Student ID: 071090070
Course: BIS 541/03 –MANAGING INFORMATION
Program: CEMBA Commonwealth Executive Master of Business and Administration
TMA 1: “Amazon.com”- A Business History
Tutor: Prasanan P.T. Kannan
Submission Date: 07.March. 2009
TABLE OF CONTENTS
3.0Analysis of Causes
3.1 Amazon’s Debt 2-3
4.0Decision Criteria and Alternative Solutions
4.1 Reduce expenditure in inventories and better management7 in supply chain 4.2 Presenting a competitive edge to competitors7 4.3 Expansionto Asia8
5. Recommended Solutions
5.1 Technology Integration and R&D9
5.2 Strategic Cost Analysis9
5.5 Visionary & Informative10-11
5.6 Keep customers in the loop on everything11 5.7 Shipping & Delivery11
5.8 Expansion to Asia Region11-12
5.9 Word-of mouth advertisement12
6.0 Expand the product lines13
The study comprises of Amazon.com which started its history by selling books and now one of the online market leaders globally not only for books but products from various categories. Company started with a mission to be Earth’s most customer centric company.
In order to become the largest and convenience online store for all, there are major problems or threat being faced by Amazon.com in succeeding its mission. The major problems are Amazon facing high amount of debt, it’s less initiative in not expanding to other developed countries, and also competition from other online retailers and one tough opponent is Barnes & Nobles.
Many plans of actions can be taken and some of it is; Amazon.com should decrease long–term debt by increasing expenditure on research and development, increasing word-to-mouth advertisement and good customer service. Amazon.com should also expand the five most common languages in Asian region. Focus marketing strategies on customer feedback to find out what Asian customers tend to buy and willing to spend on. Strategize new plan on improving sites to be informative and attractive as much as possible so Amazon.com should also adapt to the best technology where it can sustain as a strong innovator in ever increasing retailer market. Amazon.com also must strive to give customers the best service in shipping and delivery as it’s an important aspect in online business to out beat its entire competitors on this online industry.
The main problem faced by Amazon.com now being an online retailer can be divided to three in overall. Amazon.com is in confronting huge debt behind their successful screen. Amazon.com is lack of expansion to other regions or Asia which be said as another big market for a huge online bookseller as Amazon.com. Another problem is the competition being faced by them with one of the tough opponent as Barnes&Nobles.
Analysis of the Problem
Amazon.com’s in Debt
3.1 Amazon’s Debt
One of major causes of Amazon’s huge debt is its large expenditure. In order to keep its advantageous position, Amazon has no choice but to continue to spend astronomical amounts of money on sales & marketing, research & development and general & administrative costs. (Table 1 & Table 2) “One misstep, and its love affair withy investors and sources of capital could be over.” (Kimberly Weisul, 1999) • Competitors
Although Amazon won the battle...