Research Topics: Jeff Bazos

Amazon Case Analysis

Introduction             Amazon has the first mover advantage in online bookselling industry.  In the onset of 2004, it is named to be number one in on-line service, has six website servers, 32 million customers in 150 countries, 900,000 associate programmes linking up or having contents of Amazon.  However, it can influence the general and industry environment (a possible strength/ weakness creation) or be influenced in return (a possible opportunity/ threat eruption).  Its objective then should not be strictly based on competitive action and responses implementing its mainstream strategic plot of expansion through customer innovation. This paper presents PEST and Five Forces Analysis, internal resource audit, value chain analysis and core competency identification of Amazon.  It will show why the firm needs to modify and adapt its strategic outlook relative to its environment and internal resource and capabilities.            PEST Analysis Although internet security and systems have improved, the wide inequality of technology distribution in the global arena undermines the endeavors of technology- and innovation-based firms like Amazon.  Apparently, sales of these companies will be limited to the top 20 countries that posted an average of at least 50% of internet penetration against the bottom 200 of less than 5%.  The more-or-less 90% of global population without internet access is aggravated by the top 20’s similar condition although prospects for the latter of becoming potential on-line customers are definitely higher than the bottom 200.              Further, building the technological environment for the bottom 200 could be a relatively easier national concern than building the necessary human capital to facilitate and use such infrastructure.  This fact goes beyond the budget limitation of institutional segments (government, businesspeople, and academic foundations) and requires subsequent, if not preceding, popular culture approval.  The less tolerant cultures like that of Chinese to Western aspirations is an example of e-commerce challenge belittling the power of technology against the rule of cultural supremacy that is conservative of modernism uncertainty that could attack political and cultural beliefs of local population.                       Finally, the importance of technological education for both customers and businesses is an indispensable platform required to augment internet penetration and socio-political resolutions.  Amazon’s case charges against email forgeries in 2001 and 2002 implied the adversary effects of e-commerce to consumers and legal services providers alike including the government’s capacity to earn.  With incentive to learn the technology skewed to profit-based opportunists, legitimate benefits attributable to core stakeholders will only be sub-optimal and could ultimately pilot to discourage customer reliance on online shopping leading to unnecessary costs accruing to technology providers (litigation, advertisements) and government (monitoring).                       In the less internet penetrated countries, foreign direct investments not simply portfolio capital is needed to stimulate the demand for e-commerce at a significant level.  This move would be limited to open countries while close countries could be approached through amplified political relationships, possibly trade pacts.  At the end, strong governmental lobbying favoring the technology-based industry or pre-determined national priority to modernizing key institutions are supporting conditions to initially deploy rational market segmentation to underdeveloped and developing nations.  Seeing technology diffusion initiated by political hierarchies is more dependable pre-condition than relying on the citizen-driven model of demand because it has the ability to relax religious and cultural ideologies at the face of developmental and economic issues towards a sustainable national dominance theory.   Five Forces Analysis             This analysis is more direct to the firm than PEST factors since the intensity of industry competition and profit potential is a relative direct factor of industry analysis observed in five forces; namely, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and intensity of rivalry among competitors.               Threat of entry is considered medium to low.  Being the first mover in online bookstore industry, Amazon would be the best example of what amateur firms would be faced.  The factor that separates Amazon from the inexperienced firms is its 8-year capital intensive and continuous upgrade of services through acquisitions and alliances, nurturing the commission-based associate websites, and endless technology development and innovation.  Imitating such would also require relationship building which is difficult when relationship is already established by the first mover, or in the case of untapped technology partners, requires significant capital and strategic plan proposals to move the other party.  In both cases, known industry players would be the benchmark requiring the deal a considerable amount of time and money impractical for the new player.                 However, switching costs is moderate for customers giving a breathing space for niche players like eBay to exploit auctioning markets or Wal-Mart to merely use their website to highlight real shopping experience at affordable prices.  This fact bestows Amazon untapped and low-valued niche market available to small players accompanied with sub-optimal but effective (that is, operating under positive results) earnings from the industry entire e-commerce market.  Also, expected retaliation from these niche competitors is likely to happen when the diversified Amazon poised threat of the former treasured small market share.  The diversity of products and markets in the industry give niche players an enforceable claim over the moderately to un-served market base over diversified industry players like Amazon.               Supplier’s power, buyer’s power and threat of substitutes are low.  Since retail industry has a minute 1.5% online sales, industry firms have an upper hand over retailers offering the former technology and internet presence to the latter untapped global exposure.  This made e-commerce firms significant customers to suppliers particularly the ones who have global marketable products/ services.  Except for B2B transactions (like Target commissioning Amazon’s technology), customers both merchants and pure buyers using industry technology are independent and geographically segregated from each other that makes their individual purchase insignificant to firms while their web-based purchase decisions are supported by firms’ convenient and general-to-rare product shopping at discounted prices and delivery options.  These made their switching costs expensive while oftentimes diminished their ability to purchase the needed item at times when decisions are delayed.  As a result, threat of substitutes become a sub-optimal, if not, infeasible alternative.                           Lastly, competitive rivalry is medium to high.  There are numerous industry players; however, they can be considered niche (eBay) and overly diversified (Yahoo!) competitors of a diversified industry firm like Amazon.  As a result, a head-to-head competition exists against Barneys (who is backed by retail stores) and Price line (who has the highest employee per revenue contribution in the industry) created strategic group together with Amazon.  Adding the flame of intensified rivalry is the high fixed and storage costs of the industry since firms needed to stock inventory in their warehouses for ready delivery of an order.  Competitors also have little product differentiation, except for auctioned product maybe and other exclusive rights of players to sell supplier’s products, making customer switching costs low.               Entry to the industry will continue to lure small players to target a certain niche although large entrants would likely resort to unsolicited take-over of existing diversified firms like Amazon or slowly identifying and creating partnerships with web-based giant firms like Yahoo! or Google to realize industry position.  The supply chain actors and substitute products are derailed by the power and convenience of online shopping making the associated costs of outside the industry transactions crucial to their profit and satisfaction levels.  This vital border line between efficient and non-efficient transactions builds industry diversified players with numerous niche competitors competent of acquiring a huge pie in their profits because of their customized service in addition to intense rivalry in mainstream diversified industry wherein both long- and short-term strategies are considered equally value-creating activities.    Internal Resource Audit             Amazon has high ability to generate internal funds as showed by its cash equivalent of 3M in 2001 to 2M in 2002 most possibly from cost cutting activities that includes downsizing and inefficient distribution/ warehouse closures.  However, it also has also invested to partnerships in Dell and other auction houses that could result to gains for the company although its borrowing capacity through public offering seems sub-optimal primarily because of the uncertainty of technological advancements that makes shareholders key financer of Amazon’s innovation and acquisition endeavors.  In relation to financial resources, patents and stock of technology not only gives the firm 20% share of web development from total revenues (additional internal fund generation) but also competitive advantage of one-click technology from Apple to back-up its browsing and searching convenience promise to customers.               The best thing about innovation culture in the firm is that the founder CEO Jeff Bezos maintains and flames it.  Thus, the process of keeping the learning- curve even at rough times and stock price falls created a reputation of customer-focused innovation to increase convenience protected in its 8-year existence, rooted in its 1995 infancy and stored in the heart of the CEO since his 14th birthday.  The innovation culture is enhanced by recruiting top executives who have thorough experience and knowledge in areas of supply chain management, logistics and international relations to support geographic expansion of markets in Canada, Japan and France wherein 2003 figures showed 37% share on revenues of countries outside North America.   Value Chain Analysis             Primary activities such as inbound logistics is thoroughly supported by secondary activities such as selective procurement and technological development that can filter the choice of product/ service from retailers/ manufacturers for customers to have safe transactions.  In addition, its firm infrastructure allows its operations and marketing to be compressed in one commission-based scheme provided to its 900,000 and growing associate partners.  Further, its infrastructure also allows its Seattle headquarters to minimize tax payments not to mention the strategic outbound logistics of the Delaware center that enabled the inventories closer to East country markets like Japan and other European countries.  As a result, the value chain combines the relatively low-cost and supportive environment of Seattle headquarters that houses technology developers while creating efficient procurement, storing and delivery products through closing of inefficient warehouses and opening strategic and value-adding ones.     Resource and Competencies             Unique to Amazon is its patent-protected software technology.  This resource would surpass industry standards with benefit of securing the right to exclusively use and sell the developed innovation.  Other close-rival firms may have strategic and innovative-like leaders such as Bezos or executives with experience and knowledge of the industry but the value-adding capability that it can offer to customers would be amputated, if not, eradicated for use due to legal constraints.  In a similar manner, large firms wanting to enter the industry would have large capital base and shareholder or public financing capable of pirating Amazon key employees or buying close competitors.  However, without buying the whole company such seemingly unethical would not injure the competitive advantage of Amazon much because patents do not accrue to individual employees rather the company.  As a result, stagnation (diminishing firm’s value) or over-complexity of technology (higher costs) would be the long-term position of imitating rivals.             The most prominent core competency of the firm would be its strategic plot of expansion though customer innovation.  It has the costly-to-imitate financial and technological resource, valuable firm infrastructure, rare strategic leader and top management composition and non-substitutable software technology.  These resource and capability combinations that possess the four criteria (although may have two or more realized criteria) suggest that sustained competitive advantage is present to the firm’s patented innovation.      Conclusion             Opportunities lies in the further modernization of retail sector and realization of global markets particularly those in top 20 of the efficiency, convenience and diversity of e-commerce.  Threats are identifiable in bottom 200’s cultural and political boldness that would take decades of ideology cycle, perhaps, long-term negative economic recession due to failure of market actors to use and exploit available resources efficiently.  Strengths of patented software innovations would give the firm sustained competitive advantage that can leverage long-run internet penetration of untapped global markets.  However, weakness on niche competition would ultimately carry with it more valuable competencies due to focus strategies that would possibly be applied to win a share in certain markets.                                Due to these findings, Amazon should be selective in expanding its product line through expensive acquisitions.  A more fitting strategy would be expanding its market base to include developing countries that have bright prospects in embracing information technology at the fore, and subsequently, e-commerce.  It could advance initial development feats to these countries by establishing test areas and hands-on experience to prove the advantages of e-commerce.  The host government should be closely coordinated to achieve positive, supportive and multiplier results.  In effect, the core competency of its strategic plot would be modified to expansion through customer innovation and adaptation.   Credit:ivythesis.typepad.com

Amazon Case Analysis

Introduction Amazon has the first mover advantage in online bookselling industry. In the onset of 2004, it is named to...

Business Strategy of Amazon

Introduction             With the advent of the information technology, specifically the internet, it is said that more and more companies are existing in the online world. The changes in the business market also allows customers to change and become more dependent on online stores and online shopping than go and find something in shopping malls or retail store. One of the existing and considered as the largest and competitive online shopping in the world is Amazon. In this report, the goal is to analyse Amazon based on the case study provided. The analysis includes the discussion of Amazon’s s strategic intent, main resources and capabilities. In addition, this will also include analysis of the resources and capabilities that give sustainable competitive advantage and the recommended future strategy for the company.   Overview of Amazon             Amazon has been considered as one of the largest bookstore and online store in the global market. The company has been able to thousands of customers in over 150 nations. Amazon’s main website offers millions of DVDs, music, books and videos not to mention their products from household, electronics, apparel and clothes, cosmetics, drugs and others.  Thought the company has highs and lows, they are able to manage the companies and sustain their competitive advantage.   The company has also used some strategies to ensure that they will outgrow their competitors like Ebay.               Accordingly, Amazon is a company that truly popularized the context of online shopping by having the largest product supply online. In addition, it is one of the first industries to sell products deep into the long tail by having them all in their numerous warehouse as well as distributing products through their partner companies.             The founder of the company, which is Jeff Bezos, started the company without the assurance of being profitable. Unlike any other websites, Amazon grew in a slow manner and had their first quarterly profit at the end of the year 2002. From the on the company has been able to sustain the competitiveness in the online market.   Amazon Strategic Intent             Based on the given case, the strategic intent of Amazon is to become the number one choice of the online shopping for their shopping needs. Their website has been made to provide more convenience for customers who wish to buy certain items right away rather than wait for the delivery (See Figure 1). Amazon can now direct their customers to local stores that presently have the product in inventory. Consumers need not call all the local stores and tolerate taped messages and long waits to find a product. Even such Internet pure-play firm as Amazon, through its partnership with Borders, for which it provides website operations, can direct customers to the nearest Borders store offering the desired product. Customers need only provide a zip code. Integration of physical stores and online operations can also lead to greater efficiencies.  The strategy of the company uses the Internet and took advantage of its capability to reach more clients (Baldwin et al, 2002).     Figure 1 Repeat Customers as a Percentage of Order 1996 to 1999 Furthermore, Amazon strategic intent is to provide more options for their clients by partnering with other international and local suppliers. The company also diversified their offerings to different products, services, categories and other physical assets. Furthermore, based on the given case, the company’s strategic intent is to sustain their competitive advantage by compelling what the needs and demands of their target market and expanding their business portfolio in the global market.  The company’s strategic intent is to do their business in a slow but sure manner by becoming innovative in what they are offering for the customers.             Another strategic intent of Amazon based in case is its goal to be recognised and respected as a global bookstore and online shopping brand and to dominate the global market through their high quality product and service offerings. As discussed in the case study, the advertising and marketing strategy of Amazon have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products.  This is Amazon’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent online shop in different locations, such as in UK and other country, strong brand name and excellent reputation among customers.   Amazon has also been continuing to create affiliate websites to expand their business market among various consumers.   Amazon’s mains resources and capabilities The presence of strong as well as effective leadership in today’s organization imposes a great responsibility to the organization’s team and management networks as leadership implies the overall capacity of the organization’s performance like for instance, in terms of operations and research development.  It can be said that Amazon’s resources and capabilities can be divided in the management of the company specifically their leader which is Bezos, the ability of the management to effectively use strategic supply chain management and aligning it with their business process and information technology, their competitive advantage in the online market, and the financial resources that it gains through its successful approaches. Accordingly, the leader of the company has been able to use appropriate leadership style to solve the issue of the company in dealing with their online clients and consumers.  In addition, it can be said that the transformational leadership approach of their leader as a transformational leader has been able to lead the company. T can be said that successful business organizations need vital leadership as the latter serves as a successful vehicle for the organization’s stability and growth within the global market. Based on the given case, Amazon has been able to use four views of leadership which include the transformation view, power, paradigm shift as well as social responsibility view (Proctor, 2000). However, the CEO of the company has focused on the area of transformation to meet the changing needs of the global market.  Being a transformation leader that he is, the CEO of Amazon (Bezos) has been able to show a visionary value. The management of Amazon has been able to enhance not only the manager’s way of handling and managing their subordinates but most especially the fact that it enhances both the performance of the employee and the organisation as well which is very obvious in Amazon. According to Kim and Weaver (2000), the administration and management of a particular business organization entails full utilization of the resources of the company in order to lead, direct, and control operations to meet the set objectives.  Based on the given case study, it can be said that Amazon has been able to use strategic approach to sustain their competitive advantage. One of the capabilities Amazon is how the leaders of the company do their business.  Guided by their vision and mission, the leader and management of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders.  Another sustainable capability of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages. The ability of the management to diversify and differentiate their business strategy to dominate the global market can also be considered as the major capabilities of the Amazon.   Resources and capabilities that provide sustainable competitive advantage             In accordance with the case study to the business approach and strategies of Amazon it can be said that the company has been able to continue to grow and expand their business in the online market. It can be said that Amazon has been able to use various strategies which enable them to sustain their competitive position in the global market.  Based on the conducted reviewed in the previous section, it can be said that Amazon strategy includes differentiation approach and innovative approach. In doing so, the company has been able to have a sustainable focus on their core business values ensuring that their goals, objectives and mission are achieved.  In addition, the company has been able to sustain good relationship with its target market and all other stakeholders and the company focus itself on satisfying the costumers by providing them quality products and services in the online. The ability of the management to manage their financial resources and limit their expenses to sustain their needs for expansion has also been considered as one of the capabilities that sustain their competitive advantage. The strategies used by the Amazon include Intensive strategy, which aims to competently position and promote their products and services in the online market. The industry has also utilized the Integration strategy and forward integration in order to promote and closely manipulate where all the Amazon products and services are being sold. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company.              Based on the given case, it can be said that the two resources and capabilities of Amazon includes their flexibility and innovation strategy.  It can be said that the ability of the company to expand their business is through their ‘flexibility and innovation’ which enable Amazon to counter the risks of erosion and losing of their competitive advantage.  In order to cope with the various influences and effects of market environment changes, and to sustain their competitive advantage, the management of Amazon has been able to improve and expand its organisation so as to conduct business operations and activities on a global scale which include the expansion of Amazon through the online presence of the brand in different parts of the world and by making specific websites as well as considering merging and acquisitions (See Figure 2). Herein, the management of the company has been able to improve their organization structure its organisational structure to achieve their organisational objectives.  In addition, the improved organisational structure is done in order to initiate speedy and flexible measures in managing their internationally diverse employees. Figure 2 .Aside from this, the management of Amazon has also been able to focus on their research and development department and to initiate innovative strategies designed to provide a competitive advantage and edge in the marketplace. As business gravitates towards a global scale, entrepreneurs find themselves faced with the challenge of producing new and better products at reduced cost and market price. Daft (2003) pointed out that in managing a global environment, managers of Amazon must be characterised by the ability to bring about change through innovation and creativity. Further according to Daft, a revolutionised manager sees change, rather than stability, as the nature of things (2003). Innovation as a ground for doing business in the 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. In addition diversification approach is also considered by Amazon to ensure having sustainable competitive advantage. Part of the diversification is to generate new coffee products that would meet the needs of the consumers in various parts of the world. As discussed, the knowledge of the underlying sources of competitive advantage highlights the abilities and core competencies of Amazon as a world leader in coffee retailing industries. In this regard, the company must be able to determine strategies and ways to ensure that their competitive position and advantage are being sustained in all levels of the organization. Indeed, making a business successful in a particular setting demands crucial and detailed studies and examination of the factors that will generate the best results that will serve the aims and objectives of the company. In this light, owners of big business organizations operating in a competitive business environment should be in constant look out with its competitors and the overall status and events in the industry. Taking advantage of the opportunities and intensifying the strengths while minimizing the risks and weaknesses of a business firm greatly helps in predicting the success in business enterprise Jayne and Dipboye (2004) indicated that in highly differentiated industries intense competition results to more diverse operation systems and processes because the participation among different sectors within and outside the company is needed to gain more economic advantage. Assets, skills, and capabilities available to a particular business organization are pooled together to come up with better business strategies.   Amazon’s Future Strategy It can be said that the Internet provides opportunities for the online companies to develop relationships with suppliers as well as customers. It has been found that the number of competitive moves increased as Internet usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of e-commerce. It can be stated that the most effective Internet strategy for that Amazon can use in the future is a collaborative one with their channel partners.  It can be argued that a mixture of multiple revenue streams that monetizes content/database, uses e-commerce, and cross-sells through multiple channels is the key to success of Amazon. In addition, another future strategy of the company is to use integrated marketing communication to reach more clients in the global market.   Reference 7.0 Reference Bradley, F. (1999). International Marketing Strategy. Hertfordshire: Prentice Hall Europe.   Daft, R. (2003). Management. 6th Ed. Cincinnati, Ohio: Thomson South-Western.   Edell, J. A., & Keller. K. L. (1993). Analysing media interactions: Print reinforcement of television advertising campaigns (Working Paper). Durham, NC: Fuqua School of Business, Duke University.     Hollensen, S. (1998). Global marketing: A Market-Responsive Approach. Hampshire: Prentice Hall. Lowson, R. 2002, Strategic Operations Management: The New Competitive Advantage. New York: Routledge. Papavassilou, N. & Vlasis, S. (1997). Standardization versus adaptation of international advertising strategies: Towards a framework. EJM, 31(7): 504-527.   Peteraf, M (1993). The Cornerstones of Competitive Advantage: The Resource-based View. Strategic Management Journal, 14(2), 37-46.     Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.   Proctor, T 2000, Strategic Marketing: An Introduction, Routledge, London.   Sloman, J. and Sutcliffe, M. (2003). Economics for Business, 2nd Ed. Harlow, England:       Pearson Education Limited.     Williams, J. R. (1992). How Sustainable Is Your Competitive Advantage? California Management Review, Spring, pp. 29-51.           Credit:ivythesis.typepad.com

Business Strategy of Amazon

Introduction With the advent of the information technology, specifically the internet, it is said that more and more c...

Sample Amazon.com Case Study

Business Strategy: Amazon   Introduction             With the advent of the information technology, specifically the internet, it is said that more and more companies are existing in the online world. The changes in the business market also allows customers to change and become more dependent on online stores and online shopping than go and find something in shopping malls or retail store. One of the existing and considered as the largest and competitive online shopping in the world is Amazon. In this report, the goal is to analyse Amazon based on the case study provided. The analysis includes the discussion of Amazon’s s strategic intent, main resources and capabilities. In addition, this will also include analysis of the resources and capabilities that give sustainable competitive advantage and the recommended future strategy for the company.   Overview of Amazon             Amazon has been considered as one of the largest bookstore and online store in the global market. The company has been able to thousands of customers in over 150 nations. Amazon’s main website offers millions of DVDs, music, books and videos not to mention their products from household, electronics, apparel and clothes, cosmetics, drugs and others.  Thought the company has highs and lows, they are able to manage the companies and sustain their competitive advantage.   The company has also used some strategies to ensure that they will outgrow their competitors like Ebay.               Accordingly, Amazon is a company that truly popularized the context of online shopping by having the largest product supply online. In addition, it is one of the first industries to sell products deep into the long tail by having them all in their numerous warehouse as well as distributing products through their partner companies.             The founder of the company, which is Jeff Bezos, started the company without the assurance of being profitable. Unlike any other websites, Amazon grew in a slow manner and had their first quarterly profit at the end of the year 2002. From the on the company has been able to sustain the competitiveness in the online market.   Amazon Strategic Intent             Based on the given case, the strategic intent of Amazon is to become the number one choice of the online shopping for their shopping needs. Their website has been made to provide more convenience for customers who wish to buy certain items right away rather than wait for the delivery (See Figure 1). Amazon can now direct their customers to local stores that presently have the product in inventory. Consumers need not call all the local stores and tolerate taped messages and long waits to find a product. Even such Internet pure-play firm as Amazon, through its partnership with Borders, for which it provides website operations, can direct customers to the nearest Borders store offering the desired product. Customers need only provide a zip code. Integration of physical stores and online operations can also lead to greater efficiencies.  The strategy of the company uses the Internet and took advantage of its capability to reach more clients (Baldwin et al, 2002).     Figure 1 Repeat Customers as a Percentage of Order 1996 to 1999 Furthermore, Amazon strategic intent is to provide more options for their clients by partnering with other international and local suppliers. The company also diversified their offerings to different products, services, categories and other physical assets. Furthermore, based on the given case, the company’s strategic intent is to sustain their competitive advantage by compelling what the needs and demands of their target market and expanding their business portfolio in the global market.  The company’s strategic intent is to do their business in a slow but sure manner by becoming innovative in what they are offering for the customers.             Another strategic intent of Amazon based in case is its goal to be recognised and respected as a global bookstore and online shopping brand and to dominate the global market through their high quality product and service offerings. As discussed in the case study, the advertising and marketing strategy of Amazon have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products.  This is Amazon’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent online shop in different locations, such as in UK and other country, strong brand name and excellent reputation among customers.   Amazon has also been continuing to create affiliate websites to expand their business market among various consumers.   Amazon’s mains resources and capabilities The presence of strong as well as effective leadership in today’s organization imposes a great responsibility to the organization’s team and management networks as leadership implies the overall capacity of the organization’s performance like for instance, in terms of operations and research development.  It can be said that Amazon’s resources and capabilities can be divided in the management of the company specifically their leader which is Bezos, the ability of the management to effectively use strategic supply chain management and aligning it with their business process and information technology, their competitive advantage in the online market, and the financial resources that it gains through its successful approaches. Accordingly, the leader of the company has been able to use appropriate leadership style to solve the issue of the company in dealing with their online clients and consumers.  In addition, it can be said that the transformational leadership approach of their leader as a transformational leader has been able to lead the company. T can be said that successful business organizations need vital leadership as the latter serves as a successful vehicle for the organization’s stability and growth within the global market. Based on the given case, Amazon has been able to use four views of leadership which include the transformation view, power, paradigm shift as well as social responsibility view (Proctor, 2000). However, the CEO of the company has focused on the area of transformation to meet the changing needs of the global market.  Being a transformation leader that he is, the CEO of Amazon (Bezos) has been able to show a visionary value. The management of Amazon has been able to enhance not only the manager’s way of handling and managing their subordinates but most especially the fact that it enhances both the performance of the employee and the organisation as well which is very obvious in Amazon. According to Kim and Weaver (2000), the administration and management of a particular business organization entails full utilization of the resources of the company in order to lead, direct, and control operations to meet the set objectives.  Based on the given case study, it can be said that Amazon has been able to use strategic approach to sustain their competitive advantage. One of the capabilities Amazon is how the leaders of the company do their business.  Guided by their vision and mission, the leader and management of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders.  Another sustainable capability of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages. The ability of the management to diversify and differentiate their business strategy to dominate the global market can also be considered as the major capabilities of the Amazon.   Resources and capabilities that provide sustainable competitive advantage             In accordance with the case study to the business approach and strategies of Amazon it can be said that the company has been able to continue to grow and expand their business in the online market. It can be said that Amazon has been able to use various strategies which enable them to sustain their competitive position in the global market.  Based on the conducted reviewed in the previous section, it can be said that Amazon strategy includes differentiation approach and innovative approach. In doing so, the company has been able to have a sustainable focus on their core business values ensuring that their goals, objectives and mission are achieved.  In addition, the company has been able to sustain good relationship with its target market and all other stakeholders and the company focus itself on satisfying the costumers by providing them quality products and services in the online. The ability of the management to manage their financial resources and limit their expenses to sustain their needs for expansion has also been considered as one of the capabilities that sustain their competitive advantage. The strategies used by the Amazon include Intensive strategy, which aims to competently position and promote their products and services in the online market. The industry has also utilized the Integration strategy and forward integration in order to promote and closely manipulate where all the Amazon products and services are being sold. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company.              Based on the given case, it can be said that the two resources and capabilities of Amazon includes their flexibility and innovation strategy.  It can be said that the ability of the company to expand their business is through their ‘flexibility and innovation’ which enable Amazon to counter the risks of erosion and losing of their competitive advantage.  In order to cope with the various influences and effects of market environment changes, and to sustain their competitive advantage, the management of Amazon has been able to improve and expand its organisation so as to conduct business operations and activities on a global scale which include the expansion of Amazon through the online presence of the brand in different parts of the world and by making specific websites as well as considering merging and acquisitions (See Figure 2). Herein, the management of the company has been able to improve their organization structure its organisational structure to achieve their organisational objectives.  In addition, the improved organisational structure is done in order to initiate speedy and flexible measures in managing their internationally diverse employees. Figure 2 .Aside from this, the management of Amazon has also been able to focus on their research and development department and to initiate innovative strategies designed to provide a competitive advantage and edge in the marketplace. As business gravitates towards a global scale, entrepreneurs find themselves faced with the challenge of producing new and better products at reduced cost and market price. Daft (2003) pointed out that in managing a global environment, managers of Amazon must be characterised by the ability to bring about change through innovation and creativity. Further according to Daft, a revolutionised manager sees change, rather than stability, as the nature of things (2003). Innovation as a ground for doing business in the 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. In addition diversification approach is also considered by Amazon to ensure having sustainable competitive advantage. Part of the diversification is to generate new coffee products that would meet the needs of the consumers in various parts of the world. As discussed, the knowledge of the underlying sources of competitive advantage highlights the abilities and core competencies of Amazon as a world leader in coffee retailing industries. In this regard, the company must be able to determine strategies and ways to ensure that their competitive position and advantage are being sustained in all levels of the organization. Indeed, making a business successful in a particular setting demands crucial and detailed studies and examination of the factors that will generate the best results that will serve the aims and objectives of the company. In this light, owners of big business organizations operating in a competitive business environment should be in constant look out with its competitors and the overall status and events in the industry. Taking advantage of the opportunities and intensifying the strengths while minimizing the risks and weaknesses of a business firm greatly helps in predicting the success in business enterprise Jayne and Dipboye (2004) indicated that in highly differentiated industries intense competition results to more diverse operation systems and processes because the participation among different sectors within and outside the company is needed to gain more economic advantage. Assets, skills, and capabilities available to a particular business organization are pooled together to come up with better business strategies.   Amazon’s Future Strategy It can be said that the Internet provides opportunities for the online companies to develop relationships with suppliers as well as customers. It has been found that the number of competitive moves increased as Internet usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of e-commerce. It can be stated that the most effective Internet strategy for that Amazon can use in the future is a collaborative one with their channel partners.  It can be argued that a mixture of multiple revenue streams that monetizes content/database, uses e-commerce, and cross-sells through multiple channels is the key to success of Amazon. In addition, another future strategy of the company is to use integrated marketing communication to reach more clients in the global market.   Reference 7.0 Reference Bradley, F. (1999). International Marketing Strategy. Hertfordshire: Prentice Hall Europe.   Daft, R. (2003). Management. 6th Ed. Cincinnati, Ohio: Thomson South-Western.   Edell, J. A., & Keller. K. L. (1993). Analysing media interactions: Print reinforcement of television advertising campaigns (Working Paper). Durham, NC: Fuqua School of Business, Duke University.     Hollensen, S. (1998). Global marketing: A Market-Responsive Approach. Hampshire: Prentice Hall. Lowson, R. 2002, Strategic Operations Management: The New Competitive Advantage. New York: Routledge. Papavassilou, N. & Vlasis, S. (1997). Standardization versus adaptation of international advertising strategies: Towards a framework. EJM, 31(7): 504-527.   Peteraf, M (1993). The Cornerstones of Competitive Advantage: The Resource-based View. Strategic Management Journal, 14(2), 37-46.     Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.   Proctor, T 2000, Strategic Marketing: An Introduction, Routledge, London.   Sloman, J. and Sutcliffe, M. (2003). Economics for Business, 2nd Ed. Harlow, England:       Pearson Education Limited.     Williams, J. R. (1992). How Sustainable Is Your Competitive Advantage? California Management Review, Spring, pp. 29-51.           Credit:ivythesis.typepad.com

Sample Amazon.com Case Study

Business Strategy: Amazon Introduction With the advent of the information technology, specifically the internet, it is s...

Focus Groups Sample : Amazon

Introduction In the short space of 25 years something which started as a US defense initiative has developed into the main communications mechanism for the academic and research community and most recently has expanded into a major business tool for the commercial sector. The Internet has evolved during this period from being a robust and effective way of exchanging information to providing a delivery mechanism for massive amounts of multimedia information to a global audience (Stroud 1998). The two Internet applications that have created the most impact on people are e-mail and the World Wide Web (www). E-mail provides a very simple and effective way of sending both simple text messages and computer files to one or a number of recipients. The www enables individuals and organizations to provide a global audience with a full gamut of multimedia information that can be accessed easily (Stroud 1998).   The internet is a connection of network systems from all over the world. It started from a project of the US that intends to gain advantage over the Russian technology. This project created a program that aims to interconnect radar systems in the country. Those responsible in the program saw the potential of interconnecting systems as a unifying factor for human beings located in different places.  After careful studies and advancements in technologies, the internets reach grew wider and wider. Its capacities and capabilities changed and its benefits to people grew more evident. The internet created online businesses like Amazon.com. Background of Amazon.com Amanzon.com Inc. is an online retailer of books, music, videos, toys, electronics, and other products. In addition to selling products over the World Wide Web, Amazon.com administers online auctions for items ranging from postcards to personal property. The company also provides its customers with services, including an Internet-based address book and personal calendar, and a comparison-shopping tool. Amazon.com is based in Seattle, Washington. Amazon.com is recognized as a model in electronic commerce. The company pioneered many of the tools and procedures now commonplace in online retailing. These include order verification and customer service via electronic mail (e-mail), one-click shopping, and customer reviews (Brynjolfsson & Urban 2001).    Amazon.com was also one of the first companies to sacrifice profitability, opting instead to devote its growing revenues to expanding the company’s offerings and presence on the Internet. This strategy was subsequently adopted by Internet start-ups, or dot.coms, in record numbers (Brynjolfsson & Urban 2001). Amazon.com was founded by Jeff Bezos after researching about the success of mail order companies. Bezos believed that book selling can be profitable through its sale by the use of the internet. Amazon.com is one of the first electronic companies to sell products by the internet technology. The company had its first major problem on the collapse of its business but it has recovered since and it has remained profitable.  The paper will focus on the case study on Amazon.com and it intends to answer some questions with the case. Question 1: Amazon.com’s strategic intent Strategic intent concerns the direction in which a business is headed in the long term. If identified simply and succinctly it can have a profound effect on the firm’s stakeholders, both internal and external. Employees know what they are trying to achieve and therefore how they should make their greatest efforts; customers know what the firm’s products and services embody; suppliers understand what the key elements are when dealing with the firm. The strategic intent process facilitates the attacking of horizontal market opportunities that might be missed in a business unit structure (Proctor 2000). Strategic intent needs to be defined with precision and it also needs to be supported by indications of how fast the firm proposes to travel and how far. Thus milestones along the route need to be spelled out and progress at each stage monitored and the people involved rewarded according to progress (Proctor 2000).   Strategic intent discusses the probable next strategic moves of the company and how the company will try to achieve its goals. The strategic intent of Amazon.com was to continue dominating the market through innovations that include: permitting the web developers to incorporate some features of Amazon.com into their website; increased alliances with multinational businesses that want to sell their products through the company’s website; and increase in international sales.   Amazon.com wants to make sure that it continues to have good profit and income rates without sacrificing the quality of its services and the welfare of its personnel. Question 2: Amazon.com’s stakeholders Stakeholder management has become necessary and inevitable as many different groups demand to be recognized and satisfied (Golembiewski 2000).  Stakeholders have much importance in the firm and are treated as an important part of the company. The stakeholders of the Amazon.com include private individuals, the government, the management, clients and creditors. Stakeholders are given the outmost authority in the business. Their powers in Amazon.com are overwhelming because they contributed a certain amount that contributes to the financial resources of the company. Stakeholder’s impact on the governance of the firm is it affects the way the company is managed. It makes sure that the company performs well according to the stake holder’s standards.    The stakeholders check on the company and its performance and they deliver comments or questions during meetings and other public occasions. To make sure that Amazon.com does what is expected of them, stakeholders have representatives in the company. The representatives of the stakeholder in the firm belong to the management group. They make sure that the concerns and problems of the stakeholders are brought to the company’s attention. They are the ones that foresee if the company abides with the changes the stakeholder wants.  The stakeholder has a right be informed about the changes in the economy, each member has the responsibility among themselves to maintain the investment they made in the company.    Question 3: Amazon’s main resources and capabilities Amazon.com’s main resources are the books and other products sold through their website. These products come from businesses they aligned with. A capability of Amazon.com is the extended promotional relationships with established internet players. The company has been working with internet players so that they can make use of each other’s resources to achieve their goals. Through the company’s association with such internet organizations their knowledge and experience in doing business in the internet continue to increase and thus they improve the services they give to the clients.   A capability of the company is the powerful search facility wherein there is a personal notification service to email of clients, a recommendation section, an awards section containing award winning books, and an associate program with other sites. Through the said facility the company gives the client convenience and ease in finding the book they want. It also helps in giving the client some ideas on what to buy. A capability of the company is it having a vast and wide collection of books and products that it gives to the clients.  Through this the company provides different choices for the clients. The client doesn’t have to go to other sites to find the products they need. This increase the profitability and status of the company. A capability of the company is the popularity it has. The company is one of the known websites that offer such services. When people look for books or other products they remember the site as one of the most reliable and trusted. Question 4: Resource and capability that gives competitive advantage It is the unique architecture of each operations strategy that provides an essential strategic contribution to achieve sustainable competitive advantage. From this people can speculate that organizations will have not one, but many operations strategies. Each may have common components, but each has a unique and individual emphasis that is dictated by a number of factors such as trading partners, supply system configuration and demand behaviors. The building blocks of an operations strategy can be viewed as forming a composition matrix that fuses them together as a reaction to the demand and supply system circumstances (Lowson 2002).  The unique architecture that is formed is in some degree individual to each strategy, business and sector and provides strategic impact and competitive advantage due to its emphasis upon particular performance factors (Lowson 2002).   The development over time of the concept of sustainable competitive advantage is one of the main reasons why the concept of strategic management has evolved into its recent state. Too often scholars of strategic management believe that competitive advantage can be gained merely by analyzing value creation and advice firms to maximize the value created for the customers. Although both competitiveness and shareholder value are typically measured in economic terms, there has been considerable argument regarding whether either should be the key to managing a firm. Typically, management is said to have to do with the fact that shareholders focus on short-term profits, while competitive advantage and strategic management should focus on long-term profitability of the firm (Drejer 2002). The more competitive firm has one or more core competencies that it can use to create value for its customers and/or achieve lower internal costs, thereby creating overall competitive advantage relative to its competitors. This measure of competitiveness is not an operational measure and should not be taken as such. However, it does focus attention on two different issues that must be seen in connection in strategic management: the position enjoyed by the firm and the internal competencies of the firm, which together form the basis for judging the competitive advantage of the firm (Drejer 2002).   Competitive advantage can be acquired by a company through proper implementation of strategy and a god relationship with the internal and external environment. A resource and capability of Amazon.com that gives sustainable competitive advantage is the vast and wide collection of books and products that it offers to the clients.  Such resource and capability is the main reason why clients visit their site and it makes them unique in the industry. Their collection is so diverse that clients will not have a difficult time finding for a certain product, this gives Amazon.com a sustainable competitive advantage. Another capability of Amazon.com that gives sustainable advantage is the powerful search facility wherein there is a personal notification service to email of clients, a recommendation section, an awards section containing award winning books, and an associate program with other sites. This capability differentiates Amazon.com from their competitors. Question 5: Amazon.com’s future strategy Amazon.com’s future is a bright one but to make sure nothing disastrous happens the company needs to make use of strategic moves. The strategic move will help in furthering the growth of the company and it will make sure that future problems can be easily solve. A strategic move by the company will be improving the website it has. This should be a strategic move by the company because they need to keep up with changes in society.  Redesigning the website to a better look can boost the company’s sale. Making it more user friendly and attractable to consumers can invite more clients to view the website and see the products the company offers.   A strategic move by the company will be creating more mergers with non competitors. This should be a strategic move by the company because through it the company can make use of the capacity of non competitors for its benefits. Through the said move both companies will acquire benefits and both can promote the products they have through each other’s promotion techniques. Lastly a strategic move by Amazon.com is improving the capabilities of their employees and strengthening the services rendered by the employees. This might be a strategic move by the company because improvement of the employees means better service; better service means more clients, and more clients’ means reaching their goal and objectives.  The company should strengthen the internet knowledge of the employees so that any new technological problems can be solved immediately. References Brynjolfsson, E & Urban, GL (eds.) 2001, Strategies for E- business success, Jossey-Bass, San Francisco.   Cummings, S & Wilson, D 2003, Images of strategy, Blackwell Publishing.   Drejer, A 2002, Strategic management and core competencies: theory and application, Quorum Books, Westport, CT.   Ferguson, PR & Ferguson, GJ 2000, Organizations – A strategic perspective, Macmillan Press Ltd.   Golembiewski, RT (ed.) 2000, Handbook of organizational consultation, Marcel Dekker, New York.     Lowson, RH 2002, Strategic operations management: the new competitive advantage, Routledge, New York.   Proctor, T 2000, Strategic marketing: An introduction, Routledge, London.   Stroud, D 1998, Internet strategies: a corporate guide to exploiting the internet, Macmillan, Basingstoke, England.     Credit:ivythesis.typepad.com

Focus Groups Sample : Amazon

Introduction In the short space of 25 years something which started as a US defense initiative has developed into the main communications...

IS Management

TASK 1: E-COMMERCE   Introduction             The existence of information technology has been one of the major factors for enhancing many business performances. As part of this technological advancement is the integration of internet, specifically e-commerce as part of business operations. E-commerce or e-business is a business process in which goods and services can be seen via the internet or other computer networks.  The term e-commerce also known as electronic commerce is considered to be a new hub in doing business where provides a great deal of convenience not only to customers but also the company since it minimize cost (2001). With the aid of telecommunication, internet and information technology it really is a sure way of reaching target audience and an effective tool in conducting business. The domains of e-commerce encompasses all business-to-business (B-to-B) and business-to-customer (B-to-C) transactions that engages the buying and selling of goods and services through an innovative medium of communication.  E-commerce follows the same basic principles as traditional commerce that is, buyers and sellers come together to exchange goods for money. But rather than conducting business in the traditional way in stores and other brick and mortar buildings or through mail order catalogues and telephone operators in e-commerce buyers and sellers transact business over networked computers. In addition E-commerce offers buyers convenience and satisfaction. They can visit the World Wide Web sites of multiple vendors and companies 24 hours a day and seven days a week to compare prices and make purchases, without having to leave their homes or offices ( 2001). In addition, it helps the customers to see the description of the products. In some cases, consumers can immediately obtain a product or service, such as an electronic book, a music file, or computer software, by downloading it over the Internet. For companies which use this kind of technology, e-commerce offers a way to cut costs and expand their markets. They do not need to build, staff, or maintain a store or print and distribute mail order catalogues. Automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded, e-commerce firms have no distribution costs. Because they sell over the global Internet, sellers have the potential to market their products or services globally and are not limited by the physical location of a store (2000). Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs. Primarily, the goal of this paper is to analyse the e-commerce business models, furthermore, the paper will also attempt to assess what e-commerce business models used by HSBC.   E-Commerce Business Models             The use of e-commerce actually originated from the development of various information and communication technologies (ICT). Generally, ICT is made up of innovations, gadgets and instruments that are based on technology; these enable users to improve their operations, products and services. Some concrete examples of these technologies include computer systems, internet and wireless communication. Before it was used to improve organizations business performance, e-commerce was able to provide several advantages to different fields. One of which is the business sector. In all types of business, innovation and expertise are two of the important elements to be considered. In particular, information and communication technology (ICT) through e-commerce encourages companies to become competitive by means of expanding their markets, attracting and retaining customers through tailored services and products as well as restructuring their current business strategies. This in turn affects the business industry by transforming internal processes and external relationships (2001; 1998).             There are several business industries that have already realized the significant role e-commerce has in their operations. For instance, in the manufacturing sector, e-commerce has been utilized by several companies in order to improve their supply chain operations. Presently, various information systems are made available to business owners, from less-sophisticated to more advanced systems for this purpose. In particular, internet utilization facilitated the ease of interaction between e-commerce business models. These include business and business partners (B2B) and consumers (B2C). Through the internet, online deliveries, information searches as well as mass customization are all made available to the customers. Manufacturers, suppliers and distributors on the other hand, benefit from internet utilization through well-coordinated information sharing. Online auctions are even made possible with this breakthrough (2000).              B2b is one of the categories of e-commerce that has been characterized as profit-oriented whose aims is to obtain information and retain information that uses different type of motivation in which it has a shorter route of channel in terms of distribution.  In b2b it seeks to realize transactions that necessitate performed financial and commercial activities via the internet.  Among b2b’s typical applications are e-procurement and e-marketplace.  A very good example of b2b marketing online is the website from Volvo Construction Equipment.  The website once visited, is loaded with the convincing benefits and the catching words that surely can caught buyers attention. Among its advantages is that it promotes automatic communications between companies that hastens the business dealings.  The b2b business dealings is proves to be higher in volume and less cash-driven in such a way that it saves time and expenditure of resources since most of the time the delivery charges is already covered in the whole package if a company transacts in a b2b marketing (2000).  Further, it allows cutting prices dramatically abrupt since an economic equilibrium point represents a compromise done deal by the buyer and seller.  Similarly, on one hand, buyers have pricing options that is vast while on one hand, the sellers have a large marketplace for bidding to occur. It even minimizes opportunistic behaviors of some businesses that exploit such opportunity since the spreading of information is faster.  The evolution of the business to consumer marketplace has been regarded as fast and furious. Most business-to-consumer developments have centred on consumer products and services, the products and services most affected by price and convenience as purchase factors. The most successful brands have developed in a seemingly haphazard way. Many Internet start-ups moved into an industry with little concern for traditional brick-and-mortar stores and grabbed the spotlight. Others built niche positions by creating tools and value for consumers searching for deals on the Internet. The current state of the market is both booming and confusing. The organizations that waited to see whether the Internet was merely a passing fad have either been fired or retired from the business. The rest of the world has awoken to new challenges for the speed and environments in which they must work. Determining how to meet these challenges has created reactions ranging from mild concern to outright terror. Clearly there is a difference between deciding what to buy and actually buying on the Internet. Studies continue to confirm that consumers are out there making decisions about what they want to buy using the Web as a sophisticated research tool, but many are often still buying via traditional stores. In many cases it is difficult for consumers to acquire a product locally; in other cases the distribution channel has not yet given up on the retail end of its pipeline. As a result, the cries of disintermediation in the marketplace have turned out to be false (2000).  This situation is a function of which products consumers can find on the Internet and whether they sense they are getting a good deal. The basics of developing business-to-consumer e-commerce are fairly simple in terms of stages in the marketplace: build a community of visitors, give them relevant information about their area of interest, present products or services links to shopping areas which support such interest, allow the consumer to make some comparisons in terms of price and delivery to enable the sales process to evolve and take the order and provide satisfaction and fulfilment.   Hong Kong Shanghai Banking Corporation Holdings HSBC Holdings, a British financial holding company with origins in Hong Kong and Shanghai, where offices were opened in 1865 under a special charter which allowed Hong Kong rather than London as a headquarter location. The bank remained an eastern force until the 1950s, when overexposure to the crown colony and its textile industry pointed to a need for geographical diversification. A worldwide scan was made with rather disappointing results. Australia and Canada was protectionist and so was the Continent, in addition to being over-regulated and well served by its own talent. Central West Africa was saturated by British banks and, after independence; the new countries gave priority to domestic banks. Only the USA was attractive because it offered dollar assets in a dollar-hungry world (2003). But before anything could be done about it, events elsewhere called attention. HSBC was in intense competition all over Asia with Chase Manhattan which showed interest in a small bank in India and Malaysia. HSBC pre-empted by purchasing the bank in 1959. In the same year another defensive acquisition became necessary, when an investor group tried to buy the British Bank of the Middle East, strip its assets and sell the branches to HSBC, which did the bulk of its Middle East business through the bank. For example, Kuwaiti authorities kept half of their money there. With the purchase came a chain of retail branches in Cyprus. A few years later a banking crisis erupted in Hong Kong. HSBC was not seriously affected but Hang Seng Bank, the colony’s second largest, was about to flounder in a run. Chase offered help but Hang Seng preferred HSBC, because of its local roots, and sold it a majority stake in 1965. These three deals illuminate the difference between corporate strategy and the realities of the marketplace (1991). Diversification had taken a beating although it was only in 2000 when acquisitions in Asia became topical again, in a small way. Two of them were part of the private banking drive, PCIB Savings Bank in the Manila area and Taiwan’s leading asset manager China Securities Investment Trust Corp. in 2001, to be followed by an 8 per cent stake in the Bank of Shanghai. HSBC had returned to its roots. Afterwards many more events unfolded including the turnover of Hong Kong to china this prompted HSBC to transfer headquarters to United Kingdom (2003). In this, in order to stay competitive HSBC sees the Internet as one of several exciting media, to be incorporated as an integral part of its business.  In this manner, HSBC has made its own website and use business-to-business as its e-commerce models. The bank has concluded that B2B change the fabric of the financial services sector. In addition, through B2B the bank has been able to reach millions of customers online. B2B also enables the company to enhance its services to existing customers. The use e-commerce B2B model helps the company to reorganize the business so as to provide higher-quality customer services more efficiently. Herein, HSBC are able to link its customers to the full range of international services and manage their processing wherever it chooses, which the bank sees as a considerable competitive advantage( 2002). HSBC has adopted a clicks and mortar strategy. This requires that customer Internet offerings must meet three criteria: customer needs and preferences come first; they must fit HSBC’s existing distribution channels; and they must be multinational in scope. HSBC aspires to be one of the first to provide customers with facilities through the Internet on a multi-geographical and multi-product, basis ( 2002).   Conclusion The e-commerce business model used by HSBC provides different benefits to the company. These benefits include competitive advantage against competitors, achievement of the company’s goal, better service given to the customers, and increase profits for the company.  Through the system the company can make an effective management system and an appropriate e-business technology can be used to transact with online customers. Through the e-commerce the company does well in its field thus the goal it has can be closer to being reached. The computer based system helped the company in giving better service to the clients. The system improved how service was given to the clients; it created measures that changed the meaning of serving the clients. For now, e-commerce has earned its reputation as an effective means of new marketing strategies, convenience to the consumers and an alternative for business to minimize cost in business transactions.   TASK 2: Amazon.com   1.        How would you define Amazon.com’s business model throughout the 1995–2006 period examined and how has this changed and evolved? Answer:             Amazon has the first mover advantage in online bookselling industry.  In the onset of 2004, it is named to be number one in on-line service, has six website servers, 32 million customers in 150 countries, 900,000 associate programmes linking up or having contents of Amazon. Amazon.com is an on line retailer of books and was established as a micro enterprise in the United States during 1994. It is among the most south-after online product/service provider. The company has applied the disruptive technology because of the fact that it has rapid expansion in the aspects of its operations such as business turnover and a spectacular rise in share value since public floatation in 1997 (2003). Moreover, Amazon.com is essentially an information broker and sells through the use of on line process. It is a disruptive technology since it holds a small, though increasing and inventory and that outsourced most of the aspects of its operations. The company can best manage a disruptive innovation as well as technology by means of an active communication channel between the alliances and partnerships with their respected publishers as well as other on-line retailers and technology providers as a strategic notion. Even though there are a couple of online bookstores that emerged before Amazon.com, it holds the distinction among the first major pioneers in American as well as worldwide online retailing. Today, the ambition of Amazon.com is to amicably become a premier online retailer through leveraging on its brand and model in business. For the past years (1995-2006), the company has been able to use a business model that outgrows the company’s competitors. The business model used by Amazon for the past years adheres to the technological advancement, particularly in the internet. The company used e-commerce business models as a major strategy for their business operations. Through this, consumers are more inclined to trust Amazon.com than other companies. The business model implemented within Amazon provides the company an edge compared to those competitors in the online business. As part of the business model used by the company through out the years, is their involvement on the so-called the four-activity type in marketing operations. Proven and tested, it excels and competent enough in such activity-types. The ultimate proof on this claim is the fact that it considered to be one of the best e-retailers in the world.  (2001) believes that it is more difficult to classify as online retailer because of utilising generic marketing strategy type. Amazon.com do have low prices and with lots of discounts being offered to their consumers. The management has been very innovative in coming up with various strategies that reinforces their strong and obvious market standing. According to Merrilees (2001) the constant creation of innovation continues. This includes site development on specific aspects, extension of coverage into other retail categories, and a trial to venture on a unique yet related line of service/product offer such as CDs. Accordingly, they have also been innovative in nurturing alliances with other online booksellers (Merrilees 2001). Their perfect usage of branding served as one of their distinguishing features. Branding is considered to be very important because it helps in the attraction and retention of potential consumers. Since they are one of the world’s best-known e-brands, it is expected that their market coverage will continue to flourish. Meanwhile, another strength that the company possesses is that their stocks reach to approximately 10,000 items of various sizes. With its users numbering to millions, transacting everyday, pooling their items for sale, it offers a wide array of choices. This will ensure the consumers that if they have problems with the products that they have ordered the company will surely replace it with newer and better ones. Also, it will assure the consumers that the products they ordered will reach the destination in time depending on the geographic situation. Amazon.com is also adept in their channel management. It is very important to maintain a good channel management because customization and personalization of their site are among their trademarks. Though the “Hello [Name]” welcome is popular to almost all online retailing services, they are one of the first companies who have that familiar greeting when the customer revisits. Additionally, the site contains a personalized customer profiles that are generated to offer assistance in book selection. The superior channel management strategies of Amazon.com are completely supported by appropriate capabilities by the people involved in the overall management. They also have a “prompt delivery within the USA”. This vital mechanism is mandatory since “the entire site was designed on a basic five-step process that was meant to make the consumer shopping experience convenient and helpful” (Merriless 2001). To further reinforce the increasing demand for speedy delivery within the USA, they have built additional warehouses and built up excellent alliances with suppliers. Through a B2C e-business, which deals with business to customer connection unlike B2B (to be discussed later), the company will be able to serve customers efficiently and simultaneously. There is a term called “disintermediation”, which means that the selling skipped the usual channels, and the product or service was retailed directly to the customer instead of going through a middleman. By browsing a specially designed e-business site, a customer will find inquiring about products, ordering, and payment transactions are so much easier, faster, and more convenient since they could do it without even leaving their offices/homes. The sustainable competitive advantage of Amazon.com is primarily related to superior relationship in marketing and through the effective use of its e-commerce business model. The Amazon.com experience highlights the dynamic nature of competitive strategy. That is why it seeks to provide and adapt to new marketing environments, as well as developing their own growth trajectory. Pioneer firms in particular are likely to enter markets with an innovative strategy, but this can evolve into some other generic strategy as conditions change.     2.        Has it entered the harvest stage that CEO Jeff Bezos promised would eventuate? Answer             With the business model used by the company and with the innovative strategies implemented within Amazon.com by the CEO and the rest of the management of the industry, it can be said that Amazon.com now has been able to enter its harvest stage. Some of the factors that allow the company to meet the goal of its CEO Jeff Bezos include the ability of the company to reduce business cycle time. Before marketing or selling the product, the first consideration is producing the goods. It can’t be denied that personnel responsible for locating the right product and the right supplier that’s best suited for the requirements of the company, takes a long time to accomplish this task. Amazon has high ability to generate internal funds as showed by its cash equivalent of 3M in 2001 to 2M in 2002 most possibly from cost cutting activities that includes downsizing and inefficient distribution/ warehouse closures.  However, it also has also invested to partnerships in Dell and other auction houses that could result to gains for the company although its borrowing capacity through public offering seems sub-optimal primarily because of the uncertainty of technological advancements that makes shareholders key financer of Amazon’s innovation and acquisition endeavours.  In relation to financial resources, patents and stock of technology not only gives the firm 20% share of web development from total revenues (additional internal fund generation) but also competitive advantage of one-click technology from Apple to back-up its browsing and searching convenience promise to customers.             The best thing about innovation culture in the firm is that the founder CEO Jeff Bezos maintains and flames it.  Thus, the process of keeping the learning- curve even at rough times and stock price falls created a reputation of customer-focused innovation to increase convenience protected in its 8-year existence, rooted in its 1995 infancy and stored in the heart of the CEO since his 14th birthday.  The innovation culture is enhanced by recruiting top executives who have thorough experience and knowledge in areas of supply chain management, logistics and international relations to support geographic expansion of markets in Canada, Japan and France wherein 2003 figures showed 37% share on revenues of countries outside North America.   3.        Is Amazon.com a natural acquisition target for Wal-Mart? Answer With the potentials of Amazon.com, it can be assumed that the company can be considered as a natural acquisition target for Wal-Mart. Through its management strategy and e-business strategy, Wal-Mart may gain many advantage in acquiring Amazon.com. As mentioned, e-business supports easy procurement queries based on search criteria. When an e-catalogue system is employed by the company, this would mean a probable volume of orders, but can it all be handled all at once which may be needed by Wal-Mart. Accordingly, Amazon Company may become Wal-Mart’s e-business supplier and Wal-Mart in return would gain access to the e-tailer’s expertise in handling an internet operation from online ordering to home delivery. E-business supports easy handling of large number of orders through automated customer info/orders retrieval into online database and being the largest retailing industry, this strong point is needed by Wal-Mart.  Furthermore, E-business supports a lot of EDI functions that transform the business processes into paperless operation, which speeds up business process without sacrificing accuracy, reliability and efficiency. E-Business is large and speedy using Internet as the main infrastructure ( 2002) and the Wal-Mart is aware of the advantages of this. In lieu to publishing, Amazon.com potential as an effective medium to connect Wal-Mart from its target market through online networks provided by Amazon. With this, the customers of Wal-Mart will be ensures of the Reliability, flexibility and convenience offered by online vendors like Amazon. Convenience rather than low prices is the most critical need of consumers in the new world of e-marketing and the more that the e-marketing strategies reflect this, the more successful they are likely to be (2001).     4.        Is the Amazon.com business model, the right model looking ahead 5 or more years? Amazon.com is currently one of the best in its industry. The company can maintain such status by improving the website it has and through the e-commerce business model that it uses and implemented within the industry. With the business model used by the company, Amazon has been able to gain competitive advantages among its rivals. Among the competitive advantages enjoyed by Amazon.com includes economies of scale and scope in manufacturing and research and development arising from its numerous facilities situated in the United States and other countries worldwide. It shows that the e-commerce business models implemented by Amazon has helped the company to become the most largest and strong competitor in the online market. In addition, the business model used by the company has helped Amazon to gain customer trust and loyalty by making sure that they always provide the demands of their target market. Through the business model, Amazon is able to customise their products and services to the needs of their customers so as to meet the organizational goal of satisfying them. The e-business model used by the company also helps Amazon to meet the objective of the organization as well as their mission and vision. Amazon.com perfected the application of the dual generic marketing strategy – the combination of branding and channel management through the business model that it utilised. These strategies helped them to be in an extremely strong position worldwide in connection to the line of the industry they belong. It was also shown that they support their market position with high performing, relevant capabilities, such as communication and technology.  Hence, it can be concluded that Amazon.com’s strategy or choice of e-business model is the right model for the company in order to stay in the competition in the online market and to be recognised as the leading online business in the world. This model can be regarded as the foundation of the success of Amazon.com in the business world.     Credit:ivythesis.typepad.com

IS Management

TASK 1: E-COMMERCE Introduction The existence of information technology has been one of the major factors for enhancing man...