...Diversification in E- Commerce [pic] Diana Reyes – 27828 Introduction Economies of scope and synergies in business operations are consequences of diversification strategies. It is possible to classify companies according to the type of diversification strategy selected. Unrelated diversifiers are companies that diversify across industry, while related diversifiers are firms that diversify within the industry (Kim, Hwang and Burgers 1989). Companies pursuing related diversification over a period of time have achieved superior performance than companies following an unrelated diversification (Palepu 1985). Amazon has started its business by selling books and music, soon after it incorporated online auctions for airlines tickets and hotel rooms, computer hardware, pet food and pet accessories, electronic cards, toys and consumer electronics. Whereas Amazon has achieved very high volume of sales and gained important market shares in the book industry, the company has never been profitable. As a result, in this essay, in order to determine if Amazon’s decision to diversify so extensively was a wise decision, we will firstly describe the firm business model and the reasons for its success. We will then try to determine if this business model is applicable to Amazon’s diversification strategy as well as the limit of diversification. And finally we will try to evaluate the limit of such strategy in an international context. ...
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...revolutionary e-marketplace that is both world-renowned and extremely efficient. Amazon has gone from a small company run out of a garage, to a Fortune 100 company run all over the world. Amazon fulfills their mission statement every day by being a customer-centric company that offers over 200 million products at the lowest prices possible. Amazon is a very Background image of page 3 innovative company that creates and manufactures many products. They are always expanding and trying to create new ways to make their company and the lives of their customers better. Amazon’s biggest competition as an e-marketplace is eBay. Amazon currently leads this market by having a more organized, effective, professional, and easy to use website. Furthermore, Amazon’s brand personality is that they are a fast, friendly, innovative company that can be trusted. All of these traits make Amazon the website where most customers choose to do their shopping. Also, Amazon makes their customers their top priority and successfully appeals to their values, knowledge, and interests. Amazon’s two loyalty programs of Amazon Prime and Amazon Visa Rewards Card provide many benefits to their members and make shopping on their website quick and easy. Overall, Amazon has developed into one of the most important and successful companies in the world today. Background image of page 4 Porter’s Five Forces analysis In order to get a broader picture of the competitive structure of Amazon.com e-business the author...
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...My assessment of the long-term viability of Amazon’s business model it will become greatly successful as the big retailers. The idea of selling products at competitive prices is great. Everyone now is looking for a cheaper and a better alternative to save money. Another good thing is that it permits individuals or third parties to sell their products on the website. It will attract more people and give them opportunities to promote and sell their product. Amazon is also expanding their service from books to other merchandise which is a plus. But like in any case, working with other services or third parties can bring risk. I feel like Amazon will surpass and find ways to adjust and work their way through. 2. I agree and disagree at the same time with Ravi Suria’s analysis. Amazon present negative cash flow which results higher debt risks than other retailers who has a lower ratio of debt. It created doubt in people if Amazon was able to carry themselves and not run out of money. But then I disagree because at the end, Amazon strategically used those critics and remarks and make adjustments to their operating procedures. Amazon did not change their business model which resulted a missed in Suria’s predictions that were to be expected. 2. Amazon today is one of the largest and known web retailer in the United States. There are people from all over the world buying products and even selling their products. Their business model is still pretty much the same. You can find...
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...I choose Amazon…………………………………………………………... 3 Amazon's Channel Design including its use of the Web………………………………... 3-4 Web Beginnings……………………………………………………………………... 4 Today………………………………………………………………………………… 4 Amazon’s future including key strengths and weaknesses……………………………… 4 Amazon’s Vision and the changing Web…………………………………………… 4-5 Key Strengths and Weaknesses……………………………………………………… 5-6 Opportunity and Threats…………………………………………………………….. 6 SWOT Analysis…………….…………………………………………………………… 7-9 Amazon’s Ethical Challenges…………………………………………………………… 9 Changing Web Ethics……………………………………………………………….. 9 Ethical challenges for Amazon……………………………………………………… 9 Strategy Recommendations for Amazon………………………………………………... 9-10 References……………………………………………………………………………….. 11 Introduction Amazon is one on the world’s undisputed leaders in web-based commerce. Although they were not the first company to capitalize on using the World Wide Web for commerce, they certainly raised it to an art form. When you think of shopping on the web, you think of Amazon. Amazon perfected this channel and continues to innovate as the technology and access to web grows. Amazon has zero brick and mortar retail locations, it’s business was founded on the web and this basic model is the delivery mechanism for it products, content and services from manufacturers, wholesalers, and publishers from around the world. Amazon has over 40 distribution centers around the globe. Amazon’s leadership in online commerce continues to...
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...Amazon.Com’s E-Business Model Amazon.com’s E-Business Model Contemporary Business – Bus 508 Dr Linda Harris July 21, 2011 Question 1 1. Discuss the pros and cons of Amazon’s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. As the economy continues to grow and change so will consumers with how they shop and purchase their everyday needs. Having a successful business online takes time and effort to ensure that consumer needs are being met. This paper will discuss how Amazon has been able to stay so successful with new and upcoming competitors. In addition to discussing the success, the struggles will be evaluated as well as ways to improve the company. When visiting Amazon, one obtains several products at one time;-it is a one-stop shop similar to an online “Seven-Eleven Store. “ Amazon is the largest online book retailer composed of a multi million-customer base. Jeff Bezos, the founder of Amazon, had great confidence in the World Wide Web even before the dot.com boom. He used the internet as the core of Amazon's business model. Amazon customers are able to search inside the book before buying it, read customer ratings on products of interest, and purchase products at low prices. Amazon’s initial target market of online book consumers, proved to be very lucrative. In addition, the expansion into more diverse product offerings beyond books, such as music, DVD & video, toys, electronics...
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...Amazon E-Commerce Evaluation and Recommendations Estevan Pena Devry University E-Commerce for Small Business Introduction Amazon is E-commerce Company, Amazon got its start as an online bookstore, but as the industry evolved so did Amazon. Amazon has become one of the largest online retailers now selling a variety of products including electronics, DVDs, CDs, video games, clothing, and general merchandise in the world. Today Amazon.com is the largest Internet-based company in the United States. Founded by Jeff Bezos in 1994 was the release of the first online bookstore, Amazon.com Inc. revolutionized the industry. Amazon’s initial entry into the book industry was a bold and strategic move competing with traditional Brick and Mortar stores such as Barnes & Noble Inc. and Borders Group Inc. When Amazon.com began moving from just books into a larger variety of products like CDs, video games, electronics it did not take long for them to be in completion with the larger more dominant players in their perspective markets. Amazon is a prime example of a company that started of small and became a dominant force due to smart investments and a strong business model. When it comes to the online market, which many would consider the future, Amazon has left a considerable amount of its competitors in the dust as it pertains to sales and it continues to grow and evolve, Company Evaluation Type of Company Before Amazon.com sold its first book in July of 1995 the world had...
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...Paper Amazon .com is one of the largest online retailers. In recent years, Amazon has shown its intention to broaden its core competency to become a more diverse online retailer by adding computing and storage services to its product base. In this paper the team will address whether Amazon’s strategy is a good one. The team will also describe how Amazon uses each component of a database, review the data management issues encountered by Amazon, share how Amazon addresses the relationship between data, information, and knowledge and lastly, describe how Amazon uses both e-business and e-Commerce for B2B and B2C. The components of a database and how Amazon uses each. Databases are comprised of four different aspects – tables, forms, queries, and reports. Tables are a group of rows and columns that make up the entire database. They are made of information can be “entered, edited, stored, and reviewed” (Mickey, 2005). Amazon uses tables to keep records of users and sales. For example, Amazon would use tables to keep records of a user’s credit card number, address, and age, as well as a record of purchases and sales made by that user. This information would be kept in the Amazon’s database track what kinds of purchases and sales the user makes, and to deliver the products to the user. Forms are used to “enter, view, and edit data” (Mickey, 2005). According to Chris Cruikshank (1999) “The form should have some form of validation so that the user cannot enter ‘rubbish’...
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...storage services to its product base. The team will address whether Amazon’s strategy is a good one and describe how Amazon uses each component of a database. Also review the data management issues encountered by Amazon, share how Amazon addresses the relationship between data, information and knowledge, and last, describe how Amazon uses both e-business and e-Commerce for B2B and B2C. Components of a Database and How Amazon uses each Databases involve four different aspects: tables, forms, queries, and reports. Tables are a group of rows and columns that make up the entire database. They are made of information that can be entered, edited, stored, and reviewed (Mickey, 2005). Amazon uses tables to keep records of users and sales. For example, Amazon would use tables to keep records of a user’s credit card number, address, age, and a record of purchases and sales made by that user. This information would is kept in the Amazon’s database to track what kinds of purchases and sales the user makes and to deliver the products to the user. Forms are used to enter, view, and edit data (Mickey, 2005). According to Chris Cruikshank (1999), the form should have some form of validation so that the user cannot enter rubbish onto the database. Numbers must store numbers; dates should store dates and so on. Amazon uses forms for user’s information. When applying for an account on Amazon, one must fill out a name, an e-mail address, and a password. Later, one must also enter credit card...
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...examine critically business model of Amazon.com. Furthermore, debate issues that concern its presence on the market and discuss whether Amazon.com would be an appropriate acquisition target for Wal-Mart in the years 2004-2006. Amazon.com was established in 1995 by Jeffrey P. Bezos, current CEO. Company started its activity as a pure online book retailer and since then has diversified into music, video & DVD, electronics, accessories, photography and other products which vary in different countries. In the 1997 company was listed on a stock exchange and common stock is quoted on Nasdaq National Market. At present is one of the biggest e-retailer in the US, Germany, France, United Kingdom, Japan, China and Canada. Moreover, Amazon.com has great competitive edge as being the pioneer in the e-commerce. AMAZON’s BUSINESS MODEL 1. Vision- “to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” (http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-faq#14296) 2. Mission- “to be all things to all people.” 3. Amazon’s Customer Experience Pillars- “Focusing strategy on customer expectations by offering low prices, convenience and wide selection of merchandise.” (Scholes, 2006) Internet Business Models/E-commerce for Amazon * Merchant- is a retail merchant that operates only over the web. * Affiliate- in contrast to the ordinary portals, the affiliate model, provides purchase...
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...Issues: ○ Perceived as clunky to use and difficult to load content onto ○ Lack of a well defined e-book distribution channel and promotion model ○ E-reader itself was sold for a higher price than many e-book devices or tablets available ● Underway Shift ○ E-Ink Technology made reading possible in any light and with minimal power usage ○ Distributors develop ecosystem around content, publication and delivery of e-books ○ New pricing model to replace traditional agency-based pricing model ● Market is Heading to price e-books lower than traditional books and publish them together Market Segments ● Media Junkies: competitive pricing and high content ● Children: as Christmas gifts since its one of the cheapest tablets and for educational needs ● New Gamers: For amateur gamers as memory/processor/screen wasn’t suited for gaming ● Higher Education: $10 billion textbook market in 2012 has the largest potential. Tech savvy students will find digital content to be cheaper and easier to carry around than textbooks Needs & Demands ● A product that can give access to all digital media content and not just books ● Provide digital media access, web access and additional features at a lower price than iPad ● The market was moving to a feature based e-reader with more control through apps/services Switching Cost ● Cost associated with loss of compatibility for music files and e-books when switching tablets ● Content not purchased at Amazon is difficult to access without Kindle...
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...The History of Amazon Amazon is a Fortune 500 American e-commerce company (Amazon Global Resources, 2009). Its principal corporate offices are located in Seattle, Washington (Amazon Global Resources, 2009). It is the largest online electronic retailer in America (Webley, 2010). Amazon was founded in 1995 by Jeffrey Bezos’s (Amazon Global Resources, 2009) . Since Bezos opened the doors of Amazon he has defined and redefined online retailing for the rest of the Internet retail world. When the doors first opened it was from a two car garage in Bellevue, Washington (Amazon Global Resources, 2009). It was nothing more than an online bookstore; the inventory was stored in Bezos’s two car garage. It has now expanded to offer the Earth’s biggest selection of books, CDs, videos, DVDs, electronics, toys, tools, home furnishings and house wares, apparel and kitchen gadgets (Amazon Global Resources, 2009). Customers still rank Amazon.com as the best online Internet retail shopping website (Farfan, 2011). This was based on their internet shopping experiences during the 2011 holiday shopping season (Farfan, 2011). Identifying Amazon’s Mission, Vision Statement and Primary Stakeholders Mission and vision statements are written for the employees and customers. Mission statements can be one sentence or a short paragraph which describes the purpose of the business. It identifies, the companies values and principle business aims. A vision statement can also be a sentence or a short...
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...been based on a critical success factor consisting of constant technological innovation. This strong sustainable competitive advantage has been placed side by side with a continual effort in catering for the needs of Amazon’s different customer groups. Barriers to Entry If we analyze the online retailing industry according to Porter’s five forces framework, we can state that the industry presents high barriers of entry in terms of technological knowledge/experience and distribution channels. More specifically, the expensive start-up (or switching) and maintenance costs of equipment and expertise often deter new entrants in e-retail business. In terms of government regulation, the online retailing industry may face some issues with national authority restrictions, as is the case of China with the social networking site Facebook, as well as compliance issues on data protection and privacy. On the other hand, the industry presents low barriers in terms of the ease with which an online retailing store can differentiate their products and services offered to a new market. Nonetheless, if the start-up company lacks the technical capabilities and proprietary resources in establishing itself, penetration in such a market is more difficult than not. As such, given Amazon’s extensive market share and customer base, new entrants to the market do not pose a serious threat to their company. Threat of Substitutes The industry may, however, suffer from substitutes: traditional retail stores...
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...was adopted soon after because the Amazon River is the largest in the world, and the letter “A” would help the company to show up at the top of alphabetical lists. Amazon, since its release in 1995, has become one of the Fortune 500 e-commerce company (btmaushart.iweb, 2014). In the business world, Amazon is currently the largest online retailer in the world. It manufactures consumer electronics, most widely known is the Amazon Kindle e-book reader, and has an extensive cloud computing service. Amazon’s start-up was initially only an online bookstore, giving Amazon an advantage of having more and readily available books than any long-established brick-and-mortar book store. By the last 1990’s, Amazon’s success had enabled an expansion from an online bookstore to a wide variety of other products including, but not limited to: CDs, videos, DVDs, electronics, toys, tools, home furnishings, and more. In addition to those products from Amazon, Amazon also sells products from well-known retailers through intermediaries’ agreements. Among those retailers are Toysrus.com Inc., Target Corporation, and Circuit City Stores Inc (FundingUniverse.com, 2014). Amazon takes on a face of a company that came out of nowhere and took over the internet in terms of e-commerce. Amazon has customized the way people can buy things online and continues to come up with new technology and obtain customers all over the world because the service it can provide; quick, online, convenient, and easy online...
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...Amazon.com INC is considered to be the largest online retailer in the world, and sells over the forty categories of goods. Amazon concentrates almost its entire business in e-commerce. In a nutshell, Amazon’s major line of businesses can be categorized as online retail, Internet services. Amazon situates itself as destination site, where it doesn’t stock everything that it offers. It holds a retail strategy where it acts as a channel for other retailers, or sellers to use its site to sell their goods, and takes a cut of each purchase. Amazon’s use of this strategy has made amazon a leading long-tail retailer, the concept where online stores can drive revenue from much broader set of products that can be achieved in physical store offering a much wider variety of products. Though not as significant revenue driver Amazon also utilizes internet services as almost a line of business, where it leases out server space to other companies and individuals, known as Amazons Web services. Its internet services are strongly connected to its online retail business and kindle library, where it introduced amazon prime, that essentially lays out the all you can eat business model by charging an annual subscription fee. Amazon has also recently expanded its business into manufacturing and distributing kindle tablets, an E-book. Amazon sells the kindles and a very low price, that barely covers cost of production, and relies on the assumption that its consumers will cover the cost of production...
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...want to be the world's most customers Centric Company. . That we focus increasingly on trying to get the customer experience right. Within that we want to build a place where people can come and discover anything they might want to buy online." (Mellahi & Johnson, 2000). Executive Summary Amazon.com is an American electronic commerce company which has become as a symbol of internet business. It was first founded by Jeff Bezoz in 1995 when he began selling books online and to the date now, Amazon.com is the leading online market worldwide for its books and various other products. It was when the company aimed to be successfully the World's most customer oriented company. Customers can discover various products they wish to buy at reasonable and affordable prices. The strategy used by Jeff drove him to become the online leader of market. The main strategy used was to orient the business towards customers and to be innovative with continuous improvement in online shopping skills. Initially, it was used to be online sale of books and with the use of strategy and innovative approaches the business was expanded its boundary with introduction of various other products like toys, CDs, DVDs, computer software, apparel, furniture and goods etc. Amazon offers a large selection of books and wide range of products thereby making itself distinct from its competitors. Struggling with your essay? We can help! We can help get your coursework back on track, take a look at our services to...
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