Case Study: E-commerce
The emergence of the revolutionary E-commerce technology has offered a novel platform for corporations and consumers to network and conduct business. The realization of the immense scope for online trading facilitated by the Internet led to the establishment of the 5-STAR business networks such as Amazon. Amazon.com, established in 1994, is an American e-commerce and cloud computing corporation headquartered in Seattle, Washington. The giant global bookseller is among the pioneers of online consumer sales. The digital transformation in the book industry has propelled institutional change. Amazon.com, the world’s leader and giant in online sales, has significantly altered the book industry.
The company has transcended its rivals such as Walmart by ranking as the world’s best retailer by market capitalization and total revenues. Amazon, apart from being a reputable online bookseller, also sells an extensive range of other consumer products. The company operates in three major segments namely media, electronics, and other merchandise. The corporation has consistently excelled in the book industry, because it implements the customer relationship management (CRM) and information management (IM) to facilitate the achievement of its business strategies. Amazon.com, a highly data-driven company, utilizes the client experiences and feedback to provide excellent customer services. The corporation offers an online market platform that enables diverse consumers and sellers to market their products. It also provides its users with diverse opportunities to submit reviews of products, email notifications, and product recommendations. Amazon has a significant variety of product options, which provides its customers with numerous choices. The company also collaborates with other corporations to enhance its growth.
The Advantages and Disadvantages of Selling Books over the Internet
The Internet marketing has both potential benefits and drawbacks for the online booksellers. E-commerce promotes customer-to-business and customer-to-customer transactions. The approach has enabled online book retailers such as Amazon to increase buyer power by offering a wide range of product choices. Selling books online facilitates the access to significant geographical locations and time as opposed to physical bookstores where the business is open only for a limited period to reach the suppliers and consumers. Electronic online book selling promotes access to global market, which increases the company’s market share (Pride, Hughes, & Kapoor, 2013). Online book selling is affordable for consumers because despite being miles away they do not incur any transportation costs for the delivery of the goods to their place. E-commerce strategy enhances a degree of customer responsiveness because it is instantaneous. This approach of Just-in-Time promotes effective and efficient business operations. Online book selling facilitates the reduction of operation costs such as facility and inventory expenses. Furthermore, the retailers obtain a great deal of customer feedback, which they use to offer individual clients particular or bundles of products depending on the product descriptions through purchased or viewed items. E-book selling is valuable because soft copy titles are less vulnerable to damages as opposed to physical books.
However, online bookselling has drawbacks. The e-commerce technology raises the concerns of privacy and security breaches. Online marketing promotes unauthorized access to one’s private data, which poses threat to data manipulation. Online bookselling has also evoked the worries concerning the security of online payments. The customers are reluctant to buy books online because they are concerned with the uncertainty regarding the retailer’s order fulfillment capacity upon purchasing the products. Furthermore, in a case of return of the goods following late or failed delivery the client is uncertain of getting refunds. Some people are hesitant to buy books online because they prefer purchasing directly from the physical bookstores where they have the opportunity to see and touch the books before making the decision. Online book selling is capital intensive, because businesses have to invest intensively in adding value to their products and services to attain loyalty, especially by incurring transportation costs while delivering goods to the customers’ doors. E-commerce has led to increased competition in the book retail industry, because there are no entry barriers into the market.
The Impact, the Downloading of Books Online, Will Have on the Amazon’s Business
Amazon.com has exponentially dominated the book industry with an established solid reputation. The corporation demonstrates high product awareness and intensive marketing budgets that have enabled it to surpass its powerful rivals such as Walmart. Amazon’s customer-centric innovations such as the development of the Amazon Kindle in 2007 contributed to an unprecedented upsurge in e-book sales (Wasserman, 2012). Amazon’s novel e-reader significantly promoted a convenient way of reading which has emerged to be its clients most preferred option. The organization’s customer loyalty and market share have considerably increased because many consumers have opted for e-books as opposed to reading hardcover books. Amazon’s innovation model of Kindle Serials facilitates the easier downloading of books based on a client’s preference. The company, which is a global leader in the e-book revolution, is likely to face a significant financial crisis following the emergence of free resources that would allow the downloading of books online. These new players have a potential of leading to the collapse of e-book business because the customers will not have to pay for paper books. The new consumer preference in reading from the screen rather than on actual paper books will drastically lead to a decline in the Amazon e-book sales.
Other Products that Amazon Could Sell that Are Downloadable
Amazon has a global recognition for retailing books. The company has a vast resource of millions of books, which is considerably much more than a physical store can offer. The corporation exploits the immense Internet opportunities to introduce the available titles and market them online. Amazon is a dominant player in the international book retail market with a significant customer base and product diversification from books and media to other consumer goods (Turban, King, Lee, Liang, & Turban, 2015). The company’s potential downloadable product lines range from music and software to movies and journal articles.
Benefits of Implementing E-Commerce in Retail Bookstores
E-commerce facilitates the Just-in-Time and real-time operating systems that promote the optimization of inventory and efficient supply chain operations. Establishing an online store promotes the expansion of the business because there are no limitations in forms of physical boundaries and time constraints in an attempt to attain significant mass reach (Sood, 2014). An unlimited virtual warehouse promotes the provision of services to diverse customers anywhere worldwide. On the contrary, typical physical stores are restricted by geographical location they serve and implementing a large-scale business is challenging, because it requires substantial amounts of capital. E-commerce promotes the establishment of online presence since a considerable number of online users practices online shopping. Establishing an online store facilitates reaching both existing and potential clients. This approach will enable retail booksellers to expand their reach to the new generation of Internet users’ customer base. Achieving their loyalty through creating brand awareness and the clients purchasing the products will increase sales. Online book selling will help minimize the operational costs associated with the facility and inventory maintenance of a physical bookstore. A well-designed online store facilitates the optimization of such expenses because it is easier for online marketing through social media platforms such as Facebook to reach the existing customer base and attract potential clients. A virtual online store, as opposed to a physical one, helps clear up dead stock because the online storefront features the sale of the products on the front page, which may potentially draw the interest of a new client. The strategy will increase sales and profitability. E-commerce promotes the up selling and cross selling of a company’s products. By setting up an online store, the retailer can implement the up and cross selling at the shopping point by linking similar items on their website, which creates awareness of more products to your customers.
E-commerce has not only become a requirement for potentially expanding the contemporary businesses, but also has opened new markets for the traditional physical bookstores. A great number of typical book retailers have increasingly integrated into the e-commerce technology. However, despite the free market entry, the book retail industry poses significant challenges to the new entrants. A considerable amount of capital is required to establish a bricks-and-mortar bookstore, which is not affordable for newcomers. Furthermore, the presence of giant leaders with established reputations such as Amazon.com which dominate the industry makes is difficult for new entrants to venture into the sector.
There is a need for the giant e-book retailers such as Amazon to sustain their international recognition by continuously embracing technology developments and innovation and offering excellent services by meeting the ever-increasing customer expectations. To expand their client base, Amazon and other huge players in online sales need to implement a robust and practical secure payment system that will build customers’ trust and alleviate the consumers’ reluctance to shop online. A secure payment system will reassure the customers of the protection of their personal information online. Amazon has a powerful brand worldwide in retailing books. By adding new categories to its reputable store, it may potentially lead to the decline and loss of the brand. There is a need to moderate its diversification to avoid damaging its international recognition. Finally, Amazon should establish an internal delivery system as opposed to relying on external delivery companies, which increases transportation costs. The approach will help the corporation to avoid incurring significant transportation spending associated with the potential cost rises in the transportation industry. Failure to absorb these expenses leads to the passing back of the costs to the customers with possible negative effects.
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