Within four years it is anticipated at Amazon.com will, by capitalizing on their extensive it infrastructure, be able to manage the development of entirely new DRM approaches to profitably selling many forms of digital content from their many sites. Finally, with the extensive it infrastructure the company has today, the natural extension of their business model is into the area of Web Services. This projection of the Amazon.com business model is entirely consistent with the theories of how knowledge can change an organizations' structure as defined by Grant (1996, pgs. 110-121) in addition the creation of competitive advantage through the use of better system and information integration (De Wit & Meyer, 2005, pgs,. 120-140). The concept of distributed order management Web Services, in conjunction with their approach to managing and propagating selling sites globally through their Merchant Services that is being tested today will lead Amazon.com to be one of the leading enterprise services providers for mass merchandising on the Internet. Web Services to the level of complexity and scalability to manage distributed order management over many sites would give Amazon.com a commanding advantage in the e-commerce services marketplace globally. The move by Amazon.com into the area of Web Services will have major implications for the use of it services throughout enterprises that rely on online retailing as well, transforming the role of the CIO. In fact the role of the CIO is already changing to be more process-centric, less technologically-based, and this move by Amazon.com compliments that change (Earl & Scott, 1999, pgs. 30-38).
Within five years Amazon.com, following the progression of these developments, could feasibly become the leading provider of hosted distributed order management Web Services for online retailers globally. The business model for Web Services would resemble the Software-as-a-Service (SaaS) business model being used by salesforce.com today. From this annuity-based revenue stream, Amazon.com could feasibly grow into a leading e-commerce services provider in addition to be one of the world's most dominant online retailers today. The build-out of this strategy over time would give Amazon.com an opportunity to capitalize on the unique and increasingly powerful capabilities derived from their extensive experience and investments in their it infrastructure.
Discuss the question: Can Amazon.com become the Wal-Mart of the Internet?
Having invested heavily in their supply chain, distributed order management, fulfillment and services operations since their launch as a business in 1995, Amazon.com has concentrated more on creating a scalable e-commerce and services architecture vs. concentrating only on promotion and advertising. This latter strategy was a major mistake its early competitors, no many of them gone from the e-business landscape, made. Concentrating on the core business process areas and systems that need to work in conjunction with each other to fulfill customer requirements was where Amazon.com invested the majority of its initial venture capital investment funds. The result today is that the e-commerce and services architecture has been able to successfully scale across online sales of dozens of product categories in addition to offering services both to cross-channel intermediaries in addition to consumers. The extensive use of knowledge repositories by Amazon.com to further differentiate itself has lead to a lasting competitive advantage through the company's ability to learn (Brown, J.S. And Duguid, P., 1998, pg. 91).
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