Value Chain Analysis – Amazon.com
Unit 4 Individual Project Assignment
GB570: Managing The Value Chain
January 6, 2012
Value Chain Analysis
The purpose of this value chain analysis was to explore the dynamics of Amazon.com in terms of looking at the intricate foundation (value chain) the company has created to serve its millions of satisfied customers. This company operates in the highly competitive industry of e-commerce, which is made up of fast paced marketing, cut-throat pricing, and short attention spans. There are several major success factors to be highlighted in this particular analysis. Again, the primary theme revolves around how the company has consistently served its customers over the past 15 years, and more importantly, the efforts that go into serving those customers. Additional questions will be explored as well: “Why does Amazon have such a strong customer base?” and “What has the company done different in the market to maintain a leadership role among competitors in the e-commerce industry?” The following research and analysis will shed light on these questions and more. The research will be conducted by investigating current information from journals, publications, peer reviews, and information from various credible websites. The various sources examined will shed light on the history of Amazon, the company’s value chain structure and supply chain trends in the industry. The expected results will be a strong focus on customers, seamless processes, advanced technology, and flexibility to change, among other things. The founder of Amazon.com, Jeff Bezos, revolutionized the e-commerce world in 1995, before many people were fully familiar with the concept. He developed an online store that presented a strong sense of ease and convenience that hadn’t been seen previously, except through eBay, whose focus as the time was on fast paced auctions and a consumer-to-consumer based buy/sell business model. Amazon.com strived to create a value chain that logically fit into what people wanted from an internet buying experience: online safety, customer service, and speed. These are the fundamental components of a successful online retailer, which can ultimately lead to a serious competitive advantage. Without a doubt, Amazon.com is a clear example of strong value chain management in action, as this company has risen to the top of the ecommerce industry through extreme discipline, focus, and customer service. Amazon has unique websites in the United States, Canada, China, France, Italy, Japan, Spain and United Kingdom, Germany. The company’s success has been no accident. The company has been highly effective at implementing a value chain that others can only try to match. Amazon, originally known for the place to get your favorite book without going to the bookstore, has evolved into a mammoth sized one-stop shop for other things as well, including appliances, toys, electronics, and thousands of other items. Demand Chain Analysis
Amazon.com is the world’s largest e-commerce site to date and has over 35 e-commerce product categories and hundreds of various sub-categories. “Amazon is much bigger than its close competitors eBay (revenues of $9,156.2 million in FY2010 ending December 2010), and Barnes & Noble (revenues of $6,998.5 million in FY2011 ending April 2011). Leading market position in online retail format enables Amazon to target a larger customer base” (Data Monitor 2011, p. 5). Amazon.com’s business model is built on being a one stop shop for everything retail, from books to furniture. The company went from serving bookworms to anyone looking to purchase something off the internet. The company has been able to serve the early internet savvy crowd and over time be able to capture a large segment of the buying internet population, most of which wouldn’t buy anything from the internet were it not for Amazon.com...
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