The E-commerce company that I visited is Amaozon.com. They are the biggest world retail company in the word. When it comes to Amazon’s line of business, then it is a bit complicated. It is a traditional retailer when I look at it regarding consumer-to-consumer business model (C2C) (Mahadevan, 2000). It sells its products at a standard markup and also acts as a gateway of other retailers. It is also a market for used products, business-to-consumer business model (B2C). The first picture of Amazon that comes in mind when you open its homepage is purely retail. Amazon defines its lines of business as services sales, product sales, publishing, digital content subscription, AWS fulfillment, advertising and co-branded credit cards. Therefore, a summary of all the amazon’s lines of businesses is internet services, online retail, and Kindle ecosystem.
Under online retail, Amazon sells its products as a traditional retailer and are usually a low-cost retailer. Amazon started a book selling company and rapidly expanded to se4llind electronics, households, movies, and music. It has the biggest selection of products in the world and sells them at a low cost and small profit. Amazon also serves as a channel for other retailers to sell their products and cut of every purchase (Timmers, 1998). It maintains its status as a destination website but does not have to keep an inventory of lower-selling products. It also has a platform for selling used products through its seller marketplace. This is a competition to eBay; the seller marketplace provides another retail revenue for the company without the need to stock products in its warehouse. The sellers do the advertising and Amazon cuts of every sale for providing the channel.
Amazon’s internet services are not standalone lines of business because they are intertwined with the retail business and Kindle ecosystem. It provides services like Amazon Prime, that provides a free 2-day shipping on retail purchases, on -demand video streaming, and open access to Kindle library, all for an annual fee. It offers Amazon Web Services(AWS) that manages servers and internet services for the company and other companies too at a cost. Amazon made a business expansion into manufacturing and distributing the Kindle, tablet family (Mahadevan, 2000). However, this business is selling at a loss and putting the company at a market risk.
Product selection and availability is amazon’s customer value proposition. The main work for amazon’s supply chain is product availability and delivery for a full portfolio of goods the following day (Timmers, 1998). The client value proposition is never compromised because the company invests in stock safety and fast and efficient distribution of products.
Amazon competes with the auction site by the name eBay, in the media segment. Apple Itunes, Google play store, media game changer, Netflix, Time Warner Cable, media producer Liberty Interactive, are also amazon’s competitors in this segment. Under electronics section, its competitors are Family Dollar, Staples, Target, RadioShack, Best Buy, Walmart, Sears, big Lots, Delia, and Systemic. Alibaba Group, LightInTheBox Holding Co, Vipshop Holdings, Wayfair Inc, Zolile, Overstock.com, and PCM are its competitors on general merchandise (Mahadevan, 2000). Amazon competes with the world’s largest companies like CWD, Google, PC Connection, Oracle, Insight Enterprise, salesforce.com, Citrix Systems, and Accenture in the operating segment.
The main competitive advantage that Amazon has over its competitors is that it dominates all the online retail world in the united states and no competitor can knock off its throne. It offers the lowest selling prices and a well-developed delivery network with warehouses dotting the country( Timmers, 1998).. This makes it difficult for its competitors to compete with it directly. Amazon owns its robot company and has deployed human workers in all its warehouses and has a host advantage that is impossible to duplicate. It has large users with credit cards on file. Well, it is not completely impossible to compete with Amazon, but it has sustainable competitive advantages that make it tough to fight it.
Mahadevan, B. (2000). Business models for Internet-based e-commerce: An anatomy. California management review, 42(4), 55-69.
Timmers, P. (1998). Business models for electronic markets. Electronic markets, 8(2), 3-8.