Communication and Information Technologies That Help E-Commerce

¶ … communication and information technologies that help e-commerce firms to perform work in a virtual work environment. The paper adopts the approach of a consultant tasked with performing SWOT analysis of Amazon. Based on the SWOT analysis of Amazon, the report recommends that the company should adopt DIVA, a group-ware communication and collaboration tool proposed by Sohlenkamp and Chwelos (1994). The model will help Amazon compete with the new e-commerce firms such as Boxed®. The wholesale competitor has efficiently used communication and information technology tools to create a niche in the market.

New communication system: Impact on e-commerce and business communication

Businesses increasingly provide telecommuting facility for their employees. To effectuate this working design, internet and intranet are used as communication sources. To communicate through web-based applications and systems, employees require effective communication skills both formal and informal. The remote working model requires that employees collaborate with the employer through reliable and cost-efficient tool. The impact of these new communication systems is manifold. Time and travel expense of each employee is saved, and the company can hire experts to enhance communication skills. The latest communication systems based on a private intranet of e-commerce companies also help in increasing inter-group proximity in virtual teams. Real-time team communication and work report tracking are also made available through these telecommuting technologies (Cascio, 2000). The information and communication technologies (ICT) also allow e-commerce firms to develop dynamic teams comprising of a multi-skill team members to join work from different locations. Email, voice mail, video conferencing, and messages through social media websites such as Twitter, Facebook, and LinkedIn are also used to communicate for work related matters in virtual work environment. Computer aided design (CAD) and excel spreadsheet are used to communicate the work progress taking place in virtual teams. Following is a SWOT analysis of Amazon that will help identify areas in which Amazon requires improvement.

Amazon SWOT

Strengths: The main strength of Amazon is that the company is a cost leader in the e-commerce retail industry. It has the widest product categories to offer to customers. The economies of scale of Amazon's operations allow the company to offer lowest prices. Amazon's popular offer was "refund the difference." Renowned supply chain: Amazon's supply chain is one of the most renowned in the work of retail shopping. It has the largest number of fulfillment warehouses in all markets that the company operates. Each fulfillment center is strategically located in the geographical areas served by Amazon. Superior IT capabilities: Amazon's information technology capabilities are also superior to the competitors. The company offers transactional security and order status monitoring to its customers. Having an excess server capacity, Amazon also offered cloud computing services. Weaknesses: Amazon uses its leadership in market share as a competitive advantage. The approach leaves the company with zero-margin in several product categories. The company mostly relies on cost cutting-methods that also include tax-evasion tactics. Such tactics have recently back0fired. Opportunities: Online money transfer systems such as those operated by PayPal are experiencing rapid growth. Amazon can venture into the financial services sector as it is already a cost leader in e-tailing. Expansion of e-commerce service to Asia-Pacific and Western Europe regions is another opportunity the company can leverage upon. Threats: Due to ruthless cost cutting strategies, Amazon will increasingly feel pressure from e-retailers that provide differentiated products and services. Tax-evasion tactics in UK are also potential threat for the firm. The information security of personal information of clients is also a potential threat for Amazon.

Potential competition and its strengths:

Boxed and e-Bay are two of the most outshining competitors of Amazon. While e-Bay has remained no. 2 for long in the competition race, Boxed® in a rather new e-commerce wholesaler selling products above $75 value. Boxed® started with seed funding of $1 million and are currently offering to deliver over 600 items in 48 states of the U.S. One aspect that Boxed has improvised more than Amazon is the communication platforms aimed towards communicating customers' needs to its engineering department. Physical work is outsourced to companies such as UPS and other regional warehousing brands. The company performs predictive analytics and suggests products that customers will need to purchase based on their consumption patterns (Mims, 2013).

DIVA: Communication systems for Amazon