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Amazon's Competitive Advantage The Amazon Amazon’s Network Australia Brazil Canada China France Germany Competitive India Italy Japan Mexico Spain United Kingdom Advantage 6pm East Dane Score deals Designer Men's on fashion brands Fashion Audible Soap.com Download Health, Beauty & April 1, 2014 Audio Books Home Essentials AbeBooks BeautyBar.com Rare Books Prestige Beauty & Textbooks Delivered Fabric TenMarks.com Sewing, Quilting Math Activities & Knitting for Kids & Schools AfterSchool.com Book Depository Kids’ Sports, Outdoor Books With Free & Dance Gear Delivery Worldwide IMDb Vine.com Movies, TV Everything & Celebrities to Live Life Green Alexa Bookworm.com Actionable Analytics Books For Children for the Web Of All Ages Junglee.com Wag.com Shop Online Everything in India For Your Pet Amazon “The Earth’s Most AmazonFresh Casa.com Groceries & More Kitchen, Storage Right To Your Door & Everything Home Customer-Centric Company” Kindle Direct AmazonSupply Publishing Business, Industrial Indie Digital & Scientific Supplies Publishing Made Easy Amazon Local CreateSpace Great Local Deals Indie Print Publishing in Your City Made Easy Look.com Woot! Kids' Clothing Discounts and & Shoes Shenanigans Warehouse Deals Diapers.com Open-Box Everything Discounts But The Baby MYHABIT Yoyo.com Private Fashion A Happy Place Designer Sales To Shop For Toys Amazon Web DPReview Services Digital Scalable Cloud Photography Computing Services Tutorial D203 Shopbop Zappos Group 3 : Katrina Sekhon, Jacob Designer Shoes & Fashion Brands Clothing Blacklock, Kerwin Leung For more information, please visit our blog: Amazon's Competitive Advantage When it first began in the 1990s Amazon aimed to be “The Earth’s Largest Bookseller.” In the past twenty years, its goal has since evolved to being How Does Amazon “The Earth’s most Customer-Centric Company.” This company-wide focus is at the heart of its long-term competitive advantage. CEO, Jeff Bezos, Do Business? explains the company’s approach to doing business very clearly: rather than focusing on the pursuit of short-term profits, their main concern is the long What Makes Them term returns it can see in the future by remaining true to its primary goal of being customer-centric. Despite being in the business for twenty years, Amazon still approaches every day as if “it’s still day one” and this is one of Different? the primary reasons Amazon does business differently. Amazon has achieved and maintained status as an industry leader through constant innovation, the optimization of business processes, and the implementation of effective information systems to achieve specific objectives. Amazon’s customers today fall into four categories: consumers, sellers, content creators, and enterprises & developers. When Amazon began as an e-commerce platform, they were primarily a business-to-consumer (B2C) merchant company focused on connecting end consumers with sellers of books and other goods. With its wide customer base, Amazon has also been successful in supporting authors and other content creators through Amazon Publishing; this has been instrumental for many in getting their products to the marketplace. In order to manage their e-commerce services effectively, Amazon developed online transaction processing (OLAP), customer relationship management (CRM) and supplier relationship management (SRM) systems. Although these systems were originally built for their own online retail services, Amazon realized that they could also sell their systems to other businesses and help them run their own e-commerce platforms. Thus, with the Amazon Webstore, Amazon began business-to-business (B2B) services. On their online sales platform, Amazon collects large amounts of data regarding customer behavior and inventory management. In order to store all of this data, it was necessary to build server farms for data warehouses and web servers. Always looking for that competitive edge, Amazon began selling space on these servers, which opened an entirely new business to serve enterprises and developers. Amazon Web Services (AWS) now hosts private clouds for many businesses such as Netflix, and even government agencies such as the United States Central Intelligence Agency (CIA), expanding into the realm of a business-to-government (B2G) merchant. Amazon’s operations now serve diverse customers and they work in a number of different industries, but at the end of the day no matter which segment of customers they are serving they ensure they’ve got their best interests in mind. • Amazon Webstore • Innovation • Providing an e- • Diverse commerce platform for Product Range selling, order fulfillment, website design and • Convenience advertising Consumers Sellers • Kindle Direct • Publishing Amazon Web Services Developers • Amazon Content & • In-Cloud Publishing Creators Infrastructure: Enterprises Amazon EC2, Amazon • Amazon s3, Amazon Simple DB, Studios Amazon SQS, Amazon FPS etc. • Create Space Amazon operates in many industries, but in each area they are able to be Technology’s Role competitive by maximizing the efficiency of their business processes. Below are several descriptions of how several cases in which Amazon is automating, in Amazon’s improving, and transforming the customer interaction, supply/inventory management, and outbound logistics segments of their business for online Business Process sales and delivery from Amazon.com. Before Amazon, people bought paper books from bookstores. Amazon has transformed the business process of customer interaction using technology and information systems. The e-commerce platform, Amazon.com, has a convenient user interface that allows customers to order almost any product they want from their home. Amazon’s customer relationship management (CRM) systems track customer behavior, storing purchase history and clickstreams in data warehouses. This allows for market basket analysis and targeted advertisements that highlight products customers are likely to want based on their previous history of interactions. Since Amazon is mainly based online, they have an endless stream of information about customers’ online shopping habits, but little to none about offline shopping. In order to correct this, Amazon has been exploring the possibility of selling or giving cash registers equipped with CRM systems to traditional brick-and-mortar retail stores. These Kindle Cash Registers would provide those businesses with valuable insights and also transmit data back to Amazon for customer behavior analysis. Offering to be the suppliers of anything to everyone, Amazon has to manage complex supply chains and enormous quantities of inventory. On their busiest day of the year, Cyber Monday, Amazon warehouses, otherwise known as “fulfillment centers,” were able to respond to 300 orders per second. They were able to manage this demand by having very efficient supply and inventory management systems. Amazon fulfillment centers are entirely organized by a complex information system. All items are tagged with barcodes and tracked by software. Employees called pick ambassadors follow the computer’s instructions to store items in the warehouse in such a way that space is optimized. Because this results in dissimilar items being stored together, this system is called chaotic storage. Amazon is on their seventh generation of fulfillment centers, each generation demonstrating an improvement of the business process. Part of what makes Amazon unique is their ability to ship quickly to most locations. They have been able to prioritize shipping using Amazon Prime, so premium customers can experience even faster shipping. Recently, Amazon has begun Anticipatory Shipping, which means they ship goods to a nearby fulfillment center based on your searches, curser hover and purchase history. This allows products to be delivered even faster. Amazon has been able to optimize almost every step of their business process, but they still deliver using trucks and drivers. In the future they may be able to automate their outbound logistics with Amazon Prime Air delivery drones. Consumer Supply & Outbound Interaction Inventory Logistics Transformation Improvement Automation Amazon’s status as an industry leader makes it a prime example to follow. Amazon isn’t successful solely because their operations are so far-reaching; Amazon itself is a system of technology, people and places that work towards one common goal, giving the best they possibly can to the customers they serve. Any company looking to successfully compete with Amazon must try and emulate a similar system and continue pushing the envelope through innovation and creativity. Works Cited Amazon . (n.d.). Corporate Governance . Retrieved March 18, 2014, from http://phx.corporate- ir.net/phoenix.zhtml?c=97664&p=irol-govHighlights Amazon. (2013, October). History & Timeline. Retrieved March 11, 2014, from http://phx.corporate- ir.net/phoenix.zhtml?p=irol-corporateTimeline&c=176060 Amazon. (n.d.). About Amazon. Retrieved March 11, 2014, from Amazon: http://www.amazon.com/Careers- Homepage/b?ie=UTF8&node=239364011 Hierarchy Structure. (n.d.). Amazon Corporate Hierarchy. Retrieved March 11, 2014, from Hierarchy Structure: http://www.hierarchystructure.com/amazon-corporate-hierarchy/ Kroenke, D. M., Gemino, A., & Tingling, P. (2014). Experiencing MIS (Third Canadian Edition ed.). Toronto, Canada: Pearson Canada Inc. Layton, J. (2006, January 26). How Amazon Works. Retrieved March 4, 2014, from Money - How Stuff Works: http://money.howstuffworks.com/amazon1.htm Opam, K. (2014, January 18). Amazon plans to ship your
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