The Integration of Business and IS Systems: Amazon
The Integration of Business and IS Systems
Amazon.com – a case study
Blaithin McLoughlin
DL243
27th October 2007
Amazon’s Mission
“Our vision is to be earth 's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon.com’s quest to become earth’s most customer centric company is largely driven by its use of technology. In fact, its continuous innovations are all driven by huge investments in information systems (Laudon and Laudon 2005).
Information systems not only support their mission, but in fact drive their business strategy. In this paper , Amazon’s use of information at each stage of Porter’s value chain will be considered. Their innovative and forward looking use of information systems to generate competitive advantage will be analysed in the context of Porter’s five forces and we will also have a look at how they have formed Amazon have formed strategic alliances to overcome certain competitive forces.
Future plans to sustain competitive edge will be examined; Amazon not only continue to use technology to improve their customer centric operations, but are now in fact opening up this technology and providing technical and logistics solutions to other firms.
The Value Chain
The concept of ‘Value Chain Anaylsis’ is described at length by Michael Porter (1985). He notes that every firm is a collection of activities that are performed to design, produce, market, deliver and support its products or services. He identifies specific, critical-leverage points where a firm can use information technology most effectively to enhance it’s competitive position (Laudon and Laudon , 2005). In his value chain model, ‘Primary Activities’ such as inbound logistics, operations, outbound logistics, sales and marketing and service, are seen as basic activities that add a margin of value to a firm’s products and service.
Since
Amazon.com – a case study
Blaithin McLoughlin
DL243
27th October 2007
Amazon’s Mission
“Our vision is to be earth 's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon.com’s quest to become earth’s most customer centric company is largely driven by its use of technology. In fact, its continuous innovations are all driven by huge investments in information systems (Laudon and Laudon 2005).
Information systems not only support their mission, but in fact drive their business strategy. In this paper , Amazon’s use of information at each stage of Porter’s value chain will be considered. Their innovative and forward looking use of information systems to generate competitive advantage will be analysed in the context of Porter’s five forces and we will also have a look at how they have formed Amazon have formed strategic alliances to overcome certain competitive forces.
Future plans to sustain competitive edge will be examined; Amazon not only continue to use technology to improve their customer centric operations, but are now in fact opening up this technology and providing technical and logistics solutions to other firms.
The Value Chain
The concept of ‘Value Chain Anaylsis’ is described at length by Michael Porter (1985). He notes that every firm is a collection of activities that are performed to design, produce, market, deliver and support its products or services. He identifies specific, critical-leverage points where a firm can use information technology most effectively to enhance it’s competitive position (Laudon and Laudon , 2005). In his value chain model, ‘Primary Activities’ such as inbound logistics, operations, outbound logistics, sales and marketing and service, are seen as basic activities that add a margin of value to a firm’s products and service.
Since
References: Clarke, Stephen (2001) Information Systems Strategic Management –an integrated approach, Routledge, London David Chaffey: “Amazon Case Study 9.1 Learning From Amazon’s Culture of Metrics” www.davidchaffey.com Accessed on 13th October 2007. “Friend Accepted”, The Economist, Friday 26th October 2007 “From scratch: Amazon keeps supply chain close to home”, Beth Bacheldor, InformationWeek, March 5, 2004 “Jeff Bezos ' Risky Bet” Business Week, Cover story, November 13, 2006 www.businessweek.com “Jeff Bezos ' Risky Bet” www.businessweek.com November 13, 2006 Laudon, J and Laudon K (2006), Management Information Systems: Managing the Digital Firm (10th Edition) Prentice Hall R Rayport, J.F and Sviokla (1995) ‘Exploiting the virtual value chain’, Harvard Business Review, November – December, 1995 SEC (2007) United States Securities And Exchange Commission submission Form 10-K from Amazon Ward, J and Peppard, J (2002) Strategic Planning for Information Systems, 3rd Edition John Wiley & Sons, Bedfordshire. Wheelen, T and Hunger J, (2004) Strategic Management and Business Policy, 9th Edition, Pearson/Prentice Hall, New Jersey.