Operation Strategy(Dell, Amazon.Com & Ibm)

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NIILM Center for Management Studies 2009-11

Rajesh Kumar Singh
Roll No 29084
Production and Operation Management Assignment

Question: Discuss operations strategies of three companies.
Answer:
Operational Strategy: Amazon.com

Introduction: Amazon.com has become the largest customer friendly online retailer and provides one click purchase facility to its wide range of products including books, music, toys, gifts, electronics etc. For 2011 Amazon’s net sales documented the value of $48077 million to earn net income of $631 million (Annual Report, 2011). Currently, Amazon is serving more than 137 million of its customers with its 56200 employees all over the world. Moreover, International traffic also ranks Amazon at 16th position. However, Amazon achieved this milestone through deploying its three fold strategy of limitless inventory, customer convenience and low price. The purpose of current study is also to explore that how Amazon achieved its objective by using its digital channel.
1. Mass Customization: Primary difference between a physical retailer and Amazon is its online operations that allow Amazon to adopt mass customization. Amazon.com provides an opportunity to offer huge collection of books, music or other products without keeping them physically on shelf. Millions of books are available at Amazon for purchase while a large brick and mortar store is required to keep such huge inventory. In 1999 Amazon consistently added new product line or capabilities after every six weeks to increase its sale revenue. Currently, its product range can be divided into 34 broad categories. Such product customization differentiates Amazon with its competitors. It is argued that product customization is a critical source of competitive advantage even as compared to price competitiveness as it allows customers to select products according to their needs and wants at one place. So, one can attribute such mass customization to the success of Amazon.com.
1.1 Amazon

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