...• Describe their business model and explain their supply chain strategy. Amazon’s business model is based around customer satisfaction. Customers want three things, according to Bezos: the best selection, the lowest prices and the cheapest delivery. (Amazon, 2012) It strives to obtain efficient customer fulfillment, while cutting sales and operating costs. The company first began selling just books; today Amazon is known to be the biggest online retail store in world. Amazon makes its profits from a few customer sets. The area they focus on the most is the consumers. They provide millions of products that can be purchased quickly and hassle free by the customers. They try to provide the best shopping experience possible for consumers. They have developed new tools such as recently viewed history, recommendations based on past purchases and one-click check out to improve the customer’s shopping experience. Another area that is creating profits for the company is their services. Amazon has become a platform for others to sell and advertise their products. For a fee, Amazon will allow other companies and individuals to sell their products through Amazon’s website. They also provide fulfillment services, for those who want to store and ship their products through Amazon. A few years ago, Amazon began an IT infrastructure service to Developers called cloud computing. Today, this service powers hundreds of businesses in 190 countries. Amazon has also introduced their product,...
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...Business Model of Amazon.com http://www.indiainfoline.com/bisc/ford1.html Amazon.com is the pioneering bookstore on the Internet that first opened in July 1995 by Jeff Bezos. The firm offers online shopping services and partnership opportunities such as online search for books, music and video items. The products that they sell include an array of audio, video and book titles. Amazon has one of the widest selections and employs international shipping to virtually every corner of the globe in just a few days. Amazon’s focus is having the biggest selection of free-electronic greeting cards, online auction and millions of books, CDs, videos, DVDs, toys and electronics. They have expanded to different areas of the world, such as Amazon.co.uk and Amazon.de, to service consumers outside of the United States. They aim to be a Cost leader in which their firm has lower costs than the competitors. They have employed different Amazon branches in different parts of the world to lower costs. This allows Amazon to ship their products at a lower price from each point of shipment to the consumer. In recent years, Amazon.com has expanded from being just an online bookstore to an all around online shopping experience. They have coined the tag line "Earth’s biggest selection". Amazon has diversified into different websites. These are the Internet Movie Database (www.imdb.com), LiveBid.com, amazon.livebid.com, drugstore.com (an online retail and information about health and wellness), gear.com...
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...network of customers and partner companies, there is a large user base to support the huge size. Choosing B2C as the platform, Amazon kept a massive user base, and shared it to the third party enterprises. The more high-quality enterprises are attracted, in turn, the more valuable the platform is. It is because it can meet more different needs of users. When Amazon conducted the platform business, it had already had the support of tens of millions of users. It applies to commodities also, Amazon share the developed categories to the third party enterprises. Meanwhile, Amazon actively opens up more new categories with them. It makes Amazon’s platform have sufficient depth and competitiveness in each category. Moreover, Amazon treats its partner companies and itself equally. The goods of the partner companies and its self-operated purchased goods get the same exposure to have the same opportunity to be displayed in the search listing page of the site. In each product (no matter self-operated or associated), both commodity prices and entrance of partner companies information are clearly shown. Resources of homepage and channel pages are also equally shared to associate enterprises. The treatment on different partner companies is non-discriminatory, not depends on the size of their business to provide differentiated services, but depends on their business type and charging. Also, the search ranking, recommended frequency, results of the goods of the partner companies would not be...
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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’s business strategy and revenue model: A history and 2014 update I’ve used Amazon as a case study in my books for over 10 years now since I think all types of businesses can learn from their digital business strategy. From startups and small businesses to large international businesses, their focus on the customer, testing market opportunities made available by digital technology and their focus on testing and analysis to improve results. I aim to keep this case study up-to-date for readers of the books and Smart Insights readers who may be interested. In it we look at Amazon’s background, revenue model and sources for the latest business results. We can also learn from their approach to digital marketing since they use digital marketing efficiently across all customer communications touchpoints in our RACE marketing planning framework: * Reach: Amazon’s initial business growth based on detailed approach to SEO and AdWords targeting millions of keywords. * Act: Creating a clear simple experiences through testing and learning. * Convert: Using personalisation to make relevant recommendations and a clear checkout process that many now imitate. * Engage: Their focus on customer experience, “Customer Obsession” as they call it is shown by the way they consistently outperform other retailers in their ACSI customer satisfaction rating too. We have our own internal experimentation platform called “Weblab” that we use to evaluate improvements Experiments and...
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...online retail line of business includes those products sold by Amazon as a traditional retailer, most commonly as a low-cost retailer. Amazon claims to have "Earth's Biggest Selection" of products available through its family of websites, sold at the lowest cost at a small profit. The company started as an online book seller, rapidly expanding into music and movies, and ultimately into electronics and household goods. But Amazon doesn't stock everything that is sold through its website. Another part of its retail strategy is to serve as the channel for other retailers to sell their products and taking a cut of every purchase. Amazon maintains its status as a destination website, but does not have to maintain inventory on slower-selling products. This strategy has made Amazon a leading long-tail retailer, expanding its available selection without a corresponding increase in overhead costs. Extending this long tail retail model further, Amazon introduced the sale of used products through its seller marketplace. Originally developed to compete with eBay, the seller marketplace provides another retail revenue stream for the company without the need to stock products in its warehouses. Advertising and shipping are handled exclusively by sellers, with Amazon taking a cut of every sale simply for providing the channel. Amazon's internet services cannot easily be discussed as a standalone line of business because it is deeply intertwined with both its retail business and the Kindle ecosystem...
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...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. I Is the business model designed for selling book on internet apply for different category of products? The success of Amazon Business...
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...of 27 1. Executive Summary When Amazon.com started its business operations on 16-07-1995, with a few employees packing & shipping boxes of books from a two-car garage in Bellevue, Wash. The company's founder and CEO, Mr. Jeff Bezos used some of his time on the road to write the company's business plan when he was leaving N.Y. City for the Pacific Northwest. On its 15th-anniversary in 2010, Amazon is truly proud to be one of the world largest online retailers, selling everything from musical instruments and sports equipment to household appliances and apparels (Kayla, W. 2010). In our coursework group assignment, we are tasked to study and analyse the strategic management issues of Amazon.com. The case study will base on fourth quarter of 2007 as a current year. We will be evaluating the company's external and internal environments, how the company emerge into the industry by means of its strategies management in dealing with economic, technology & distribution issues and competition. We will also look at the company's vision & mission and it relate to the expansion of its product lines and reach, to increase its revenue and market share, and to understand and consider their possible near-term and long-term objectives that the organization could pursue. Lastly but not least, to out up recommendation for Amazon and conclude it with our learning experiences on BPS module. Page 3 of 27 2. Company Overview Amazon was founded by Mr. Jeff Bezos in 1994 with head office in Seattle...
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...Assignment 1 – ECOM 320 1. What are the main functionalities and features included in an e-commerce server? E-commerce servers some or all of the following system functionalities: * Digital Catalog – used to display goods * Product Database – used to provide product information * Customer on-site tracking – used to personalize and/or customize products and to identify common customer paths and appropriate responses * On-site blog; used to engage customers in conversation and community response functions * Shopping cart / payment system – used to execute a transaction and provide secure credit card clearing and multiple payment options * Customer database – used to accumulate customer information, making it easier for returning customers * Sales database – provides after-sale customer support * Ad server, email server, campaign manager, ad banner manager – used to coordinate marketing / advertising and log behaviour of customers linked to email and banner ad campaigns * Site tracking and reporting systems – used to understand marketing effectiveness by tracking unique visitors, returning visitors, products purchased, and information identified by marketing campaigns. The features that are unique to e-commerce are: * Ubiquity – it is accessible and available anyplace and at anytime. * Global Reach – the potential customers are directly correlated to the number of internet users in the world. * Universal Standards – the technology...
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...features included in an e-commerce server (e-commerce suite)? Some of the main functionalities and features included in e-commerce servers/suites involve the ability of them to support different business models, while still maintaining complete functionality, and utilizing various tools to assist in business processing models. They also should be pre-programmed with local tax and shipping rules, and enable the user to connect with ease to existing business systems. Specific examples include online catalogs, order taking capabilities using an online shopping cart, and online credit card processing. 2. Explain how and why designing mobile web pages differs from designing traditional web pages. Mobile web page designing differs from that of traditional web page design due to the fact that mobile sites have larger restraints on data storage and processing power, as well as slower connection speeds. This also means that mobile sites require simplification, and can’t be as complex as traditional web pages. One must also take touch screen interaction into consideration. 3. Describe the major business-to-business models. Give examples of companies for each model (other than those listed in your readings). 4. Explain why it is difficult to categorize e-commerce business models. 5. Explain how the Internet and e-commerce have impacted the five forces of industry competitiveness. 6. Describe HTML and XML, and...
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...The overall benefits, challenges and opportunities to new businesses using internet marketing Task 1 Access * More frequent individualization and communications to build relationships The main benefits and opportunities of using the above are as follows. When you have a customer’s information you can work out what they might like. With this information you can send them relevant product information and special offers instead of sending everyone the same e-mails which they might get sick of and completely disregard or even choose a different business. Using the information correctly will build a relationship with the customer which in turn will build customer loyalty which is a very important benefit considering the amount of competition. Amazon is good example of a business using customer information correctly and individualization for customer relations. They build relationships with customers by monitoring and collecting a customer’s purchase history and sending out personalized advertisements via e-mail, social media and as soon as a customer logs in tin the website. This makes it more personal. * Use of communications to promote e.g. Special offers, product launches The main benefits and opportunities of using the above are as follows. The use of online communications can save a lot of money in advertising new products and offers which if it is not done online then it would need to be done using leaflets and flyers which need to be delivered as well, which...
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...Instructor’s Manual: Chapter 2 E-commerce Business Models and Concepts Teaching Objectives • Identify the key components of e-commerce business models. • Describe the major B2C business models. • Describe the major B2B business models. • Explain the key business concepts and strategies applicable to e-commerce. Key Terms business model, p. 65 business plan, p. 65 e-commerce business model, p. 65 value proposition, p. 66 revenue model, p. 66 advertising revenue model, p. 67 subscription revenue model, p. 67 transaction fee revenue model, p. 67 sales revenue model, p. 67 affiliate revenue model, p. 67 market opportunity, p. 68 marketspace, p. 68 competitive environment, p. 72 competitive advantage, p. 72 asymmetry, p. 72 first-mover advantage, p. 73 complementary resources, p. 73 unfair competitive advantage, p. 73 perfect market, p. 73 leverage, p. 73 market strategy, p. 74 organizational development, p. 74 management team, p. 74 e-tailer, p. 78 barriers to entry, p. 78 community provider, p. 80 intellectual property, p. 81 content provider, p. 81 portal, p. 84 transaction broker, p. 85 market creator, p. 86 service provider, p. 86 e-distributor, p. 88 e-procurement firm, p. 88 B2B service provider, p. 89 application service provider (ASP), p. 89 scale economies, p. 89 exchange, p. 89 industry consortia, p. 90 private industrial networks, p. 90 industry structure, p. 93 industry structural analysis, p. 94 ...
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...similarities and differences between the Google and Yahoo business models? Google and Yahoo are very similar, but there are also key differences between the two companies. Each site is considered a destination and is marketed as a place where consumers can fulfil their time on the internet by utilizing many different functions. Both of the companies can be considered B2C, or Business to Consumer companies. This means that they provide their services to consumers. Google and Yahoo are both portals, which means they offer users not only a functional search engine, but also a bundle of integrated services and content. This includes the ability to read the news, meet and chat with others and search for different entertainment such as celebrity gossip. Yahoo offers a search engine to users, but it also works to provide news, chat, e-mail and music. Google focuses mainly on being the very best search engine on the market. The revenue model for Google comes mainly from advertising and referrals from affiliates. On the other hand, Yahoo receives its revenue from advertising, subscription fees and transaction fees. The main competitors for Yahoo are AOL and MSN, while the main competitors for Google are Bing and Ask.com. 2. What are the most critical challenges and issues companies face when expanding the reach of their markets? Expanding the reach of 3. Describe the major business-to-business models. Give examples of each model (other than the ones listed in the...
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...Business 121 Slide Ⅰ 1. What is a business model? * * A business model describes the rationale of how an organization creates, delivers, and captures value.(How a company intends to make money / the logic by which it sustains itself financially. Or how your idea actually becomes a business.) * * 2.Business model canvas? * * * * * * * * * * * * * * * * * * * * * * * * * * 3.What is a multi-sided platform business model? Give an example, list the customer groups and explain how they interact with each other. * * Multi-sided Platform is one of the business model patterns. Multi-sided Platform brings together two or more distinct but interdependent groups of customers. Such platforms are of value to one group of customers only if the other groups if customers are also present. The platform creates value by facilitating interactions between the different groups. A multi-sided platform grows in value to the extent that it attracts more users, a phenomenon known as the Network Effect. * Network effects and Positive feedback loops are economic terms that describe the snowballing benefits to front-runners in some markets. * * Example and analysis: * LinkedIn is the world’s largest professional network. As of 31st March 2012, LinkedIn had 161 million members in over 200 countries. LinkedIn helps the professionals...
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...market was Chicago, followed soon by Boston, New York City and Toronto respectively. It is also one of the fastest growing technology companies of the decade. By October 2010 Groupon was available in 150 cities in North America and 100 cities in Europe, Asia and South America, and had 35 million registered users. By the end of 2015, Groupon served more than 500 cities worldwide, nearly 48.1 million active customers and featured more than 425,000 active deals globally. Our Mission To connect local commerce, increasing consumer-buying power while driving more business to local merchants through price and discovery. Our Values Start with the Customer We’re always imagining new ways to exceed the expectations of all our customers—both consumers looking for great experiences at a great value and merchants seeking solutions to attract more customers and run their businesses better. Our deals and business tools connect the two in a seamless way that brings significant value to both their lives. Great People Make Great Companies We’re a home for creative, problem-solvers, and innovators alike—those with the passion and know-how to transform what-about into the products and services our customers need and want. We know we’d be nothing without the people that make up this company, so we’ve created a workplace that’s not only inclusive and fun, but also rewards achievement with increased ownership and challenges. Intolerant of Mediocrity We’re in relentless pursuit of excellence...
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