sales & marketing, re assay & development and general & administrative approachs. (Table 1 & Table 2) â€Å"One misstep, and its love affair withe investors and sources of capital could be over. (Kimberly Weisul, 1999) • Competitors Although Amazon won the involution soon afterwards entering the online cd and melody market, thither a tomic number 18 some competitions in other product lines that may be too immensely strong to beat. For example, in March of 1999, Amazon introduced an sell service. After a few months effort, its auction product line performed slightly, indicating how elusive it is to challenge the giant’s eBay and hayseed! Auctions. |Auction Sites |27-Sep-99 |Multiplier needed to equal eBay listings | |Amazon Auctions |4. 0% |15. 3 | |eBay |73. 60% |  | |Yahoo! Auctions |21. 60% |3. 4 | denotation: Auction tissue sites and C. E Unterberg Towbin • Consumer Behavior Amazon. com is widely regarded as having one of the best management team of any profits company. However, at that place atomic number 18 some outside forces that atomic number 18 not easy to manipulate. Security; as the yield of earnings crimes profits, customers argon becoming awargon of the possible hazard involved in the process of on-line shopping. This hostage problem may not be difficult to improve sin ce security technology is innovated quickly, but to dispose customer of this is not as easy ? Etailers vs. retailers Another factor is hard to manage customer acquire habits. just active consumers still prefer the capability of seeing a product before bargaining it. supplyitionally, the numeral of people buying personal computers and that of the Internet state entrust directly affect Amazon’s sale. . 2 Competition • Michael Porter’s standard ? supplier ; Amazon started to build its own scattering centers in different locations and moving the products directly form the factory rather than from other distributors such that Amazon can disappoint its marginal cost. (Chao Janice C. Rice, Brandi S. Dec 8, 1999) ? Consumers ; Amazon. com continues to spend a lot of money in advertisement to r each(prenominal) customers as well as to summation customer sensory faculty of eCommerce in general and scrape name in particular. (Chao Janice C. Rice, Brandi S.\ r\nDec 8, 1999) ? Substitutes; The Substitute of eCommerce, the handed-down retailers, is still more(prenominal) than attractive than the Etailers. For example, we as consumers more than likely would rather go to the bookstore and buy at through a book before we buy it. (Chao Janice C. Rice, Brandi S. Dec 8, 1999 ) 3. 3 Expansion • Lack of Spanish website version (Latino and Hispanic Americans are the fas establish- takeing online ethnic group) • Amazon. com is very less popular or it can said on that point are people without knowing the creative activity of Amazon. om • Website is not more expanded with more languages woofs where soon there are options only for Canada, United Kingdom, Germany, Japan, France and chinaware (www. amazon. com) Competition with Barnes& Nobles Amazon. com Weakness ? Difficulties of handling large number of customers ? Limited ope place history ? Security knowingness ? Low margins in the sector ? Risk of institution of wr ong new categories which could damage company’s brand ? Company’s offered lax conveyance might affect future financial answer ? Certain products (high volume/weight) put up high transfer costs which could confront with local offline retailers\r\nThreats ? eBay, Barnes & Nobles, and Wal-Mart ? Population surgical incision not targeted to on-line sales due to their lack of internet access ? Weak economic slaying of Germany and France in the last year ? Competition will increase due to the low barriers to entry in the market: offline companies are coming online ? Heavy investments in Partnerships (Dustin Nadeau & Donatas Sumyla. April 2006) Barnes and Nobles and Amazon. com are competing, but both stores and other online stores mark what works and are studying one another †often duplicating one another’s origin strategies.\r\nThis has resulted in them having more akin(predicate)ities than differences and it assistants the consumers find si milarities across the Web such as; • When a description of an circumstance is given, Amazon and Barnes and Nobles both place the shopping pram option prominently screeninged to the upper, right portion of the screen. This makes it very efficient and useable for the viewer and they do not have to search around the page for this button. (Clementina Imobhio may 5, 2001) • In pricing, both Amazon. com and Barnesandnobles. com display the average expenditure or their items above their own discounted rates so that the users feel as though they are speech money. (Clementina Imobhio May 5, 2001) • both sites are â€Å"Flexible”, there is an option of buying things at a later(prenominal) date and placing them in the shopping cart temporarily. This option is called the wish list and it is displayed just beneath the â€Å"Add to Cart” button. Users can access this saved culture and access it on their next visit. (Clementina Imobhio May 5, 2001) • B oth sites offer â€Å"Security” that provides safe shopping, privacy and dexterity by requiring customers to join as members at a certain point during a transaction.\r\nMembership is free and requires an email address, full name, home address and recollect number. It allowing customers to maintain an order location and helps provide a history of what they bought. (Clementina Imobhio May 5, 2001) •  Both sites are very â€Å"Scalable”, allowing for a huge selection of items to be added to the product catalog or taken away. A Field size is accommodated in the database. (Clementina Imobhio May 5, 2001) 4. 0 Alternative Solutions 4. 1 Reduce expenditure in inventories and better management in supply drawing string ?\r\nUse increased income to pay down long debt ? Keep operating costs low (efficiencies of scales) ? make up expenditure on Research & Development landing field ? Strategic cost analysis ( WOU , MIS notes) ? Determining Differentiation ( WO U , MIS notes) 4. 2 Presenting a competitive edge to competitors • take a shit more expertise in marketing and more product launches compared to competitors; • Do a more through research on the customers needs and come up with something new that has its own brand and establishes as only Amazon. om could have the product. (Sujan Sarkar. April 23, 2007) • A new Strategy on only books should be brought up in order to outcome one tough opponent as Barnes & Nobles. For example, Amazon. com’s booth’s can be set up in country sides where there is no access for Internet and give noesis to country people that there also contrast through online. This is because; giving more expo sure as shooting and awareness to people might be a business opportunity as well. • Product review entropy; Customers would have n a clear description, outline and other customer’s review on the book as it gives a clear rating of the book and there won’t be any sort of disappointments for them after purchase. 4. 3 Expansion to Asia • Create different website versions based on the five most common language in Asian region • Focus marketing strategies on customer feedback to find out what Asian customers tend to buy. • Word of mouth advertisement (Onder Savas Devrim Dirik. January 9, 2003) • Continue expanding its product lines 5. 0 Recommended Solution & Implementation 5. Technology Integration and R&D Amazon. com should increase expenditure in the research and development arena. We believe that Amazon should prepare itself for spare tele converses implementations such as high speed internet and network security. These types of implementation, though representative of considerable R&D costs, are probably most strong factors that etailers must prepare for near future. As users, connections increase in speed, any delays on the part of the etailer they are connecting to will become obvious and less tolerable.\r\nAmazon can stay ahead of the pack by preparing a unique and comfortable interface for the users. 5. 2 Strategic Cost Analysis Amazon. com should also use Strategic cost analysis process where localise the firm’s range chain, diagnose the expose elements that drive the costs of each value activity, identify competitors value chains, develop a dodging to lower relative costs by controlling cost drivers, ensure that any cost reduction does not erode differentiation in service and test the cost reductions if its sustainable in the end of the analysis. . 3 Differentiation They should also consider by costs by determining Differentiation where the process goes as determine who the real purchaser is, identify buyer’s value chain and put in rank order the buyer’s causa to purchase, asses the current potential sources of diffentiation, identify the cost of these resources, mark a value chain to maximize value relative costs, test for sustainiablity and reduce costs in activities that do not affect the chosen forms of differentiation. 5. Inventory; There are programs built to be super user-friendly, and most offer great support on the way of usage for online businesses to maintain the book database. Amazon should invest in software to best set off and maintain the data on the site and significantly back up systems. Keep inventory consummate and up to date; This is also an important aspect that Amazon can out beat its competitors with as this is first step towards building a long-run relationship with that customer.\r\nInventory of the books stock-out and sold out will be kept up to date on the site. 5. 5 Visionary & Informative A word picture is worth a thousand words; Uploading pictures by decreasing explanations or descriptions could attract customer’s attraction and curiosity in exploring the book. Somehow it throw outs up sales compared to other online booksellers who give attention in words. Product R eview Information; In fibre of books, editorial reviews are provided by the company and it applies for all books. Customers can also rate each other’s review.\r\nA rating is placed against each review so that customers can decide whether to get a line or not based on that. Most online booksellers do not include this but they display the customer’s satisfaction on the address service provided by them which is less important to boost up sales. People out there indispensability to pay you for your books; Amazon should use own merchandiser service account or a service offered by a listing site, make sure that customers can buy books quickly and painlessly with a credit card while you have them on the brink of finalizing said purchase.\r\nDon’t suppose a book by its cover; offset printing impressions are lasting impressions. When a customer receives the book they’ve ordered, make sure the first thing they see is a product and package that you are steep to have supplied by using use clean, new boxes without writing (or envelopes for low-cost paperbacks) for shipments. Customers will be expecting an superior service but if its vice versa then they are chances for them to switch to other online retailers. 5. 6 Keep customers in the loop on everything;\r\nAmazon should update the status of order to customers on the order made and also keep them in loop by netmail the listing service directly with questions about their orders and keep updating the latest events and new stocks of books through emails. 5. 7 Shipping & Delivery Follow-up; After shipping out an item to the customer, Amazon should send them an netmail a day or two after expecting that they’ll receive their package, asking them if they’ve received it and are satisfied, and reminding them that there customer rep are there to help should they have any questions about their order.\r\nThis is also a great time to remind them that you have similar items in stock or to offer them a coupon towards future purchases. 5. 8 Expansion to Asia Region Amazon should strive to expand its expertise to Asia region as well as high potentials are there which huge population. Education is becoming one important aspect in Asia and lack of important reference books are al ways a problem in many parts of Asia. It should alter its marketing capability in Asia too to capture the market. Amazon is very less popular in Asia regions. Amazon. om should take Asia to consider for its business expansion. Amazon could also diversify its marketing and research ability to expand broadly to the developed countries of other territory. In order to grow big and always sustain in the market and competition, Amazon should takes this sort of steps to expand. International Sites; Amazon. com has got an added expediency of international sites on Canada, United Kingdom, Germany, Japan, France and China. All about what the customers have to do to browse the site with their language is by clicking to their national site.\r\nFor example, if you clink Japan, immediately the whole website will change its descriptions and instructions into Japanese language. This is not at all applicable for a customer in Malaysia or any other regions of Asia. It should expand and add more languages options in its site to gather up its customers. Giving customers what they want is also one strategy not all online business can do but if this can be proven in Amazon’s case then it have all the potential to be the one. 5. 9 Word-of mouth advertisement Amazon also should increase its word-of mouth advertisement.\r\nThis might seem odd for an industry leader to rely upon such a quaint manoeuvre as this, but we truly believe that in the world of Internet this is a powerful tool. We are quick to visit sites that our friends identify as being fabulous, and Amazon might capitalize on this by rewarding its customers who can reel in a new prospects. 6. 0 Expand the product lines Amazon should expand its product lines. Given’s Amazon’s vision and its unique position in the etailer industry, the cost associated with entering new markets is significantly lower than that of its competitors.\r\nThere is no reasons to let this advantage pillowcase away unused. Conclusion In order to stay focus on business Amazon. com has various ways and strategies that can be implemented with proper organizations communication networks. Financial reports should be reviewed annually and quarterly if essential to come up with decisions whether to boost up sales or to maintain on a certain criteria for the wellness of business. Amazon. com also should have a give away customer feedback program where they could exchange view on the services and products most desired to be acquired online by customers.\r\nTop level management meetings should be initiated to examine goals are achieved. A proper corrective action should be determined after the first year if annu al objectives weren’t accomplished. However there are difficulties and competitions to overcome, and how companies attack these difficulties will separate the winners form the losers. appendix |AMAZON. COM, INC. HISTORICAL INCOME STATEMENTS | |(in millions, except per share data)(quarterly information unaudited) | |Amazon. com Investor dealing | | | | | | | |Calendar Years Ended †December 31, | | |2008 |2007 |2006 |2005 |2004 |2003 |2002 | |Media |  | $ 5,350 | $ 4,630 | $ 3,582 | $ 3,046 | $ 2,589 | $ | | | | | | | | |2,270 | | separate |  | 448 | 326 | 263 | 222 | 130 | | | | | | | | | |110 | |International |  |  |  |  |  |  |  | |Media |  | 5,734 | 4,612 | 3,485 | 2,885 | 2,513 | | | | | | | | | |1,780 | |Other |  | 94| 57| 20| | | | | | | | | |8 |2 |- | | amalgamated |  |  |  |  |  |  |  | |Media |  | 11,084 | 9,242 | 7,067 | 5,931 | 5,102 | | | | | | | | | |4,050 | |Other |  | 542 | 383 | 283 | 230 | 13 2 | | | | | | | | | |110 | Table 2- Source; www. amazon. com (Investors Relations) | come in U. S. Home, Work and University Locations, Unique Visitors (000) | |Source: comScore Media Metrix | |Rank | airplane propeller |Unique Visitors |Rank |Property |Unique Visitors | | | |(000) | | | (000) | |  | tally Internet : Total Audience |191,863 |  |  |  | |1 |Google Sites |151,010 |26 |Target Corporation |28,628 | |2 |Yahoo!\r\nSites |146,131 |27 |Time Warner †Excluding AOL |27,209 | |3 |Microsoft Sites |125,568 |28 |Weatherbug Property |26,944 | |4 |AOL LLC |108,441 |29 |Bank of America |26,322 | |5 | bemuse Interactive Media |90,510 |30 |United Online, Inc |26,048 | |6 | deal Network |74,742 |31 |Gorilla Nation |25,585 | |7 |eBay |72,160 |32 |AT&T, Inc. 25,574 | |8 |Amazon Sites |64,768 |33 |Answers. com Sites |25,563 | |9 |Wikipedia Foundation Sites |62,737 |34 |Demand Media |25,447 | |10 |FACEBOOK. COM |57,232 |35 |CareerBuilder LLC |24,750 | |11 |Glam Med ia |55,293 |36 |Everyday health |24,717 | |12 |Turner Network |54,877 |37 |Shopzilla. com Sites |24,097 | |13 |Apple Inc. 54,194 |38 |Photobucket. com LLC |23,928 | |14 |CBS Corporation |53,539 |39 |WordPress |23,730 | |15 |New York Times Digital |49,110 |40 |Real. com Network |23,359 | |16 |Viacom Digital |46,510 |41 |Expedia Inc |22,703 | |17 |Weather Channel, The |40,056 |42 |JPMorgan Chase Property |22,399 | |18 |craigslist, inc. 39,437 |43 |Monster Worldwide |22,244 | |19 |AT&T Interactive Network |38,184 |44 |Gannett Sites |21,829 | |20 |Adobe Sites |35,315 |45 |WorldNow †ABC Owned Sites |21,586 | |21 |Comcast Corporation |33,940 |46 |WebMD Health |21,185 | |22 |Wal-Mart |33,513 |47 |iVillage. com: The Womens Network |21,002 | |23 |Superpages. com Network |32,558 |48 |NBC usual |20,974 | |24 |Verizon Communications Corporation |32,412 |49 |WhitePages |19,351 | |25 |Disney Online |30,345 |50 |ESPN |19,266 | Table 3; Media Matrix; http://www. comscore. com References 1] Chao Janice C. Rice, Brandi S. Dec 8, 1999 http://www. rhsmith. umd. du/faculty/jbailey/ents630/amazon. pdf 2] Dustin Nadeau & Donatas Sumyla. April 2006- Amazon. Com Inc 2004. (Accessed Feb 20, 2009) 3] Clementina Imobhio May 5, 2001 †E-Transaction: Shopping Carts Comparison (Accessed Feb 20, 2009) 4] capital of Minnesota Larson. February 14, Amazon. com †Motley Fool Research, Stock Report http://www. fool. com/search/index. aspx? go=1&site=USMF&q=amazon. com (Accessed Feb 16, 2009) 5] Onder Savas Devrim Dirik. January 9, 2003 †Informat? on steering (Accessed Feb 16, 2009) 6] Strategic Analysis of Amazon. com (Accessed Feb 19, 2009) 7] www. wikinvest. com/wiki/E-Commerce, (Accessed Feb 20, 2009) 8] www. ikinvest. com/stock/Amazon. com_(AMZN), (Accessed Feb 20, 2009) 9] www. wikinvest. com/stock/Barnes_%26_Noble_(BKS), (Accessed Feb 20, 2009) 10] Sujan Sarkar. April 23, 2007 †Amazon vs. Barnes & Noble: www. santarosa. edu/~ssarkar/cs66sp0 7/fprj/abn. htm (Accessed Feb 16, 2009) 11] Table 1- Source; www. amazon. com (Investors Relations) (Accessed Feb 17, 2009) 12] Table 2- Source; www. amazon. com (Investors Relations) (Accessed Feb 17, 2009) 13] Table 3; Media Matrix; http://www. comscore. com (Accessed Feb 17, 2009) ———————†AMAZON Supplier New Entrance Substitute Consumers\r\n'