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Amazon's eBusiness Model
Assessing the Potential of Amazon.com's E-Business Model
Amazon.com continues to expand well beyond the boundaries of its initial business model that focused only on books to today including merchandise, suppliers for businesses, and consumables. The common thread that unifies all of these elements together however is the unique customer experience that Amazon.com strives to deliver, all in the context of responsive service (Pine, Gilmore, 2008, et.al.). For Amazon.com to successfully expand into entirely new markets it must stay focused on and continually committed to its customer-driven innovation, which over time has become part of its brand (Crosby, Masland, 2009, et.al.). The intent of this analysis is to evaluate whether or not Amazon lost part of its identity by expanding into markets beyond books, and recommend how Amazon can continue to protect its brand as well. Recommendations for Barnes & Nobile and Borders are also included based on the analysis completed in Appendix A which includes a Website Comparison Table. Finally, the multichannel strategies of Dell are used as the basis for evaluating if Amazon should move into a distribution-centric business model with retail locations as well.
Assessing if Amazon's Product Strategies are an Asset or Liability
After reading the latest Amazon.com annual report and analyzing their series of filings with the Securities & Exchange (SEC) Commission, the breadth and depth of options available to Amazon.com are daunting. It is evident after reading over these material that the company sees itself as an enabler of commerce and computing platforms first, an online retailer second. Amazon's strategic focus is not on products, but on processes, and how to monetize those processes into profitable online services and programs including Amazon Web Services (Feigenbaum, Parkes, Pennock, 2009, pp. 70-71). From...
7, 23, 24, 27).
The proliferation of products and the acquisition of Zappos, a leader in online retailing of shoes are seen more as a means to fully use the platforms in place already for managing a multitude of categories, less about entering a given market. With a stable platform for managing many different types of products, support and service requirements, Amazon can easily scale from one product or service to another. As a result, the expanding into different markets well beyond books does not dilute their brand or identity. Paradoxically it shows that Amazon has exceptional control over e-commerce processes it relies on.
Amazon.com Online Brand Implications
From the initial launch of their personalization technology and through the decades of fine-tuning of their reputation management systems, the Amazon brand has been more focused on a unique online experience, less about having product mix dictate their identity (Wang, Doong, Foxall, 2010, et.al.). The Amazon.com brand is defined by the experiences customers have over time and less on price (Pine, Gilmore, 2008, et.al.). By concentrating on excelling at process and online reputation systems, Amazon has created a unique and trusted experience on their sites. This trust has created greater customer loyalty than any of the other online book retailers and serves as the catalyst of their competitive strength today. How Amazon can protect its brand is to continually focus on how best to streamline these processes, from distributed order management and pricing management to services and returns management, to…
Amazon has mastered electronically enabling their supply chain to a level no other online retailer can match today, traversing supply chain optimization to reverse logistics electronically better than many distribution companies (Logistics Today, 2004). The cost efficiencies they have attained through process automation are formidable and make up a large part of their brand when considered at the user experience level (Hausman, Siekpe, 2009, 5). It would be a fatal mistake to move into a distribution model comparable to Dell, as Amazon has defined the underlying technologies, processes, systems and performance that paradoxically have helped Dell grow and survive as a company over time. Amazon needs to continually be concentrating on its core strengths of scalability, website and web application performance and pursue the next major goal of being the dominant Cloud computing platform the Internet, which is heavily discussed in their annual report and SEC filings (DataMonitor, 2010, pp, 7, 23, 24, 25).
Conclusion
The indication of any e-commerce company moving beyond their product focus to embrace platform initiatives is one that also signals a dominance in their chosen markets. Amazon.com has
Consumers' high level of interest in all these products and their build-to-order configurations also point to significant bargaining power of suppliers. Suppliers of MP3 players, cell phones and convergence products also have a significant bargaining power relative to Best Buy and other retailers, and this is especially true of Apple with their series of iPods. MP3 as the market standard for music formats has correspondingly lead to significant bargaining power
Nike television advertisements, as an ordinary girl is transformed into an Olympic runner. Bombarding the airwaves during the 2004 Athens Olympic Games, the "You're faster than you think" campaign is an example of Nike's ability to produce engaging, effective television commercials. While the ultimate success of these advertising campaigns can only be seen in the quarterly reports of the corporations, from a design and marketing standpoint, the Nike ad
Com. In case of several companies, enhancing customer relationships is among the most capable features of e-commerce. However, whereas the Internet has presented the consent of a novel method to draw and communicate with the customer, hardly few enterprises have discovered a method to efficiently manage interactions with their customers on the Internet. (David, 2000) The real skill is involved in making the device suitable to accomplishment of the business strategy
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