A Case Study Report
Inventory Management at Amazon.com
Prof. R.K. Vijaya Sarathy
Rupesh Kumar Director, DSBS Bangalore
1.2.2 Industrial Analysis
2. Online Marketing
3.3 Online Marketing Domains
3.4 Types of online Marketers
3. Inventory Management
4.5 Inventory outsourcing
''The logistics of distribution are the iceberg below the waterline of online bookselling,'' Jeff Bezos, founder and chief executive of Amazon.com
The Internet has changed the way that we perceive business and the way that we as consumers may make our purchases. In fact, the online consumer today knows the convenience of purchasing a book online and having it delivered to their door in a matter of a few days. There is no more need to fight crowds, find a parking spot, and deal with traffic. The high street and mail order systems still have a place in the mix of purchase routes; however it is no longer the only method of making purchases. The Internet revolution has seen a massive increase in the long distance purchases made by consumers, as geographical barriers are no longer as important as they were. The lack of geographical importance has influenced the strategy of Internet companies. One of the first companies that took advantage of this was the online bookshop Amazon.com. The case provides an overview of Amazon.com's inventory management. Jeffrey Preston Bezos the founder of Amazon.com launched the company when he realized that Internet provided immense scope for online trading. Although the site was originally launched as an online bookstore it eventually offered several other products to keep abreast of the competition. The case takes a look at the different products and features offered on the site. The case also discusses Amazon's value propositions and its criteria for choosing strategic partners. It then elaborates on the strategies adopted by Amazon for managing its inventory. It also explains Amazon's decision to outsource inventory management to distributors. The case takes a look at Amazon's decision to sell the products of competing retailers on its site. It concludes with a brief note on the future challenges in Amazon's warehouse management
The continued success of Amazon.com can be attributed to its diversity in terms of geography as well as its diverse selection of merchandise, ranging from media such as books, CD's, and videos to online auctions and house wares. Amazon.com currently operates four international websites in France, Britain, Germany and Japan giving it global Internet exposure. One of several factors that have proven Amazon.com successful is that it has the first mover advantage. Not only was it first in its industry, it has also been successfully marketed. But as with any Internet site, the actual presentation and processing are seen as a result of the underlying technology and the way the company uses it.
Amazon has grown admirably from its initial beginnings as a small online bookseller to a giant superstore company. During this process of rapid growth, it has incurred significant losses and it becomes more expose to a greater competition and threats. Cutting costs and achieving profitability remain Amazon’s greatest challenges. However, there are key factors such as a strong brand, providing customers with outstanding value and a superior shopping experience, massive sales volume and realizing economies of scale which contribute a lot to the success of this company Founded as Cadabra.com by Jeff Bezos in 1994, Amazon.com was...
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