Category: Amazon

Amazon is an online retail company popular in the West. In 2019, it sought to expand into the UK courier system (Galloway 2019). The courier and express delivery market in the country is estimated at 12.6 billion dollars a year. The program, named Shipping with Amazon, allows the company to act like a normal courier (Galloway 2019). According to company officials, the service office same-day deliveries. Amazon is experienced in delivering parcels and can compete with companies like Hermes, UPD, FedEx, and the government-backed Royal Mail (Ochel & Wegner 2019). The company plans to expand its network of warehouses, allowing retailers to keep stock in there to increase the speed of delivery. The purpose of this paper is to analyze the motivations, market conditions, and the capacity of Amazon to establish itself as a new leader of courier deliveries, using Firm theory.

Market Structure

The firm theory states that all companies seek to maximize their profits while reducing their costs as much as possible (Ward & Begg 2016). This could be achieved in a variety of ways. One way of maximizing is by increasing sales volumes. It allows the company to sell in bulk, reducing costs and expanding market share. Amazon is an online retailer that has been offering delivery services since 2002 (Galloway 2019). Premium 2-day shipping with Amazon Prime available in the US for a yearly subscription of 75$ (Galloway 2019). The company plans to implement the same system in Europe and the UK. Therefore, they are already investing in elements that are associated with courier work.

Amazon is already hiring personnel, trucks, installing package location systems, and setting up warehouses to store goods. These investments accommodate only the customers of Amazon. Lack of scope increases the overall costs of online purchasing, which has to compensate the company for the deliveries. Therefore, expanding the reach of an already established delivery system to include more customers helps produce more profit per dollar invested. Amazon is looking to achieve diversified growth (Ward & Begg 2016).

UK’s market for deliveries is dominated by large companies, such as DPD, FedEx, USP, Hermes, and Royal Mail (Ochel & Wegner 2019). According to the theory of oligopoly, smaller companies cannot compete with larger ones. Inter-state deliveries require scope and volume (Na 2015). Larger companies can afford to produce, service, and deliver in bulk, which is something that smaller companies cannot do (Na 2015). As such, inter-city shipping in the UK is conducted largely by these entities. Local delivery services never go outside their respective city areas.

The market demand for mail and delivery services in the UK is highly elastic (Ward & Begg 2016). Companies that deliver goods are very similar to one another. Speed, safety, and price range are the primary grading criteria used by customers.

Necessity, duration, price, and the availability of substitutes are the primary criteria for market elasticity (Ward & Begg 2016). The service responds positively to all of these criteria. This leaves Amazon with plenty of room to compete in. If they offer a superior service – there is no reason for customers to avoid them.

The primary competitors, as already mentioned, are DPD, FedEx, USP, Hermes, and Royal Mail. Each has their respective strengths and weaknesses. In terms of speed and quality of service, DPD is the primary competitor (Ochel & Wegner 2019). They offer same-day shipping and are already established in the UK. However, they are not as large as other services. FedEx and USP are both foreign companies that have a famous brand name (Ochel & Wegner 2019). They also have significant experience and resources to draw upon to expand their scope in the UK. Hermes is a domestic private company with a long history of serving the local market. The Royal Mail is a government-funded postal service that can afford to work at a deficit, making it the cheapest delivery option (Ochel & Wegner 2019). At the same time, the inefficiency of government-controlled bureaucracy makes it the slowest service. Amazon will have to compete with these companies in order to establish dominance.

Long-Term and Short-Term Predictions for Amazon in the UK

In terms of capacity, Amazon is on par with the majority of its competitors, such as FedEx, DPD, and USP. It has significant financial resources to draw from. At the same time, it has experience of setting up competent delivery systems in a country much larger than the UK. In terms of organizational performance, the company is very competent. At the same time, Amazon is a primarily US-based company. Out of 232 billion dollars of revenue earned in 2018, only 65 were earned internationally (Galloway 2019). The company is not experienced as the rest in the UK market. Finding reliable suppliers, employees, and customers while maintaining adequate delivery costs would be hard.

The prediction for the short-term scale would be that Amazon would not be able to change the face of the delivery market, as many articles state. UK market is already saturated with large companies offering similar services (Ochel & Wegner 2019). To carve oneself a piece of the market share, Amazon would have to be better. During this time period, it is likely for Shipping with Amazon to work at a deficit for the company. Until the economy of scale is achieved, the expanded capacity for delivery will not be in full use (Ward & Begg 2016). Amazon’s brand name alone will not sway customers to switch from familiar systems. Establishing a country-wide delivery network also is going to take time and investment.

Another reason why Amazon will not be able to completely dominate the UK market is that it failed to do so back in the US. Despite being a very popular service, it failed to dislodge UPS and FedEx from its positions. This falls in line with the oligopoly theory of markets (Na 2015). It states that unless a company could come up with a product or a service drastically different and better compared to the competition, it will not be able to push them out of business (Na 2015). There were instances of that happening in other industries. The invention and popularization of personal computers made typewriters obsolete. At the same time, Apple’s iPhone brought down Nokia. Amazon does not have anything that would significantly change the game in the parcel delivery sector (Galloway 2019). Any innovations they would come up with would likely be copied to maintain competition.

In the long-term perspective, it is possible for Amazon to establish itself as one of the major delivery systems in the UK. They are likely to take a certain percentage of market share from the Royal Mail, Hermes, and other companies, disgruntled with the present status quo in one way or another. The high quality of service associated with Amazon may win them additional support. Amazon launched its expansion at the same time Royal Mail employees went on strike (Ochel & Wegner 2019). It made their short-term goals more achievable. Ultimately, while Amazon is likely to achieve its economy of scale, but fails to dominate the market.

Another potential benefit of Amazon’s business diversification is the acquiring of customer data from shipments. According to Customer theory, the company that better knows the needs of its costumers can predict and allocate its resources accordingly to best suit their needs (Haugtvedt et al. 2018). The result is a better and more personalized service. Customers respond well to such behavior, which promises increased brand loyalty and market share. Amazon is notorious for utilizing Big Data in its project. The mailing service would help the company understand the market better and help expand into the online service segment in the UK and into the rest of Europe.

Conclusions

Amazon’s expansion into the courier business in the UK makes sense based on Firm theory and the idea of economy of scale. It will help the company generate more revenue from the long-term perspective. The prerequisites for the expansion include the already-established courier network, the possession of a famous brand name, and the resources required to make it happen. A large potential boon for Amazon includes tapping into customer data to improve its services in accordance with Customer theory.

Amazon will not be able to dislodge its competition from the field. UK’s courier and delivery markets are already dominated by large corporations. The company will not be able to revolutionize the industry to make the already-established companies irrelevant. It will be able to carve itself a piece of the 12.6 billion-dollar market and force the potential growth of service quality from its competitors. In the short-term perspective, Amazon is likely to lose more than gain, as it will take time to establish customer trust and make them prefer the proposed system over what is already available. This development is predicted by customer theory, which states that the majority of people will stay with the familiar brand unless the benefits of a new one are too enticing to ignore. From a Firm theory perspective, these expenditures are justified. The economy of scale, in the long-term perspective, is likely to make up for the losses.

Investing $1,000,000 through stocks

Amazon

Investment in common stocks worth $ 400,000

The majority of the stock market is made up of common stocks. Preferred stocks, on the other hand, have no voting rights and are the polar opposite of common stock. Typical stocks provide a dividend and give voting rights to long-term investors, but they do not use those rights in most cases (Vinodkumar & Khalid AlJasser, 2020).

Walt Disney’s investment in ETFs (Exchange Traded Fund) worth $300,000

Bonds, commodities, indexes, and assets are all tracked by exchange-traded funds or ETFs. They are traded on stock markets in the same way as common stocks. ETFs with a higher trading volume and cheaper fees than mutual funds have higher and lower prices (Vinodkumar & Khalid AlJasser, 2020).

Companies to invest

Blue Chip Stocks Investment of $100,000

Mutual funds investment in intuitive surgical company-worthy $ 100,000

The reason for investing is that mutual funds are an excellent method to start building an investment portfolio. Mutual funds are both affordable and greatly diversify the risk for investors

Investment of ETN’S (Exchange Traded Notes) in Barclays bank worthy $ 100000

ETNs, or exchange-traded notes, are a sort of debt asset that Barclays Bank first introduced. They work similarly to exchange-traded funds in that they are traded on major stock exchanges. Stock ETNs such as TVIX and VIX are only two examples(Vinodkumar & Khalid AlJasser, 2020)

Blue chip stock Investment of $ 100000 in Google company

Blue-chip stocks include Apple, Google, Intel, Netflix, and Bank of America, to name a few. Once invested, they help to grow the account of the investor. Dividends compensate for the fact that the price of the stock has not increased considerably.

Amazon Profile, History, and What They Produce

Jeff Bezos created Amazon.com to sell books over the Internet. The website was launched in 1995 and immediately rose to the top of the Internet book-related sites. Amazon aims to provide the World with the Largest Selection and be the Most Customer-Centered Company, allowing customers to find and discover everything they wish to buy online. Amazon is an e-commerce platform, which connects buyers, merchants, and content creators. It sells items and material that has been purchased for resale from vendors as well as third-party sellers. Filmmakers, singers, app developers, authors, and others can use the website of the company, which is already branded, to publish and sell their work (Jackson & Orebaugh,2018).

Amazon financial information

Amazon experienced a 72% increase in the operating cash flow, equivalent to $ 66.1 billion in 2019 compared to the previous ending of December 31. The cash flow increased by $31 billion, a good profit margin (Al-Marzooqi & Nobanee 2020).In addition, based on the analysis, the payments of the principal are less than the cash flow and other financial obligations, a growth of approximately $ 20.3 billion compared to the previous year when $16.2 billion were earned.

In the previous year, free cash flow less the capital financing, repayment of principal, and all other financing obligations climbed to $21.4 billion, which was initially $12.5 billion for December 31, 2019.

By the end of the financial year 2020, common shares had increased up to 518 million, including shares underlying stock-based awards, up from 512 million a year before.

Reasons for choosing Amazon include the fact that it is the largest online store that is doing well economically, which is proved by Amazon’s financial information provided.

References

Al-Marzooqi, M. B., & Nobanee, H. (2020). Financial analysis of Amazon. SSRN Electronic Journal. Web.

Vinodkumar, N., & Khalid AlJasser, H. (2020). Financial evaluation of tadawul all-share index(TASI) listed stocks using Capital Asset Pricing Model. Investment management and financial innovations, 17(2), 69–75. Web.

Table 1. Stock Portfolio

Market Watch (2013). Investing. Web.

For the given portfolio, the amount of $10K was used in order to invest into the stock and shares of the companies in question. It is noteworthy that, after the financial operations had been carried out, a sufficient amount of money was left for making further financial decisions. Among the other solutions that have been considered as an option for the given portfolio, the concept of diversification was chosen to be utilized.

The choice of the companies to invest in predetermined the necessity in the use of diversification. As one might have noticed, the companies listed above belong to completely different fields. With Sirius XM is widely known as a broadcasting company, Amazon is famous for its being a multinational e-commerce firm, FEDEX offers courier services, Sprint Corp. is an Internet carrier, and USAA deals with banking, it is extremely hard to handle the shares bought from each of the companies with equal competence. Therefore, an efficient system of diversification had to be adopted in order to make sure that the shares are going to remain profitable.

The means of diversification that have been used in the portfolio can be described as a vertical one. Indeed, when considering the companies in question, one is likely to find out quickly that they belong to different spheres of services. The choice of the diversification strategy was predetermined by the lower risk rates. Indeed, when buying the shares from the companies that facilitate the same sphere of services, one is likely to turn bankrupt once people start losing their interest in what the specified sphere has to offer. Consequently, the companies that are related to completely different branches of business have been chosen.

It is reasonable to stress, however, that the choice of the spheres that the companies belong to was deliberate and was based on the current trends within the business sphere, as well as the news regarding the recent technological innovations and the way in which the latter is going to reinvent society. Since modern society can be referred to as the information society, the effects of media on the business sphere must not be underrated; therefore, it was crucial that the shares of such a major broadcasting company as Sirius XM should be bought. The reputation of Amazon, as well as its customer base, has grown considerably over the past few years due to the surge in popularity of e-commerce, which will also open new opportunities for Amazon investors. The same reasoning can be applied to Sprint Corp. and FEDEX. Even though banking is much riskier than any of the above-mentioned spheres, the shares of USAA also seem rather promising, given its impressive beta of 0.55.

With regard to the aforementioned considerations, one can safely assume that the data, which the given portfolio incorporates, will lead the owner of the stocks and shares of the companies in question to a triumph. Even though a slight uncertainty in the field of banking can be expected, investing in the shares from the companies mentioned above is likely to bring considerable revenues in the nearest future.

Reference List

Market Watch (2013). Investing. Web.

Amazon is an online company that provides buyers and sellers with a platform to buy and sell products. It is the largest online retailer. The main problem Amazon was dealing with is that it was generating large revenues but its profit margin was very small. In addition, the growth of the number of e-tailers competing with Amazon threatened the company’s long-term profitability. In addition to these, Amazons global expansion was approaching the limits, hence its programs to encourage e-tailers to buy and sell via Amazon (Behr).

Amazon chose to use Linux as its operating platform to reduce IT costs (Behr). By cutting back on costs, Amazon could raise its profit margin. After the implementation of Linux as the operating platform, Amazon saved twenty percent of its IT costs. Linux is an open source software that does not attract licensing fees. This means that Amazon saved all the money it previously spent on software licensing.

Amazon relies on an internet platform to conduct all its businesses. This means the Amazon store exists on servers. In order run this store, users log in to the Amazon website and access its virtual store. Linux supports several Amazon value chain activities, which include operations, marketing and sales, and services.

Amazon operations include all administrative activities in Amazon. The marketing and sales functions refer to the advertising Amazon does, and all online efforts it makes to find new clients. Services refer to the actual activities relating to the buying and selling of products on the Amazon website.

The main factors that influenced the switch to Linux by Amazon were to cut costs and to enjoy greater control over the expansion of Amazon’s systems. After implementing the Linux operating system, Amazon saved twenty percent of its software costs. This came from savings made from licensing fees. In addition, as an open source software, Linux allows users to expand it in any way that improves its functionality. This capacity to adapt the operating system to meet unique needs also made it attractive for Amazon.

The first issue Amazon needed to consider before switching to the Linux operating system was the cost of acquiring the new software. Since Linux is an open source software, this cost was minimal. Secondly, Amazon needed to consider the cost of running the software. Linux depends on a dedicated community of developers therefore there was no direct cost on Amazon.

Thirdly, Amazon considered the capacity to operate the software and the technical support it would need. On the technical side, Amazon considered its plans for future expansion, and the compatibility of the Linux operating system with its existing system.

Amazon experienced a cost saving in its IT costs because of switching to an open source platform. It saved the money it initially spent on acquiring software licenses from commercial vendors (Behr). Secondly, it ability to exert greater control over the development of its software platform grew because of the freedom to expand and adjust the operating system when needed.

The main conclusions from this study are that it is possible to change the financial performance of a company by using available resources. It is risky, but it is also rewarding. Secondly, acquiring the new platform freed Amazon to concentrate on optimizing its business model by finding more retailers willing to use Amazon. This will serve to increase the company’s revenue.

Works Cited

Behr, Mary E. “Case Study: Amazon.com.” CIO Insights. 11 Jan. 2003. Web. <https://www.cioinsight.com/c/a/Past-News/Case-Study-Amazoncom>

Introduction

As the world becomes a global village, information sharing is efficient and very cost effective. At present, just by a click of a button in search engine, information becomes available. Electronic commerce encompasses simultaneous transfer of relevant information online.

This information exists in the form of business opportunities for auction, retail, wholesale, and corporation trade. At present, seventy percent of medium business across the globe has access to internet. Besides, eighty percent of the American population are computer literate and have access to internet (Malhotra and Agarwal, 337).

Therefore, E-commerce has become a necessity since it permits clients to exchange goods electronically with zero burrier of distance or time. Over the last half of previous decade, E-commerce has experienced rapid expansion and the same is predicted to positively accelerate further in future.

In modern business environment, technology has necessitated the need for optimal performance through reducing overhead costs and maximizing profit in the process (Liebermann & Stashevsky, 294). As a matter of fact, E-commerce is the most cost effective and efficient means of transacting business irrespective of size of company.

Therefore, prospects of E-commerce are promising in all sectors of business environment inspired by the need for efficient transaction at minimal cost in time and resources. Our choice of E-commerce is as a result of the above factors which are positively skewed towards attaining extensive market from a central location: a website.

Besides, information and application of E-commerce is readily available in Amazon where best practices of the same are recorded. Thus, the key conceptual aspect of this analytical treatise is an in-depth reflection on E-commerce especially on its relevance, history, costing, and practice. Besides, the paper analyses best practices of E-commerce in Amazon.

History of E-commerce

Factually, online shopping is currently one of the most popular and efficient way of comparative shopping of series of items in the market. History of E-commerce is not as short as many people perceive it to be. Actually, the underlying technology in E-commerce has survived four decades.

At the beginning of its usage, E-commerce meant transaction electronically by use of Electronic Funds Transfer (EFT) and Electronic Data Exchange (EDI) in the early 70s (Ira, 46). During this period, the process was limited to electronic invoices and purchase orders (Bill, 01).

The first real E-commerce appeared in 1982 in what was called Boston Computer Exchange permitting credit cards proliferation, telephone banking, and ATM machines. In 1992, Enterprise Resource Planning (ERP) was added to the tag and enabled data mining and data warehousing.

Bill (2009) states that:

It wasn’t until 1994 that e-commerce (as we know it today) really began to accelerate with the introduction of security protocols and high speed internet connections such as DSL, allowing for much faster connection speeds and faster online transaction capability (01).

However, full adaptation of E-commerce begun in 2000 in America and Europe by pioneer companies such as Amazon and eBay which became prominent in E-commerce for many brands of products.

Purpose and Security of E-commerce

Before engaging in a business activity, it is vital to access its merits and demerits, risks involved security of the transaction, and regulative organs that directly provide protection from unpredictable and unethical practices by competitors. Therefore, this part reviews the advantages, disadvantages, risks, security, and regulative agency in E-commerce.

Advantages of E-commerce

In E-commerce, by a click on the mouse, a potential customer is in a position to access exact product and make comparison on prices without having to appear physically in shops and stalls. Besides, E-commerce is non discriminative on the size of business since even retail chains are in a position to trade online. Moreover, this model of business operation functions exclusively online.

In addition, web tracking technology permits sites that practicing E-commerce to monitor customer satisfaction and preference. These aspects allow such companies re-model to customize service delivery and maintain quality. At technological advancement improves, E-commerce is likely to widen further. Consequently, it is will be cheaper and easy to operate and open online stores “without a brick –and-mortar presence” (Bill, 01).

In addition, E-commerce offers entrepreneurial opportunities to persons in all business fields. The recorded sales data estimate progress at 4% annual across the globe (Baskerville, 27).

Disadvantages of E-commerce

The main disadvantage of E-commerce is the fears and doubts by potential customers who don’t how it works. In this case, the potential customers are afraid of purchasing products online because of doubt on reliability, practicality, and risks involved especially when delivery is done to a wrong party.

Some of these customers may be curious on appearance and reality and may develop a negative attitude after an assumption of possible fraud (Ira, 24). Besides, online stores do not give an option for wear, touch, trial of the product before purchasing. Therefore, sale of products such as furniture might be challenging.

Moreover, invasion of malwares and malicious codes in online stores might turn simple business transaction into ‘hellgate’ transmitting virus to PC of potential clients (Ira, 29). In addition online trading limits the social aspect of shopping in which parties involve interact physically with one another.

Risk and Security Issues in E-commerce

Due to surge in use of E-commerce, several security reasons have cropped up especially in safety of information exchanged. Occurrence of some security threats has compromised the principles of authentication, privacy, and non-repudiation which are fundamental in protecting security breaches such as Denial of Service (DoS) (Lee & Turban, 78-82).

The most common threats in E-commerce include ICM Flood, Teardrop Attack, Plashing, Distributed Denial-of-Service Attacks, and Brute Force Attacks. These practices aim at compromising integrity of E-commerce.

Recent Achievements in E-commerce Industry

The most recent achievements in E-commerce industry include the remodeling of Google which has completely transformed search engines and modification of online stores. Besides, broadband penetration across the globe has succeeded in making available fast internet connection to clients (Maness and Zietlow, 28).

Through this, many businesses have slowly but steadily embraced technology of online business. Through the Wi-Fi, User-generated content, and iTunes online business has grown to intercontinental exchange of products and services in the tourism, manufacturing, and product industries.

New Technology and Application

Introduction of the Wi-Fi, iTunes, Blackberry applications, and Amazon search engines have made online trade simple and reliable. For instance, the Wi-Fi and blackberry application permits potential client and seller to video conference and strike a deal irrespective of distance between these parties.

Besides, potential clients are now in a position to bargain, view, and make modifications to their product before making payment (Maness and Zietlow, 45). In addition, these gadgets are portable and have widened access to products online without necessarily being connected to the traditional wire internet which was slow.

Similar Problems Companies in Online trade have faced

Just like in EBay, Amazon is often faced with security threat by hackers whose main intention is to manipulate the security system for their gain.

Besides, expansion is often met by a mixture of acceptance and rejection since some clients, especially those in third world countries, is of the opinion that their charges are exorbitant and are limited to those in possession of MasterCard (Ira, 58). In addition, human era has led to goods and services delivered to wrong address and tracing the same is expensive and time consuming.

Works Cited

Baskerville, Richard. International e-business marketing. Alabama: Cengage Learning EMEA, 2004. Print.

Bill, Horace. “History of E-commerce.” Your Expert Guide to E-Commerce, Online Retailing & Internet Marketing. Sell It! On the Web., 18 Aug. 2009. Web.16 March 2012.

Ira, Kalb. E-Marketing: What Went Wrong and How to Do It Right. Los Angeles: K&A Press, 2002. Print.

Lee, Kim, & Turban Emile. “A Trust Model for Consumer Internet Shopping” International Journal of Electronic Commerce 6.1 (2001): 75-91. Print.

Liebermann, Young, & Stashevsky Sinl. “Perceived Risks as Barriers to Internet and E- commerce Usage.” Qualitative Market Research 5.4 (2002): 291-300. Print.

Malhotra, Kim, and Agarwal John. “Internet Users’ Information Privacy Concerns (IUIPC): The Construct, the Scale, and a Causal Model.” Information Systems Research 15.4(2004): 336-355. Print.

Maness, Terry, and Zietlow John. Short-term financial management. 3^rd. ed. New York: Thomson Learning, 2005. Print.

Amazon is a US based e-commerce company and America’s leading merchant in electronic business (Wood, 2011). The business was founded by Jeffrey Bezes who was the company’s chairman, President and C.E.O. He named the company Amazon to associate it with the world’s largest river, River Amazon.

By naming it Amazon, Bezes had managed to achieve two objectives with one name. First, he had been able to associate the company with the greatness and command that is associated with River Amazon. Secondly, he used letter “A” as the first letter of the company’s name; thereby, making internet search for his company much faster than several other organizations.

Though the company was formed 1994 with its headquarters in Seattle, Washington, its website was launched a year after in 1995 (Byers, 2006). Amazon has centers in different countries, which falls among the exceptionality in its history and growth.

In fact in its diversity to reach a global audience, the company can be accessed in seven different languages namely; English, Chinese, French, Italian, Spanish, German and Japanese. Though all of these languages share a common business plan, they are accessible in different languages.

In 1997, three years after its formation, Amazon launched its first IPO. On the down side, this year was also a year that the company faced a key lawsuit that threatened its growth. The suit accused the company of making false claims of being the leading bookstore in the whole world.

However, Amazon managed to maintain its house in order and settled the case outside the court system and simultaneously maintained its slogan of being the world leader in book selling. Another downside that the company faced in its growth was the slow rate of growth since its initial launch of the IPO in 1997.

However, in 2008, the company managed to calm its unease investors through its acquisition by the Bank of America. One of the strong pillars in Amazon’s background is its ability to offer more internet searches for book titles than traditional bookstores could offer.

Over the years, Amazon has evolved from a stage of dealing with online bookselling and matured into the CDS and DVDs dealer. Later it grew into diversified e-commerce commerce that was not only limited to household equipments but also into a merchant in the field of offering paints and downloads. The organization engaged in other subsequent acquisition with the most recent being its acquisition in 2012 of kiva systems.

In addressing customers’ needs, Amazon has not been limited by geographical boundaries. Being an online business, Amazon targets a worldwide customer base and has gone to the extent of opening individual website for different countries and languages. On the base, there are physical centers that help keep in touch with customer needs that cannot be fulfilled in an online means such as customer feedback.

In terms of individual customers for its products, the organization’s initial customers were online book readers. The customers have diversified to include food products, which include both perishable and non-perishable.

This are delivered to the individual customers in the morning hours, at daytime or on the customer specified time. The organization fulfills the needs of the working class who have little time for shopping by offering these fresh products. Though the customers for fresh products were limited geographically, the services have expanded to various states other than Washington (Junnarkar, 1998).

In addition, Amazon has managed to clinch a share of the market of the film release industry. Entertainment in the modern society has become a key aspect of globalization.

The entertainment industry is growing massively across borders, and the needs of audiences continue to increase by the day. In 2008, Amazon ventured into film production through a partnership that enhanced its customers (Beckett, 1998).

Through the advancement in technology, Amazon has managed to grab and fulfill the needs of customers by offering data storage services. Hence, these services target customers with varying amount of data from 5MB with charges being made on a monthly basis.

The technological advancement has initiated the company’s diversification across different platforms such as web hosting services, messaging using queues that are distributed and a clinch of the online music industry mainly through offering downloads in MP3format.

Key customers for home appliances also constitute a key share of Amazon market. This initially started as kitchen utensils through Amazon trademark. After two years, the line expanded to industry goods such as paints (Rivlin, 2005).

While the company offers these services online, there is an option of delivery of most products in that the company has ventured into the shipping industry in order to fulfill the needs of the online customers better.

The strategy that companies strive to adopt becomes is a crucial determinant of its success. The success of Amazon is vested in its ability to utilize the internet, which puts it ahead of its competitions in a field faced by continuous growth and change.

There has been a strategic planning that enhances the company’s reach and access to its customers with every decision that is settled upon. In so doing, Amazon has strategically designed its website to display all of its products. Just after opening the website, the tabs easily lead customers to the key products.

As such, a single button and click of the tabs makes all its customers easily reachable. There is a tab dealing with books, a tab to lead customers into Accessories and Apparel, that of electronics, DVDs, online magazines and that of toys and games.

In addition, the company deals with goods, which are light and can be transported easily among its unique strategy in utilizing the internet. The company helps to ease the transportation and affordability of internet purchased goods and services by dealing with light products.

The online products become affordable to anyone anywhere. While Knowledge management helps a company to keep up with change and preserve its current resources, Amazon has played a significant role in knowledge management.

This has mainly occurred through software development centers that are mainly located in Seattle, and have its presence in several parts across the globe. These software development centers have kept Amazon ahead in dealing with change and innovation.

Knowledge management is also done through a service where consumers can trade their used books, CDs DVDs. The books offered by Amazon are a form of Knowledge management.

In utilizing ICT strategically, Amazon has enhanced its channels of communication among all of its affiliates. There is quick and fast feedback in Amazon’s website that enhances provision of services. The company uses Linux based technology in enhancing its output.

The EC metric strategy of the company has helped heavily in brand engagement and promoting interaction with customers. This strategy is realized through creativity dialogue and analysis through a forum where authors can make comments on book pages to their readers through the Amazon remark.

Also, as its EC metric strategy, customers are able to submit reviews to the web pages of each of the Amazon products. Physical call and fulfillment centers are available to promote customer relation management.

In its EC strategy, the company promotes vigorous commercial activities through its websites. Almost anybody from a customer-customer, to business to business, to business to customer level can sell almost anything through its website.

The company offers a commission for its products to people for posting a link of its website. In its commercial strategy, the company charges a smaller commission compared to its customers such as ebay (Oswald, 2008).

As an online company, security is a key concern for Amazon Company. In its EC security policy, Amazon uses Netscape’s secure Commerce Server through the secure socket film procedure to isolate people’s credit card information from the internet catalog.

This procedure prevents hackers from accessing sensitive credit card information of the users. Matters of copyright are core to the security system of any online company. Amazon highly bars copyright infringement by granting admission to a limited number of pages in a book and providing access to pictures.

Internet regulation has become a key issue of concern with the modern evolution of e-business. Governments are continuously enacting legislations that are continuously become a barrier in the industry and barring the freedom of E-commerce.

This legislation has severally barred the electronic marketing of e-commerce companies through regulations such as regulation promotion emails and regulated information. Many governments are continuously regulating e-commerce through censorship and control making the industry unpredictable and unreliable.

Competitive advantage refers to that aspect of being in command in a selected area or the provision of identified products. One of the competitive advantage technologies can offer Amazon Company is the ability to be easily accessible.

Through the internet, Amazon will gain access to search engines; hence, reach people regardless of their geographical location. Strategically, technology has an ability to convert more customers into consumers through the click-and-mortal instead of a brick-and-mortar button.

Technology has also an ability to offer competitive advantage in matters of security. When consumers are assured of their security, they can make online purchases in a comfortable manner than in systems that are prone to hackers.

IT has an ability to increase the competitive advantage of Amazon through increased output and reduction of costs through a system of networking. Automation software has an extraordinary ability in increasing the competitive advantage of the company.

While many companies continue to venture into e-commerce, the barriers to this industry cannot be ignored. At one hand, insecurity has become a prevalent issue with leakages of private information leading to massive damages of individuals and organizations.

People have little trust in online business, which poses a key challenge to the e-commerce business. In addition, many companies do not give the full cost of their products making consumers hesitant while making purchases due to the notion of hidden prices. As mentioned earlier, internet restrictions are also posing a key barrier to this industry.

In conclusion, Amazon Company has continued to thrive in the midst of competition due to the combination of business strategies. The company has proved to be fit enough to survive in times of change and evolution.

Though the company proves that the e-commerce business has an enormous potential, anyone one who ventures into this field must first choose to learn the tactics and the creativity of success.

References

Beckett, J. (1998). Amazon to Purchase. San Franscisco Gate: Cengange Learning.

Byers, A. (2006). The founder of Amazon.com. New York, NY: The Rosen publishing group.

Junnarkar, S. (1998). Amazon to buy two companies. CNET News. Web.

Oswald, D. (2008). Borders Returns to Online Saeles, Drops Amazon. International Business Times. Web.

Rivlin, G. (2005). A Retail Revolution. South Melbourne, Australia: Thomson Learning.

Wood, D.B. (2011). Amazon pushes California toward referendum on online sales tax. The Christian Science Monitor. Web.

Introduction

Amazon.com, Inc. is a company that offers variety of services to consumers all over the world. The Company has since developed in such a way that it offers its services to consumers through the retail websites that the Company owns. Amazon produces programs to the seller customers that enable them to easily use the Company’s Website and their own Websites to sell the products they produce.

Through its Web services, Amazon caters for the need of the developer customers. This is by providing them with the recommended technology infrastructure that enables them to operate any type of business (Amazon.com, 2009).

Amazon operates in two known segments which are North America and International. Within these segments it offers co-branded credit card agreements, marketing and promotional services that enable the Company to generate revenue. The Company has acquired the rights to own various companies through purchasing.

For instance in the year 2008 it purchased Shelfari which is a social network for those who like books, It also acquired AbeBooks in the same year. Towards the end of 2009 the Company obtained the ownership of Zappos .com. Inc. (Amazon.com, 2009).

Portfolio of new business services

The building of a portfolio of services is often considered as the first logical step in the process of implementing a new business. The ideal framework for building a service portfolio must be set and followed to the latter (Aaker, 1998). Jeffrey Bezo of Amazon Company is very much concerned with the growth of the company.

This has made him to be more concerned on how to work closely with the relevant groups within the company including the business process owners, system architects and developers to bring success to the company (Hynes and Pradhan, 2008).

Identifying Services

In discovering the appropriate service there are techniques that are employed by business companies. In order to realize complete satisfaction of its customers, Amazon employed the process of “working backwards” which entailed identifying customer needs and working backward until they reach the minimum technology required to satisfy the identified customer need. This resulted into the company commanding a good base of loyal customers (Stanford University, 2008).

Amazon has found it necessary to invest in the research and development; this has seen the Company take advantage of the propriety technology it owns. The Company has used this technology to improve on the process efficiency and offer support to Web infrastructure services.

They’ve also gone as far as patenting “I-Click” that has enabled easy dealing with return businesses without repeating the entry of information within the system. There is also the development of the intelligence-based pricing system which works artificially (Stanford University, 2008). The invention of the SmugMug offers cheap storage service, offering cheap space on the disk drives for the benefit of businesses or programmers willing to store data.

Amazon Company has embarked on programs that will enable it to run the technical and logistical parts of retail businesses. In order to render this, the company has embarked on the technique whereby its renting out most of the things it uses to run its own businesses.

Amazon is also focusing to offer free-shipping that will be marketed in place of TV adverts and also buying more servers to run the new machines. There is also the idea of using the automated technique to run the business processes, this will involve the art of taking orders while at the same time processing the payment of the orders (Stanford University, 2008; Hof, 2006, p5).

Classification of Services

The classification of services is based on their usefulness and importance. The classification always allows for easy management and supervision of the requirements for different groups of services (Hynes and Pradhan, 2008). The company has so far embarked on buying the technologies and their contents.

They also consider hiring of specialists i.e. engineers and programmers to enable easy implementation of the services. The company has simple storage service i.e. disk drives, where it charges businesses for storage of data and programs. Amazon also has the idea of offering the outside software services and enabling Web site developers to gain access to the Company’s selected data (Hof, 2005, p4).

Determining service Granularity

Appropriate granularity ensures that the service rendered is easily put in use and managed appropriately (Hynes and Pradhan, 2008). The services provided by Amazon tend to satisfy customers to their expectations. This is because more flexibility to the client use will be applicable. However it has been discovered that the preferred service is the one that focuses in maximizing the value of the business, hence Amazon rents out its computing power at hourly rate to cater for this.

The storage service is being used by potential customers, i.e. Microsoft Corp. is using it to speed up software downloads, and the service is also very vital to Linden lab since it assists them in handling quick software downloads. In order to handle customers in all corners of the world, Amazon has provided customized handling, packing and customer service to people. This is in order to cater for the upscale retailers and manufacturers, this is been done by opening the small and midsize businesses (Hof, 2006, p5).

Service Implementation

For a service to be acquired and implemented, its placement and purpose must be well determined (Hynes and Pradhan, 2008). The company has got storage facilities, disk drives, where they charge customers for using them. They also charge storage in their warehouses. Amazon has set up a semi-automated global market place that serves the online piece work, which includes transcribing snippets of podcasts.

Logic and risk of new direction

Amazon faces some risks in its bid to lead the next wave of the Internet; it faces stiff competition from Google and Microsoft which is also fighting to be the Net’s king pins (Hof, 2006, p3). The other risk is that the Web developers continue to build new services on top of the Amazon technology, hence gaining advantage over Amazon’s core retail businesses.

The majority of the retail sales in the US and other parts of the world are still based in brick and mortar stores which pose a greater risk to Amazon’s competition in the market. The focus that Amazon Company has towards the purchases done online, offers the company a great opportunity to strategize in establishing itself on long-term sustainable growth (Amazon.com, 2009).

The cloud computing market has grown tremendously permitting a stiff competition in the already populated market. The entry of Amazon in the cloud computing market faces stiff competition from the already established industries like Microsoft, Google and IBM. Due to this Amazon has ideally placed its focus on customer satisfaction as well as innovation. They focused on the value that they could add to customers besides just incorporating any new technology.

The company has emerged as easily accessible offering variety selection of products at a lower price to customers (Stanford University, 2008, p3).However, the cloud computing has been classified by some analysts as a disruptive technology and this poses some risk to Amazon. The eBay company is one of the largest competitors to Amazon in the e-commerce sector; they compete against each other in the area of online auctions.

The retail businesses that Amazon runs, offered a round 16 million items that attracted over 615 million customers in the year 2007. In the online retail market, the company accounts for 6% of the $ 136 billion that is, within the U.S market. By the year 2008 Amazon’s branch in Seattle had employed over 17,000 all over the world. It had also established warehouses and software design centers in eight countries around the world (Stanford University, 2008).

Amazon has made variety of services and products apart from its main business that it offers to its customers. These include; Amazon Associates which is an affiliate marketing program, Amazon Auctions, Amazon Marketplace which allows vendors to sell new and used goods, Pinzon a private label that deals with textiles and household goods, digital content offerings and Web store, and most recently the Social Networks (Stanford University, 2008).

Amazon plans to incorporate a corporate culture that is friendly and comprises of people from different backgrounds. These people who will be employees for the company must share in the vision of the company by desiring to move profitably. The company plans to offer more products at competitive prices with diverse distribution network to cover big market segment as opposed to internet retail websites which cater for smaller market segment (Stanford University, 2008, p7).

Technology and logistics to start-ups –How attractive?

Like in the case of Amazon, the e-retailer services present them with the opportunity to apply the effectiveness of the Net; this is through the provision of both tangible and corporeal assets. These assets include the products and the people. This technology enables easy product distribution and automatically enables the transacting of orders together with their payment (Hof, 2006, p4).

The Mechanical Turk has made it easy to gather people for tiny tasks, hence it has attracted so many customers from different companies and this provides an attractive market for Amazon. It has been used by companies to analyze great amount of search keywords that they use to attract potential shoppers to specific Web sites (Hof, 2006, p5)

If the technology offered can consistently meet the quality, cost and delivery expectations of customers it is considered to have the ability to contribute to the revenue growth. In the recent past the business environment has dramatically changed to the extent that these conditions are no longer considered sufficient for success. The internal and the external constraints are accounted for before the technology is sent into the market place (Cravens & Piercy, 2000; Miller, 2009).

Innovation process- describes and evaluate

The key factors that Amazon considers for improvement of the Company are lowering of the prices, offering convenience to customers, expansion of the services selected as well as improving their availability (Dwyer & Tanner, 2001). These factors have made the core foundation that has made the company to realize fabulous growth. This has seen the company to realize a growth of $ 14B in the retail machine.

The direct link to customers that Amazon enjoys through the online model, has enabled the Company to maintain and contain its inventory in the few available warehouses that are strategically located. This has enabled the company to offer variety of goods without relying on any one product line. This has eliminated the inventory risk that is always experienced with the brick and mortar retailers (Miller, 2009).

Amazon is using the storage service to speed up software downloads. The innovation process used by Amazon has provided an advantage to the retail operations. This is because it has enabled Amazon to use only 10% of its capacity at one operation giving room for occasional spikes. The innovation process has also seen the distribution centers operating more efficiently and at the same time providing the customers with variety of products (Hof, 2006, p4-6).

The invention of the automated business process has enabled efficiency and ultimately prevented the issue of overstaffing (Hof, 2006, p4). The modernization of the Amazon’s massive data collection centers and their software has made it easier for the incorporation of new Web site features. The employees, working in small groups, have hence found it easier to incorporate new ideas such as customer discussion boards, software to play music and videos on the various sites.

The innovation of the Scan buy service by Amazon has made it easy for customers to make comparisons of prices through their cell phones. This enables the consumers to check whether the Company offers better prices than retail stores. The invention of the Mechanical Turk on the other hand has enabled consumers to easily sort out photos through the Web site at an affordable cost (Hof, 2006, p4; Amazon.com, 2009).

Financial evaluation

Amazon recorded an over- reliance on electronic sales, continued promotions and shipping discounts. This resulted into the decrease in the realized profits during the year 2006. The total revenue for 2006 was $ 10,711 slightly higher than 2005 which was $ 8,490. The new markets that the company invested into were characterized by thin-margin businesses.

Also Amazon’s willingness to offer discounted shipping for customers has to some extent affected its sustainable growth in profits. The operating profit has been low for quite some years including 2006. The promotions were the major boosters to sales during that year (Keith Regan, 2007).

The company recorded sales growth from the previous year; the growth has been evident between the years 1998 and 2007. The sales have grown from $ 609 million to almost $ 15 billion. The profit margins have however recorded a five year average of 3.5% which is consistently lower than the sector average of 7.3% (Stanford University, 2008). The Online retail revenues grew substantially to $ 130.3 billion in 2006 as compared to $ 104.4 billion in the previous year (Jupiter Internet Shopping Model, 2008).

Cash Flow Statement

Conclusion

The utilization of the internet by Amazon has produced tremendous results in the global business platform. The company has focused on the profitable business ventures which have enabled it to expand gradually beyond the normal business platform.

Formally it was known as the internet superstore selling variety of products from books to electronics, groceries, jewellery and auto parts. This has since been expanded and encompasses the e-commerce and internet technology, fulfillment and logistics, search technology, internet advertising and internet startup incubator of sorts.

References

Aaker, D. (1998). Strategic market Management. 5^th edition. New York: Amazon.com. (2009). Amazon the Global Superstore. Web.

Cravens, D. and Piercy, N. (2000). Strategic Marketing. McGraw-Hill-Irwin (9th Ed). Boston.

Dwyer, F. and Tanner, J. (2001). Business marketing: connecting strategy, Relationship and learning. 2^nd edition. New York: McGraw-Hill.

Hof, D. R. (2006). Jeff Bezo’s Risky Bet. Business Week, November 13, 2006.

Hynes, D. and Pradhan, S. (2008). Building a Portfolio of services. Web.

Jupiter Internet Shopping Model. (2008). US online Retail Sales Revenues 1999-2006. Web.

Keith, R. (2007). E-Commerce Times. Web.

Miller, R. (2009). Outage for Amazon Web services. Web.

Stanford University, (2008). Amazon Enters The Cloud Computing Business. Web.

Discuss the reasons for Amazon’s evolution of supply chain and distribution systems in the US. Use diagram or otherwise to illustrate and discuss Amazon’s current distribution network in the US. It would be useful if you can extend the discussions to two-tier network distribution where possible

Amazon succeeded due to the benefits derived from simplicity and speed in the US market. These two benefits are instrumental towards the consumer base of its products. Amazon emerged as a very successful bookstore across the globe within a very short time. One of the factors that boosted the company’s supply chain in the United States was the low level of inventories.

In addition, the task of carrying out supply and stock books were left under the care and request of wholesalers. As a result, publishers were also linked closely with the company. The latter were awarded higher discounts than the wholesalers although their efficiency seemed to be rather low.

Moreover, it took a relatively short time to make order fulfillment for customers. The time taken for this procedure was less than one week in most cases. The company also expanded the capacity of its distribution centers in order to facilitate prompt movement of stock from one region to another. The stock of the company in terms of the number of title also grew steadily within the first three years. Moreover, the logistics department of Amazon also grew rapidly due to additional investments.

As already mentioned, the time taken to effect deliveries was significantly reduced due to the expansion that had taken place. However, the fast pace of competition in the online book selling stores prompted Amazon to devise better growth strategies that were in tandem with the market needs. Hence, more distribution centers were established in order to improve the physical infrastructure of the company. On the same note, supplier agreements of the same nature were initiated in order to boost the product range.

The desire to optimize the operations of its networks was yet another important area of focus for Amazon. In any case, both the shipping and stocking activities experienced cost reductions within three years after the above initiatives were adopted. Moreover, there was marked improvement in the delivery of quality services to customers.

The current distribution network of Amazon in the US makes use of distribution fulfillment space. It has been expanded by forty percent to a total of 53 centers. Other six distribution facilities that were added recently have improved efficiency of delivery. Besides, it has improved the market presence of Amazon due to large fulfillment centers as shown in the diagram.

Q # 2: What is Amazon’s inventory management policy? Do you think that this is the best policy? Give two other inventory management strategies Amazon could use as part of its inventory management policy.

The inventory management policy focuses more on the best method that customers can use to manage their orders. For instance, the company uses refined software that can be used to offer forecasts for demand in the market so that it can meet the expected needs of consumers. This policy is necessary in order to avoid excess supply that may not be bought within the anticipated time.

The allocation of certain amounts to direct vendors and wholesalers has also been established as a buying rule.

The supply management systems have been integrated in such way a way that the systems that handle importation, warehousing and inventory programs are separate, but work as a unit.

The best price from suppliers is also an important policy consideration for Amazon. Therefore, it has executed cascading rules of buying. These rules enable the company to determine the best options that can be adopted to fetch the best price and delivery options for suppliers.

Although the above inventory management policies have been used successfully for a long time, there are other management systems that the company can still adopt in its online marketing business. For instance, Amazon can opt to use a barcode system in managing its inventory.

This system of inventory management system has been proved to be effective due to its high level of accuracy. It has a computerized cash register located at the point of sale. The data obtained from the inventory sales are transferred immediately in the system and later used in the maintenance of user statistics.

The data obtained from the system can then be used to make investment decisions. It is imperative to note that warehouses can also adopt the use of barcode inventory system. The entire incoming inventory can be controlled using a radio frequency identification (RFID) signal installed in the barcode. The flow of inventory within a warehouse is also by a barcode system.

Q # 3: Identify and discuss some of the supply chain management issues Amazon faced in its European markets. What were some of the potential risks faced in its European market supply chain, and how were they mitigating the risks?

There were myriads of challenges that were faced in Europe before the close of 2003. For instance, the desire to reorganize its distribution network was a real cause of concern bearing in mind that the growing demand for its products needed an urgent action to be taken. The management at Amazon saw the significance of embracing business structure and market positioning. There was still a lot of space for improving the supply chain management although the latter had been optimized in most parts of Europe.

The operations of Amazon in Europe were still lagging behind by 2003. In other words, the volume of sales in Europe was far much below the similar operations in the United States. Hence, the product offering was to be expanded and realizing better marketing activities as it was the case with the United States.

However, it was a difficult task to assess the degree of centralization required in adopting new services. For example, it would not be easy to group tasks that were being done separately. Putting these tasks together would require thorough planning. As a result, the operations of the supply chain management in Europe could not easily merge market sufficiency and flexibility within the required time.

Moreover, there was prevailing challenge in the European market in terms of the system of product offering, stocking technicalities in order to attain effective submission to customers and also the methods to use in improving the relationship with suppliers.

Finally, it was also challenging the degree of centralization or de-centralization to adopt. These risks were mitigated by employing strategies used in the US market. However, slight modifications were carried out on the strategies used in the US so that they could be compatible with the case in Europe.

Q # 4: Briefly discuss what are PRM and CRM. Discuss how Amazon used EDI to successful implement its PRM and CRM.

Customer Relationship Management (CRM) in an organization serves the purpose of assisting in the process of controlling and planning activities that deal with the both the post sale and presale tasks. CRM aims at improving the overall relationship between customers and an organization. Some of the important components of a CRM include field service, technical support, marketing; sales force and call center activities. Hence, CRM assists in understanding the behavior and needs of customers.

On the other hand, Amazon has used the Professional Risk Management (PRM) to validate its skills portfolio in managing its risks in the operations of the supply chain management. In other words, the company uses PRM to assess the risk factor in terms of supply and demand of its products. In addition, PRM is instrumental in assessing price levels in the market so that the company does not run at a loss.

Q # 5: What is a push strategy? What is a pull strategy? How would you characterize Amazon’s US and global supply chain strategy? What were the key drivers for Amazon to select the appropriate supply chain strategy in the US, and for the global market?

When products move from one party to another, it is called a push strategy. This term is sometimes linked with the pull strategy to denote exchange of goods between two parties.

Both of them can either receive or send goods to the other party. It is common knowledge for consumers to pull products toward themselves in order to satisfy their needs. On the other hand, pushing of goods and services to the end users by supplies for the sake of optimizing production and volume of sales usually takes place. Hence, the net effect generated is known as the push-pull strategy.

The global and the US supply chain strategy for Amazon indeed follow the push-pull strategy in spite of slight modification. For instance, there are suppliers on one side who push the products to Amazon. In this case, they do not sell directly to customers in the market. After coding and pricing of these products, selling process to consumers takes place.

The company can as well deploy an effective logistics system that can cater for speedy delivery of sold products across the globe. Besides, concurrent engineering can be integrated with supply chain design in order to boost performance.

Q # 6: Identify and discuss the facilitators in the Amazon’s supply chain. Explain how Amazon can apply cross docking strategy with the delivery of its product to its warehouse, or directly to its customers.

The Amazon’s supply chain has several facilitators. Although it has a competitive pricing strategy compared to its market rivals, its facilitators in the supply chain have indeed led to massive growth and profitable of the company. For instance, Eddie Bauer is a retailer who is critical in the supply chain of Amazon because Amazon takes care of its inventory.

In addition, the company also liaises with shipping companies for logistics purposes. Amazon uses drop shipping with certain assigned shipping companies. There are also wholesalers who are key suppliers to Amazon stores. Moreover, Amazon also cooperates with direct manufacturers who sell new products at the huge discount prices.

When goods from a different location are offloaded and immediately loaded into transport vessels without facilitating any system of storage, it is known as cross-docking. Hence, no storage arrangements are organized whenever cross docking is carried out. Hence, Amazon can opt to deliver goods directly to customers without storage in warehouses. This will significantly reduce delivery time and storage costs.

Introduction

The 2 ecommerce platforms chosen for analysis are Amazon and e-Bay. I selected these two platforms because I was most familiar with them and had made online purchases before.

Amazon

I first purchased a motivational book from amazon.com then went ahead to buy a DVD. I decided to return the DVD and first visited the returns centre in order to ensure that I was doing the right thing. I was surprised that it was quite easy to return an item as long as it is open. I was lucky enough not to have opened my package. In the Return center, the company had laid out a pictorial representation of the returning process.

First, a customer needs to go to this returns center and print the label which would be attached on the package; I printed my return label. The second step was to prepare a package in which to place the item and the third step was to seal the box and attach the return label at the top of the package.

The last step was to ship the package through my local courier. When I took the package to DHS, they told me that I needed to pay shipping fees and I realized that there would be a number of other hidden payments in this process. So I went back to the company website under “Amazon Help” to find out all the charges involved.

I found out that since mine was a media item and it had not been opened, I would get a refund of 80% of my purchasing price. However, because I was returning something out of my own liking rather than a mistake made by Amazon, then I needed to pay for the shipping. I also found out that the reason why I was not getting a full refund was that there was a restocking fee which would be deducted from my desired item.

I had returned my package after a period of two days so this was well within the 30 day limit that the company places on returned items. I received my refund through the same method that I had used to pay for the service and this was through my credit card. It came after three days.

All in all, I felt that their return policy was quite fair; it was reasonable for me to pay shipping charges since they had not committed any wrong. Furthermore, refunds came in on time and I liked the fact that they only deducted 20% out of the original purchase price. This was quite fair because all goods lose value as soon as they leave a business’s premises.

The reason why Amazon is doing so well in this highly competitive world of ecommerce is their customer focus. The company has created forums for conducting web reviews in which customers rate items and give their comments about the items. In fact, I bought the self help book and DVD only after looking through customer reviews to find out if it would be worth my while.

Additionally, the website has provided a content search platform in which one can analyze book content. I was therefore able to buy my book only after ascertaining that it contained only the material I was looking for. Amazon also impressed me with the bonuses they give on credit cards and shipping and it was great that the book cost much less here than it did in some other book stores.

I was impressed by their click ordering because I did not have to follow such a long process in order to get my product and I received it on time. The company has such a large inventory of items and it is almost impossible to miss one’s favorite book or item.

For an ecommerce website to do well it must have an air tight marketing strategy. I saw an advertisement for this motivational book on another website I was visiting. In fact, Amazon ads can be found in almost all types of websites so it is quite easy to get external information about the service.

The website is user friendly because payment options and terms of use are clearly written. I thought their customer service was top notch and this was even increased by the fact that I could track my product movement. The company has a ‘contact us’ link on almost all sections of their websites. I did not wait long before someone could attend to me. In fact, it is the personal service that illustrated how professional the company was.

EBay

My purchases from E-bay were for a commemorative coin and a watch. I decided to return the coin and found that their return policy was quite different. Since this is a flea market, all sellers had their own return policies. I went back to my seller and read his return policy. He had stated that customers must return items within 7 days of purchase, but this was not inclusive of shipping time.

He specified that a refund would only be possible after the good had arrived back to the seller and that Return of merchandise authorization was needed. I therefore contacted the seller and told him that I changed my mind about the product and wished to return it to him. The customer was expected to pay for shipping and he asserted that this would be done through PayPal.

After contacting him for authorization, he first told me that I had already exceeded the 7 day limit so I should not expect a refund but I requested him to be lenient with me since I was going to buy more collectables from him in the future. He told me that he could give me credit for future purchases that was equivalent to 50% of the coin’s value- I received a gift certificate.

I negotiated with him and he agreed to increase it to 70%. I also had to pay for shipping. I am yet to buy more items from him so that I can investigate whether he will stick to his assertion or not. I thought this return policy was more stringent because the duration was only 7 days.

I also felt that he should be willing to send refunds since the items are not breakable or easily spoilt like electronics. There is room for improvement here even though the concerned collectables seller tried to accommodate me as much as possible.

I was impressed by the company’s web design; Products were categorized so that it would be easier to find what I was looking for. I also found that prices, photos and descriptions of the items were well done such that vital information could be found at a glance.

However, sometimes the descriptions can be different from the actual commodity since these are mostly second hand commodities. I found that the customer service was not as powerful as it was at Amazon because most of the work is left to independent sellers in the eBay village. In fact, I got most of my information from blogs and external parties when trying to find out about return policies.

This site is unique in that I could access so many commodities and so many sellers at one place. Everything from clothes, to phones, furniture, electronics and many more were available from this particular online shop. So the convenience was definitely something worthwhile.

I could imagine that many other customers from around the world were buying and bidding just like I was at EBay yet I could carry out my transactions very quickly. The company must have very effective servers to monitor these transactions.

However, I did not like the fact that most items needed to be bided on. It wastes a lot of time because the seller must decide which price is most convenient. Although there were items that had fixed prices, these represented the smaller percentage.

Conclusion

Generally, Amazon appeared to be more user friendly because it is owned and run by a single firm. On the other hand, EBay is operated by a series of sellers from around the world; they all have their different offerings, conditions and expectations so synchronization is a challenge here. Both websites have great variety and conduct transactions quickly.

Introduction

From its launch in 1995, Amazon has grown to become the main choice for online shoppers across the world based on its array of quality products. Amazon Company’s success has been impressive, thanks to the company’s efforts to address its core competencies.

Using VRIO analysis, this paper discusses research and development, organization culture, customer relations, incumbent advantages, and branding as Amazon Company’s key competencies.

Amazon’s Core Competencies

The Research and Development (R&D) has initiated and executed ideas such as Listmania and Kindle, which have proved valuable to the company. These ideas have attracted many consumers since they allow them to choose the products they find most valuable.

Nonetheless, these ideas are not rare since Amazon’s competitors have parallel technologies. For instance, the Noble Company has a feature that enables clients to share opinions on products they have searched or bought.

These products are expensive to imitate because of the corresponding technological dexterity and high costs to develop features such as Kindle. Moreover, these features are appropriate for the success of the organization since the efforts by the R&D department are met to enhance consumer shopping experience (Mennen 45).

As Hill and Gareth confirm, Amazon has established an organizational culture whereby ideals such as prudence and leadership are given top priority (56).

This organizational norm is dear to the firm since it keeps it at the forefront of other companies in the industry in terms of efficient exploitation of resources and the introduction of changes in the company. However, this culture is not rare since most organizations encourage frugality and good leadership.

Moreover, it is not difficult to imitate it since its implementation is inexpensive and publicly available in Amazon’s website. This organization culture that promotes prudence and leadership is relevant for the organization since it attracts and retains customers. It improves consumer experience, thus granting the company advantage over its competitors (Amazon 12).

Harris says that the company recognizes that maintaining good customer relations is crucial to its prosperity (10). The company finds it valuable to allow shoppers to review the products to attract other potential customers. However, this strategy is not rare since most companies have similar tendencies of allowing their customers to share opinions on their (companies) products.

Furthermore, this idea is not technical to imitate since firms should only comprehend the anticipations of their clients and strive to satisfy them. Maintaining a good rapport with customers is appropriate for the organization, as it helps to control the online commercial market (Mennen 67).

Amazon joined the online shopping business at time when there were few online users or online shopping firms. Being the first in the industry has been of great value, as it has enjoyed several incumbent advantages such as the economies of scale of the business.

This opportunity is a rare since there can only be one first-enterer. Additionally, it is hard to mimic incumbent companies in other industries that strive to offer similar services because of competition. The benefits of the first entry are appropriate for the organization they limit the chances of rivals surpassing the Amazon in the industry (Harris 10).

The brand of the company, which is associated with one of the greatest rivers, is of utmost value to the company since it has linked it to greatness by attracting many online shoppers.

Its branding is rare since most clients only connect the name to the company. Moreover, it is also not a viable duplicate the brand. Using Amazon as the company’s name makes the organization well known and hence successful.

Conclusion

In the past two decades, Amazon has consistently grown to become the first choice for online shoppers. It has been attentive to customers’ needs following its provision of a platform that allows them to review their products, thus maintaining a good rapport with shoppers. If Amazon maintains these prudent strategies, it will continue to control the online shopping industry.

Works Cited

Amazon. 2013 Annual Report, 2013. Web.

Harris, Jim. “Amazon’s runaway success.” Backbone 1.1(2012): 10. Print.

Hill, Charles, and Jones Gareth. Essentials of Strategic Management. Ohio, OH: Cengage, 2011. Print.

Mennen, Miriam. Global Corporate Strategy – A Critical Analysis and Evaluation of Amazon.com. Germany: GRIN Verlag, 2010. Print.