VIRTUAL SUPPLY CHAIN Amazon.com
This report will show the meaning of e-commerce and e-business and how they intertwined with each other as exchange is done. It will also identify the different types of e-commerce especially business- to- business and business-to-consumers. It will also aim to identify the policy used by Amazon.com in managing their virtual supply chain ensuring it is relevant and support the aim of the business.
It will also aim to identify the processes used by Amazon.com to enable customers’ satisfaction and to remain profitable. As the amount of trade conducted electronically has grown extraordinary, it is important that the supply, transportation and replenishing of stocks is coordinated timely and most cost effective.
Transparency brings accountability and responsibility. This openness in the supply-chain allows companies to see how their suppliers are performing, from their sourcing of raw materials to their delivery to the retail outlet. Achieving greater transparency in the supply chain requires the development of comprehensive e-Logistics tools, which provide all players with open communication and shared information in every stage of the order-to-delivery process.
Supply-chain transparency in ordering, inventory and transportation is a prerequisite for optimization and is critical for making business decisions. In this report, the experiences of a virtual supply-chain (VSC) company, Amazon.com are discussed with reference to the strategies, methods and technologies of its supply-chain. The supply-chain aims for improved customer satisfaction and hence for overall competitiveness in a global market.
2. Application of Virtual Supply Chain
2.1 Virtual Supply Chain Policy
7. Recommendation for further Integration
A virtual business employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. Amazon.com was a virtual business pioneer. As an online bookstore, it delivered and brokered bookstore services without a physical retail store presence; efficiently connecting buyers and sellers without the overhead of a brick-and-mortar location.
Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.
Amazon.com is one of the many online stores, often called e-tailers. E-tailers are similar to the typical bricks and mortar storefront, except that customers only have to connect to the internet to check their inventory and place an order. (Fritz, 2008)
The market opportunity for e-tailers is very large as more potential customers want the shopping solutions that will eliminate the need to drive to the store (Bellman, Lohse and Johnson, 1999). The e-tail revenue model is product based, with customers paying for the purchase of a particular item.
Keeping expenses low, selection broad and inventory controlled are keys to success in e-tailing as this sector is extremely competitive. Becoming profitable and surviving is very difficult as the barriers to entry (the total cost of entering a new marketplace) are low. The challenging is undertaking market strategy and differentiating its business from existing stores and websites. (Porter, (1980)
The internet is having a significant impact on how firms...
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