BUSINESS STRATEGIES:
Amazon is such a successful company because of the fact that it truly represents two of the three generic business strategies very well. Amazon is known for its competitive prices. Amazon sells their products for less money than their competitors. They focus on their overall cost leadership strategy. Amazon sells their products at a retail price, which usually is a much lower price then their competitors' prices. Amazon also has a very wide range of merchandise and products. This helps to fulfill the needs of anyone who wishes to use Amazon's website. Amazon offers competitive prices to customers, by putting a lot of effort into connecting with wholesalers in order to be able to offer the lowest price to a customer. Despite the low price that they offer, Amazon makes sure that the product is the same quality as any other product. Amazon also uses the business strategy of focusing on their customers. Their "focus" is helping, and more importantly interacting with their customers, by becoming familiar with their likes and d
islikes, and learning about their customers needs. It provides high customer service, contains easy searches, has e-mail confirmation, and always adds useful information related to product being bought. It also provides a safe and reliable payment system to the customer. All of these contributing factors help the customer to feel comfortable and satisfied, which makes them in the long run return to the website and purchase more.
PORTER'S FIVE FORCES:
Porter’s Five Forces Model include buyer power, supplier power, threat of substitute products or services, threat of new entrants, and lastly rivalry among existing competitors. These forces help businesses understand the relative attractiveness of an industry and the industry’s competitive pressures. Amazon.com’s strongest force is that of having low threat of substitute products or services. Buyer power is higher when buyers have many choices from whom to buy, and low when their choices are few. Supplier power is higher when buyers have few choices from whom to buy, and low when their choices are many. Therefore, Amazon’s main objective is to increase their supplier power, thus reducing their buyer power. Businesses with many alternatives to a product or service will have high threat of substitute products or services. Threat is much lower when there are much fewer alternatives to choose from. An organization is most profitable when they are the supplier in a market with few substitutes for the products or services they offer. Amazons’ success is due to the fact that they do exactly that. Threat of new entrants will be higher when it is easy for competitors to enter a market, and rather low when there are significant entry barriers to entering a specific market. Porter’s final force is the rivalry among existing competitors. Rivalry is higher when competition is fierce in a market and lower when competition happens to be more complacent. Porter’s Five Force Model is most advantageous in helping you to better understand the positioning of your organization within its industry.
Amazon.com has drastically reduced their buyer power by creating a competitive advantage by making it more attractive for customers to buy from them then from their competition. Amazon is known to have some of the cheapest prices placed on highly wanted goods. In recent years, online textbook purchases have skyrocketed. This is mainly due to Amazon offering some of the cheapest priced options, in which consumer’s value much more than what most competition may even try to offer. Over time as you purchase from Amazon, a unique profile is developed with your shopping and purchasing habits through their collaborative filtering technique. When you return to Amazon, products are offered to you that have been tailored to your needs. If you further choose to do your online shopping elsewhere, Amazon’s switching cost comes full circle. They reduced their threat of substitute services, in a market of many substitutes by tailoring offerings personally to you as the consumer making customers reluctant to switch to another product supplier.
MAJOR BUSINESS INITIATIVES:
Everyone knows that Amazon is the worlds largest and most successful on line retail establishment. The major business initiative that is being used by Amazon is supply chain management. Through software providers such as Microsoft and SAP, Amazon has the ability to make amazing transactions. The inventory that Amazon sells such as books, toys and games sits on shelves in the many different warehouses that Amazon has across the nation, until; through supply chain management, and advanced computers, the product reaches the buyer. Since supply chain management focuses on squeezing every penny out of the supply chain process, this can be described as bottom line initiative.
It is clearly stated which IT organization is used within Amazon, but it is most likely that Amazon uses a Matrix approach, which is having a separate IT department or function, but the goal is to maintain IT personnel within the IT department but matrix them across the other functions, such as budgeting, project management, marketing, and finance. Through a decentralized philosophical approach, Amazon empowers employees throughout the organization to try new and emerging technologies.
E-COMMERCE:
Electronic commerce, is commerce, but it is commerce accelerated and
enhanced by IT, in particular the Internet. E-commerce enables customers, consumers, and companies to form powerful new relationships that would not be possible without the enabling technologies. The kind of e-commerce that Amazon uses is the selling of products such as books, movies, music, clothing, computers, consumer electronics, health and beauty products, and home and garden products.
INTERNET BUSINESS MODELS:
Amazon primarily uses a business to consumer Internet business model, which occurs when a business sells products or services to customers who are primarily individuals. Amazon, is one of the most well known business to consumer businesses out of hundreds of other e-commerce businesses selling books, movies, music, clothing, computers, consumer electronics, health and beauty products, and home and garden products.
MARKETING MIX:
The marketing mix deals with the way in which a business pursues marketing objectives to reach consumers. There are four parts of the marketing mix. The first is advertising, where the company markets their company to consumers by using online ads, such as pop ups or banners. The second part is viral marketing which passed around by word of mouth. It usually travels from one person to another through communication between customers. The third part is registering with search engines, such as Google or Yahoo. Lastly, the fourth part of the marketing mix is affiliate programs, which is an arrangement made between two E-commerce sites that directs viewers from one to another. Amazon uses advertising by having pop ups come up, as well as viral marketing. People enjoy using Amazon's easy to use, and very cost efficient website, which allows the customers to tell others to check their website out also. By word of mouth people become familiar with Amazon and they start to purchase things from them. Also, they are registered with search engines as well, such as Google. So if someone is looking for something and Amazon has it, when they type it in to Google, Amazons website will appear.
PAYMENT SYSTEMS:
There are different types of payment systems in E-Commerce. They consist of smart cards, financial cybermediary, electronic check, digital wallet, and EBPP. The smart card cont
ains a embedded chip, such as the American Express Blue card. It is much more advanced than a credit card.
Paypal is an example of financial cybermediary payment. Electronic checking is sending money from your checking or savings account to another persons. EBBP sends bills over the Internet and provides an easy-to-use mechanism to pay them. All of these methods are very efficient and help to make the paying process very easy. Amazon uses the digital wallet system. It provides security for transactions. It also saves the information that the customer puts in the first time, so they don't have to keep typing it in and be hassled by it. Customers can pay using the same log in information, shipping address, and payment information they already have on file with Amazon. This process allows the customers to feel secure and comfortable with paying for their goods that they are purchasing. It is an easy and quick way to pay for the goods, and it is very convenient.
Summary of article on E-books
islikes, and learning about their customers needs. It provides high customer service, contains easy searches, has e-mail confirmation, and always adds useful information related to product being bought. It also provides a safe and reliable payment system to the customer. All of these contributing factors help the customer to feel comfortable and satisfied, which makes them in the long run return to the website and purchase more.PORTER'S FIVE FORCES:
Porter’s Five Forces Model include buyer power, supplier power, threat of substitute products or services, threat of new entrants, and lastly rivalry among existing competitors. These forces help businesses understand the relative attractiveness of an industry and the industry’s competitive pressures. Amazon.com’s strongest force is that of having low threat of substitute products or services. Buyer power is higher when buyers have many choices from whom to buy, and low when their choices are few. Supplier power is higher when buyers have few choices from whom to buy, and low when their choices are many. Therefore, Amazon’s main objective is to increase their supplier power, thus reducing their buyer power. Businesses with many alternatives to a product or service will have high threat of substitute products or services. Threat is much lower when there are much fewer alternatives to choose from. An organization is most profitable when they are the supplier in a market with few substitutes for the products or services they offer. Amazons’ success is due to the fact that they do exactly that. Threat of new entrants will be higher when it is easy for competitors to enter a market, and rather low when there are significant entry barriers to entering a specific market. Porter’s final force is the rivalry among existing competitors. Rivalry is higher when competition is fierce in a market and lower when competition happens to be more complacent. Porter’s Five Force Model is most advantageous in helping you to better understand the positioning of your organization within its industry.
Amazon.com has drastically reduced their buyer power by creating a competitive advantage by making it more attractive for customers to buy from them then from their competition. Amazon is known to have some of the cheapest prices placed on highly wanted goods. In recent years, online textbook purchases have skyrocketed. This is mainly due to Amazon offering some of the cheapest priced options, in which consumer’s value much more than what most competition may even try to offer. Over time as you purchase from Amazon, a unique profile is developed with your shopping and purchasing habits through their collaborative filtering technique. When you return to Amazon, products are offered to you that have been tailored to your needs. If you further choose to do your online shopping elsewhere, Amazon’s switching cost comes full circle. They reduced their threat of substitute services, in a market of many substitutes by tailoring offerings personally to you as the consumer making customers reluctant to switch to another product supplier.
MAJOR BUSINESS INITIATIVES:
Everyone knows that Amazon is the worlds largest and most successful on line retail establishment. The major business initiative that is being used by Amazon is supply chain management. Through software providers such as Microsoft and SAP, Amazon has the ability to make amazing transactions. The inventory that Amazon sells such as books, toys and games sits on shelves in the many different warehouses that Amazon has across the nation, until; through supply chain management, and advanced computers, the product reaches the buyer. Since supply chain management focuses on squeezing every penny out of the supply chain process, this can be described as bottom line initiative.
It is clearly stated which IT organization is used within Amazon, but it is most likely that Amazon uses a Matrix approach, which is having a separate IT department or function, but the goal is to maintain IT personnel within the IT department but matrix them across the other functions, such as budgeting, project management, marketing, and finance. Through a decentralized philosophical approach, Amazon empowers employees throughout the organization to try new and emerging technologies.
E-COMMERCE:
Electronic commerce, is commerce, but it is commerce accelerated and
enhanced by IT, in particular the Internet. E-commerce enables customers, consumers, and companies to form powerful new relationships that would not be possible without the enabling technologies. The kind of e-commerce that Amazon uses is the selling of products such as books, movies, music, clothing, computers, consumer electronics, health and beauty products, and home and garden products.INTERNET BUSINESS MODELS:
Amazon primarily uses a business to consumer Internet business model, which occurs when a business sells products or services to customers who are primarily individuals. Amazon, is one of the most well known business to consumer businesses out of hundreds of other e-commerce businesses selling books, movies, music, clothing, computers, consumer electronics, health and beauty products, and home and garden products.
MARKETING MIX:
The marketing mix deals with the way in which a business pursues marketing objectives to reach consumers. There are four parts of the marketing mix. The first is advertising, where the company markets their company to consumers by using online ads, such as pop ups or banners. The second part is viral marketing which passed around by word of mouth. It usually travels from one person to another through communication between customers. The third part is registering with search engines, such as Google or Yahoo. Lastly, the fourth part of the marketing mix is affiliate programs, which is an arrangement made between two E-commerce sites that directs viewers from one to another. Amazon uses advertising by having pop ups come up, as well as viral marketing. People enjoy using Amazon's easy to use, and very cost efficient website, which allows the customers to tell others to check their website out also. By word of mouth people become familiar with Amazon and they start to purchase things from them. Also, they are registered with search engines as well, such as Google. So if someone is looking for something and Amazon has it, when they type it in to Google, Amazons website will appear.
PAYMENT SYSTEMS:
There are different types of payment systems in E-Commerce. They consist of smart cards, financial cybermediary, electronic check, digital wallet, and EBPP. The smart card cont
ains a embedded chip, such as the American Express Blue card. It is much more advanced than a credit card. Paypal is an example of financial cybermediary payment. Electronic checking is sending money from your checking or savings account to another persons. EBBP sends bills over the Internet and provides an easy-to-use mechanism to pay them. All of these methods are very efficient and help to make the paying process very easy. Amazon uses the digital wallet system. It provides security for transactions. It also saves the information that the customer puts in the first time, so they don't have to keep typing it in and be hassled by it. Customers can pay using the same log in information, shipping address, and payment information they already have on file with Amazon. This process allows the customers to feel secure and comfortable with paying for their goods that they are purchasing. It is an easy and quick way to pay for the goods, and it is very convenient.
Amazon will now begin selling e-books for apple buyers to read on their iPhone and iPod Touch screens. These apple devices can download a free aplication of the service, which is a kindle for the iphone and the ipod touch from the apple store online. The software will give them access to 240,000 e-books on amazons website. Amazon just started shipping out the updated verison of the kindle reading device. This signals the comany to be more interested in being the top retailer of e-books than in the top manafacturer for reading devices. He said for apple users that if using this on the iphone might have them buy the kindle in the long run since it has better battery life and a better suited screen for reading. Amazon will create bookmarks on the e-books so that a user can stop reading a book on one device and pick it up on another at the same spot that you left off. This is a great thing for amazon to do with apple and it will work in the long run for both companies.
http://www.nytimes.com/2009/03/04/technology/04kindle.html?_r=1&scp=2&sq=Amazon&st=cse
