ebusiness case study

Part IV: Refer to this case study to solve the related questions Amazon.com is a prime example of a globally recognized dot-com who, in 1994, was first to market in the online bookselling business. Subsequently, the firm has expanded rapidly to e-tail a vast number of products and services. However, for the majority of the time amazon.com has been trading, the company has been registering year on year losses. Only in 2004 did the company finally announce a trading profit. The reason for their continued existence throughout the loss-making years is down to investor and lender goodwill. Investors and lenders take a dispassionate view of the business model and make judgments about the future investment plants. The Amazon.com business model was deemed sufficiently robust to gamer a high level og goodwill amongst its investor community. The goodwill of investors is part of the evaluation process of organizations. Indeed, Amazon.com had their own investor-relations specialists to communicate with key lenders and investors. By 1999 the goodwill of investors was being tested to the limits by the $ 1.5 billion long-term debts the company had built up. Like many other dot-com firms the market value of Amazon.com had also declined during this period to $16 billion compared to $23 billion only a few years earlier. In previous meeting with key investors Amazon.com had emphasized the number of unique visitors to their website on as monthly basis as the key growth indicators. Where once this proved sufficient evidence for investors to remain loyal, by 2000 they had become impatient and were only interested in when Amazon.com was going to start registering profits. This case illustrates that even the most prominent and globally recognized companies cannot exist on goodwill alone. Sooner or later, every business needs to be profitable to be economically viable. Profits attract a greater number of investors and a greater volume of investment funds for the organization to grow and achieve its objectives. 1. What is the major component of a company the help the organization to attract investors? 2. Differentiate between e-business and e-commerce. Then tell to which Amazon.com belongs to. 3. This illustrates that even the most prominent and globally recognized companies how