Assignment: Amazon.com`s E-Business Model To be successful in business, graduates must not only be capable of using various technologies, they must also know how to use the Internet to exchange information with customers and vendors, research market trends, track competitors` products and pricing, and buy and sell goods and services. Amazon.com was founded in 1994 as an online book retailer. Now, the largest retailer of books has also become the largest online retailer with a customer base of over 30 million people. Amazon competes in a vast array of markets including: books, movies, digital readers, computers, consumer electronics, pet needs, groceries, health and beauty aids, toys, clothing, jewelry, shoes, sporting goods, tools, automotive, hardware, building supply, and more. Despite their large product offering, Amazon has maintained its strong brand. Imagine if Toys-R-Us, the largest toy retailer began selling books or if the NBA began selling hardware online. The threat of consumer confusion would rise, thus bringing into question the value of the Toys-R-Us and NBA brands. Some analysts question the wisdom of Amazon.com selling products that are typically sold in the business-to-business markets. For example, you can now purchase industrial, laboratory, and scientific supplies from Amazon.com. Required: 1. Review the most current Amazon.com Annual Report at: http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual 2. Browse www.Amazon.com, www.BarnesAndNoble.com, and www.Borders.com. 3. Create a table to compare and contrast the Web sites: www.Amazon.com, www.BarnesAndNoble.com, and www.Borders.com, using the following criteria: functionality, design, content, originality, professionalism, and effectiveness. Include the table as an appendix to the required paper. You are to write a four to five (4-5) page paper that answers the following: 1. Discuss the pros and cons of Amazon`s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. 2. Determine the impact if Amazon.com had split up and become a family of brands (for example, “Amazon” for books, “Supertoys” for toys, etc.), each with a different public face but all run by the same parent company. 3. Determine if it would be possible for Barnes and Noble or Borders to extend their markets in the same way that Amazon.com has. Explain your rationale. 4. Determine what Amazon.com would need to do to expand their distribution chain to include some brick and mortar outlets, and whether or not this would be a good idea. The format of the paper is to be as follows: o Typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format. o Use headers for each of the criteria, followed by your response. o In addition to the four to five (4-5) pages required, a title page is to be included. The title page is to contain the title of the assignment, your name, the instructor`s name, the course title, and the date. Note: You will be graded on the quality of your answers, the logic/organization of the report, your language skills, and your writing skills. This assignment will be graded using the following rubric: Outcomes Assessed > Formulate business plans based on an analysis of domestic and global operating environments, market dynamics, and electronic and internal capabilities. > Use technology and information resources to research issues in the functions and processes within a business enterprise and key factors affecting productivity. Criteria1. 1. Discuss the pros and cons of Amazon`s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. 2. Determine the impact if Amazon.com had split up and become a family of brands (e.g., “Amazon” for books, “Supertoys” for toys, etc.), each with a different public face but all run by the same parent company. 3. Determine if it would be possible for Barnes and Noble or Borders to extend their markets in the same way that Amazon.com has, and explain your rationale. 4. Determine what Amazon.com would need to do to expand their distribution chain to include some brick and mortar outlets, and whether or not this would be a good idea. 5. Clarity 6. Writing – Grammar, sentence structure, paragraph structure, spelling, punctuation, APA usage. references).
Running head: Amazon.com`s E-Business ModelAmazon.com`s E-Business ModelName:Institution:Instructors name:Course title:Date: Amazon.com AND BUSINESS DIVERSIFICATION IntroductionAmazon.com is an e-commerce company that was launched in 1994 as an online book retailer. The company has undergone positive growth and has now diversified to include a wide array of products that include furniture, digital readers, computers, consumer electronics, pet food, groceries, health and beauty aids, toys, clothing, jewellery, shoes, sporting goods, tools, automotive, hardware, building supply, among others. Despite their large product offering, Amazon has maintained its strong brand. Part1: Pros and cons of Amazon`s growth and diversification of business and specializationA company, like Amazon.com, that offers a wide range of consumer products certainly have its pros and cons. One of the most obvious pro is increased profit margin brought about by the different products offered. As stated in Amazon.com (2011), the company did not realize any profit six years after its establishment. However, as the company grew through gradual diversification, it started posting improved profits. The first profit posted the company six years after its launch amounted to only $5 million compared to year 2011 figure of 6.7 billion. This can be attributed to the company`s diversification strategies because it is now possible for every customer to get virtually everything under one brand. Another pro is the company`s strong consumer base. Statistics show that the current number of active customer and sellers` accounts is 130 million and 2 million respectively (Amazon.com, 2011). This can almost be entirely attributed to increase in the number of products offered. Diversification therefore gives the company a competitive edge by increasing its share in the market through the large customer base. Another pro is that the power of the company`s brand has been greatly reinforced because of its feature as a one stop shop. Amazon`s diversification has yet another pro in that it has enabled it to develop a strong system of doing business. In other words, the company`s infrastructure has continuously become stronger hence making it retain its position as a market leader in e-commerce.On the other hand, Amazon`s diversification has obvious cons. The first one is lack of adequate information about the new market into which the company is diversifying (Luxenber, 2004). Faced with a wide range of products, the sales team is exposed to a different business environment that may bring inefficiencies on their part. This has a potential of reducing the company`s gains. Secondly, when so many products are introduced under its brand, there is a risk of competition within the company which is not healthy for business. The third con is that diversification can interfere with the ca...