Amazon.com's cross-sell and up-sell strategy for profitability

Information Technology

Amazon.com Situation Analysis

Having grown through a series of partnerships and the incremental development of new online merchandising stores they own and have alliances with other companies to promote, Amazon.com today is faced with the following key factors that define their strategic position. First, there is the need to find higher levels of efficiencies in their core business, and as a result of system-wide consolidation at the same time increasing the use of analytics applications including SAS and E.phinany, the company is gaining greater insights into it customers' unmet needs than ever before. Second, the growth of online sales and the need for optimization as defined by the work of Dr. Russell Allgor also needs refinement and more focused efforts to better streamline the core processes the company relies on in completing its supply chain, order management and fulfillment strategies. Finally the current situation analysis is one where elusive profitability must be found in devising more effective cross-sell and up-sell strategies of comparable products.

Amazon.com Problem/Opportunity Statement

Using insights and analytics to ascertain the unmet needs of its millions of customers, Amazon.com needs to redefine its cross-sell and up-sell strategies to stress profitability over inventory turns.

The Computer Industry

Answers to Gateway Case

The Gateway stores failed due to the high costs of operation and the relative low level of sales per store. In addition, the stores were very expensive to keep open and ultimately failed due to a lack of profits being generated.

Gateway can survive and the current leadership which has a strong background in cost reduction from eMachines may move production offshore to China and Taiwan, making the profit per unit more achievable. Today the company however is struggling to attain profitability as its supply chain partners, many still U.S.-based, have higher prices for the lower volumes the company is ordering. Gateway can survive; yet it must emulate eMachines even more and move production offshore, including all supply chain partners, to attain the price points necessary to compete.

Answers to Sun Case

Sun can survive if the company manages its customer loyalty as effectively as possible; making sure their focus on customer retention is comparable to Apple's. In terms of pure price competition relative to Linux and high performance generic PCs, Sun will not be able to withstand the competitive threat. For Sun, the answer to their future growth and stability is in services and software.

Not directly, as they are part of an alliance with Microsoft and IBM to define the Java standard. They will however be successful commercially selling Java-based development tools; their focus on development environments for Java is the best bet.

Networks and Telecommunications

Why are standards so important in networks?

Due to the need for each system to be able to communicate with the other, it are essential standards be in place. Hence the development of the Open Systems Interconnect (OSI) Model which lead to the development of the Internet and the Ethernet standard and the TCP/IP protocol, both of which nearly the entire Internet runs on today.

#9, in what way have phones and computers converged? Why is this convergence occurring?

The personal productivity tasks of communication as it relates to the use of telephones and computer systems has long been an area developers and entrepreneurs have poured time and money into. Now with the concept of the Mobile Web, it's possible to have PDAs and cell phones that make it possible to access any website, any e-mail account, from any location there is a cell phone signal. The impetus is the overlap of personal productivity processes.

Computer Security):

Q.#9, Read the information on the Thawte Web site about how users can be authenticated (Web of Trust). Briefly explain how the system works. Do you think this is a secure and reliable system?

The system uses as series of authentication algorithms to verify the identify a person is who they say there are. This is a secure and reliable system to the extent developers use the Application Programmer Interfaces (APIs) and other mechanisms for integrating these techniques into applications.

Transaction and Operations):

Review questions 2, What is electronic data interchange (EDI)? Why has EDI taken so long to catch on? Will business ever use EDI for all transactions?

EDI is a batch-oriented protocol used for completing transactions between companies, and has been in use as an order processing, validation and transaction technique for over forty years. EDI has many limitations, foremost being its approach to batch-oriented processing (most companies run it overnight) and the highly defined series of commands it uses. There is little flexibility in the programming of EDI commands; it is very inflexible. As a result of these factors and the fact that it is slow and increasingly out of touch with the needs of businesses running real-time systems, EDI is stagnating at the minority of transactions today.

6, Why has it taken so long for new payment mechanisms to be adopted?

Because each company's order management system is uniquely different and aligned with their specific approaches to doing business. No two companies do business and manage orders the same way, hence the wide variation in how new payment systems are implemented and adopted.

What is meant by the term "data quality"? Give three examples of problems with data quality.

Data quality refers to the attribute of data that is represents what it is supposed to. Three examples of data quality problems include incomplete data, incorrectly entered data, and misanalyzed data.

On the basis of the cost figures in the text, create a spreadsheet and compare the estimated annual costs for the carious online payment mechanisms for three hypothetical companies. The first company sells digital content for about $20 each and anticipates about 5,000 sales per year. The second company sells music for $0.75 per song, but expects people to download and pay for 5 to 10 songs at a time. It anticipates 500,000 customers. The third company sells stereo and video equipment ranging from $400 to $2,000 per item, and expects about 10,000 sales the first year. On the basis of the data, recommend a payment mechanism for each company.

A customers songs or units price per song or unit

For the song sales, there needs to be an online order capture and management system that can handle all forms of credit card transactions. For the second site with the small transaction size of 75 cents, there needs to be an account-based order system created where customers can create a debit balance and then get credits against it. Finally the larger appliance sales there is the need for managing more complex forms of credit including the definition of credit terms and the offer of a credit card to cover the purchase itself.

Enterprise Integration)

Q.#4 What are the primary features and capabilities of an enterprise resource planning system (ERP)?

An ERP system acts as the central coordination system for the production operations of a company, and includes control over supply chain, production scheduling, production operations, pricing, fulfillment and service.

A and #9, Why is