Question 1 – Achieve Positive Cash Flow
"Would Amazon.com achieve its aggressive goal of becoming cash flow positive by the end of 2001" (Applegate, Austin, Soule, 2009, p. 155)? Amazon.com will be cash flow positive by the end of 2001. A close analysis of operating expenses for Amazon.com from 1997 to 2000 indicates the company has experienced significant increases in fulfillment, marketing, technology, and restructuring costs. Amazon has experienced a positive growth over several years and the upward trend will likely continue in 2001. In 2000 the company had almost 30 million customers. Amazon.com should consider conducting market research and collecting customer information (Applegate, Austin, Soule, 2009). To achieve positive cash flow Amazon.com should also consider several additional factors. First, building a successful business is a journey and business models evolve over time. Business models define the linkages among values, strategy, and capabilities. Amazon.com needs a new business model that follows the four key approaches; Enhance, Expand, Explore, and Exit that can shift with the decisions to enhance a new product or improve a process. Business models need to be flexible and aligned with a deep understanding of the components and linkages. Amazon.com has already demonstrated the relationships the company can create through partnerships with Drugstore.com, living.com, and pets.com (Applegate, Austin, Soule, 2009). Second, Amazon.com needs to focus on expanded partnership roles. Partnerships deliver an ongoing exchange of goods and services and the relationship must be able to adapt to the changing priorities of the parties involved. Expanded partnership roles enable the parties involved to work together to perform activities or source activities to and from one another. Relationships need to share goals and processes involved for achieving them. Amazon.com should have a two-way (interactive) extensive exchange of rich,...
References: Applegate, L. M., Austin, R. D., & Soule, D. L. (2009). Corporate information strategy and management: Text and cases. (8th ed.). Boston: McGraw-Hill.
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