Case 1. AMAZON.com
Kim Dong Kyun
1. How has amazon’s entry shaken-up retail book supplychain?
Traditionally, The book industry is the chain of “publisher-wholesalers-retail bookstores”.
However, Amazon.com made this chain or supply useless. At amazon.com, unlike traditional bookstores, there are no bookshelves to browse. All contact with the costomer is either through its web site or by email. At the firm’s web site, customers can search for a specific book, topic and etc. Customers can browse, fill up a virtual shopping basket, and then complete the sale by inputting their credit card number. Customer’s orders are processed immediately. Books in stock are packaged and mailed the same day. When their order has been shipped,
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Who has the advantage on these dimensions e-tailer has lots of advantage because they can organize integrated dimensions. They have no limit in place and distribution system apply easily
Nowdays e-retailer is growing lots of dimensions which means typical retailer’s portion becomes smaller
3.a. Why did Amazon take so long to be profitable?
Amazon.com spends a substantial amount on Web advertising and marketing. The firm spent over $340,000 for the first half of the 1996 and ranked 34th in Web ad spending. Since then, however, these expenses have gone up significantly. Also, the firm invested much on their warehouse and state-of-the-art distribution center in New Castle, Delaware. Amazon.com turned its inventory 150 times a year. This make the firm have a lower cost structure than physical stores. Their marketing and operation cost kept the firm a deficit. By August 1996, sales were growing at 34 percent a month. The firm posted revenues of $147.8 million for 1997, an 838 percent increase over the previous year. However, the net loss for fiscal 1997 was 27.6 million, compared to a net loss in fiscal 1996 of $5.6 million. The firm claims to have exceeded expectations and has made its business plan more aggressive.
3.b. What presents the best opportunities and biggest threats to sustaining profitability?
The best opportunities to sustaining profitability are Fending off formidable competitors, Leveraging the Amazon.com
The bookstore chain has been decreasing in profit in the US over the past 20 years. Most of the books retailers are shutting down their operations and only a few are still operating in the country. Barnes and Noble has become the largest bookseller in the book retailers industry. The firm has integrated its business philosophy into web presence though eBook marketplace. This business strategy assisted the firm to be able to reach a large scale customers and remain as a strongest competitor in the book retailing market.
Amazon.com has successfully managed to make its customers to feel that anything they could possibly want could be found on their website. Additionally, its products are marketed at a competitive price. Another important factor is their speedy delivery with their usage of UPS and FedEx (United States) and Royal Mail (United Kingdom). The company also caters for people that prefer online shopping with extra services such as Amazon Prime - a service with a yearly payment, customers are eligible for free next day delivery. Even though Amazon.com is known to be an online seller of most things, it still excels in its original market of book selling. Evidence of such is
Amazon.com Inc. was initiated by Jeff Bezos in 1994 after realizing the rapid rate at which the internet and websites were growing in popularity among business organizations and individuals. In 1995, the company started operating its website for selling books, videos, compact discs, computer software and computer hardware before being incorporated in1996 as an e-commerce company (Reuters, 2015). Apparently, the company offers may products and services for sale; these products include merchandise for resale products offered by third parties. In this regard the
The Charles Schwab & Company was founded shortly after the U.S. SEC deregulated brokerage commissions in 1975. The company differentiated itself at the time by becoming a self-service brokerage house that put the power in investor’s hands to make critical decisions while paying up to 75% less than traditional brokerage firms. This established the brand as a trend setter, which it further cemented by becoming a technological leader in 1996 when it introduced an online trading platform. Schwab then began to further cut prices and offer financial services through three different market segments:
While many expenditures in 2000 were related to Amazon’s efforts to implement its strategy for growth, operating costs had also increased. Amazon’s fulfillment costs were 11 11% of sales in 1997 and 1998, increased to 14
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Warren Buffet invoked the substance-over-form concept to justify accounting for the GEICO and General Foods transactions as dividends distributions rather than sales of stock. Do you agree with Buffet that the substance of each of the proportionate redemptions was a dividend and not a sale of stock?
Barnes and Noble is the market leader in the bookstore industry. They have grown their business during tough economic times and have adapted well to the changing consumer demands as technology has advanced. By continuing to enhance their competitive strategy to align themselves with market demands, Barnes and Noble, with its multi-channel distribution platform, will continue to have success in the coming years as competition will feel the pressures of increasing digital mediums and decreasing hard copy book demand. This internal analysis of Barnes and Noble will examine their competitive position with regards to their value chain and strategic issues, as well as examine strengths, weaknesses, opportunities, and
When you place an order through our website, your credit card is authorized for the amount of the order, which puts the funds on reserve. The charges are not made until the order ships. As the release date of your title draws closer, we will submit a new authorization request to your bank. If your order is cancelled for any reason prior to shipment, we immediately release the authorization. However, depending on the bank that issues your card, it may take 2 to 5 days for the funds to be unreserved, a process over which Barnes & Noble has no control.
Introduction JP Morgan Chase & Co. is an American National banking and financial services institution, headquartered in New York. JPMC is one of the world's largest investment banker, Treasure Service Providers, Analysts, Private bankers, Investment Bankers, Wealth and Asset managers with more than 27000 employees around the world. JPMC operates in more than 50 countries and has millions of customer base in US as well has most of the world's prominent corporate, institutional and government clients. JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.6 trillion and operations worldwide. In 2014, JPMC earned a record $12.8 billion in net income on revenue of $97.9 billion.
Before Warren Edward Buffett, Berkshire Hathaway was a textile company. Buffet acquired stocks and before long he was the largest shareholder (1963). He became part of the board and appointed the chairman so he would have someone he trusted running the company. With the funds from Berkshire Hathaway coming in, Buffett used it to invest in National Indemnity. The company was bought but he left it the way it was: left previous Ringwalt in charge, kept current employees, shareholder benefits and so on. Insurance companies are a perfect way to get a lot of capital up front because you can then use this money to purchase other companies or stocks, like what Buffet did. Buffet was involved with several
Amazon is a company that sells many open product categories online by allowing customers to take the time to search and shop through the product offerings. Many product categories that are offered on Amazon may include device accessories, kindle devices, beauty, books, electronics, health & personal care, etc. The foremost product category that can offer the greatest advantage compared with a retail store chain is most definitely the books category. Reason to this is that the company has expanded the customer’s online shopping experience by offering such a wide range of physical and electronic books, depending on the preference of the customers. They are able to search for the top-rated selling
The first and foremost is the reduction of delivery time from few days to just few hours. An e-retailer can deliver the product within few hours of ordering in anticipatory package shipping method unlike few days it takes to deliver in a traditional shipping method. The major shortcomings of e-commerce business is that people don’t like to wait for their purchases. Thus this method will mitigate the e-commerce industry’s major disadvantage when competing against brick-and-mortar stores by cutting down the delay between order placement and delivery. This will increase sales, customer satisfaction and loyalty due to close to real-time delivery of products and reduced delivery time. The second most important advantage offered by this method would be reduction in shipping cost by reduction in expedited shipping. Since this method anticipates the consumer purchase before it happens, most of the expedited shipping through air can be avoided. This way, customers could get the benefit of substantial cost saving on non-expedited package in same delivery time as expedited package which comes at a higher cost. The third major advantage offered by this method is the reduction in local warehouse cost. The anticipatory shipping method use predictive analytics to forecast the aggregate demand at region level and can ship the package directly from central fulfilment/distribution centre to third-party logistics provider
Amazon operates using a web-based platform to sell books. The web-based model targets a global market, has reduced overhead costs and a shorter operating cycle as compared to brick and mortar businesses such as Barnes & Noble and Borders. Amazon’s online model has a superior inventory
Amazon¡¦s idea of selling books online on such a grand scale, though, has brought online retailing to a new level. Following is a look at Amazon¡¦s online retail process and how information systems played a role in the overall process.