Question: please answer all 6 question with numbers so its easy to follow CASE DISCUSSION QUESTIONS 1. What functional-level strategies has Amazon 5. Do you think


CASE DISCUSSION QUESTIONS 1. What functional-level strategies has Amazon 5. Do you think that Amazon has any rare and pursued to boost its efficiency? valuable resources? In what value creation ac- 2. What functional-level strategies has Amazon tivities are these resources located? pursued to boost its customer responsiveness? 6. How sustainable is Amazon's compelitive posi. 3. What does product quality mean for Amazon? tion in the online retail business? What functional-level strategies has Amazon pursued to boost its product quality? 4. How has innovation helped Amazon improve its efficiency, customer responsiveness, and prod. uct quality? When Jeff Bezos founded Amazon.com in 1995, the been falling for several years, whereas other online reonline retailer focused solely on selling books. Music tailers are becoming more dependent on third-party and videos were soon added to the mix. Today, one search engines. This indicates that Amazon is increascan purchase a wide range of media and general- ingly becoming the starting point for online purchases merchandise products from Amazon, which is now the and has developed its own powerful search capabiliworld's largest online retailer, with over $200 billion in ties. As a result, its active customer base in 2018 numannual sales in 2018. According to Bezos, Amazon's bered around 400 million. success is based on three core factors: a relentless To deliver products to customers quickly and accufocus on delivering value to customers, operating ef- rately, Amazon has been investing heavily in a network ficiencies, and a willingness to innovale. of distribution centers. In the United States alone, Amazon offers customers a much wider selec- there are now over 100 such centers Sophisticated tion of merchandise than they can find in a physical software analyzes customer purchasing patterns and store and does so at a low price. Amazon both stocks informs the company what to order. where to store it and sells merchandise directly, and acts as an ori.i. in the distribution network, what to charge for it, and market place for third-party sellers (who accounted when to mark it down to shift it. The goal is to reduce for more than 50% of total units sold in 2017). Online inventory holding costs while always having product shopping and purchasing is made easy with a user- in stock. The increasingly dense network of distribufriendly interface, product recommendations, cus- tion centers enables Amazon to reduce the time it takes tomer wish lists, and a one-click purchasing option to deliver products to consumers and to cut down on for repeat customers. The percentage of traffic that delivery costs. As Amazon grows, it can support a Amazon gets from search engines such as Google has denser distribution network, which it turns enables it to fulfill customer orders more rapidly and at a lower the digital distribution of books a market segment cost, thereby solidifying its competitive advantage over where Amazon is the clear leader. Digitalization of smaller rivals. books is disrupting the established book-retailing in- To make its distribution centers even more ef- dustry and strengthening Amazon's advantage in this ficient, Amazon is embracing automation. Until segment. To store digital media, from books to films recently, most picking and packing of products at and music, and to enable rapid customer download, Amazon distribution centers was done by hand, with Amazon has built huge server farms. Its early investemployees walking as much as 20 miles per shift to ment in "cloud-based" infrastructure has turned it into pick merchandise off shelves and bring it to pack- a leader in this field. It is now leveraging its expertise ing stations. Although walking 20 miles a day may be and infrastructure to build another business, Amazon good for the physical health of employees, it represents Web Services (AWS), which hosts websites, data, and much wasted time and hurts productivity. In 2012, associated software for other companies. In 2018, AWS Amazon purchased Kiva, a leading manufacturer of was projected to generated over $22 billion in revenues, robots that service warehouses. Postacquisition, Kiva making Amazon the leader in the rapidly emerging announced that, for the next 2 to 3 years, it would field of cloud computingl Jeff Bezos is on record as take no external orders and instead focus on automat- stating that he believes AWS will wltimately match Aming Amazon's distribution centers. Kiva robots pick azon's online retail business in sales volume. products from shelves and deliver them to packing tion center by 30 to 40% and boosts productivity Sources "Amuzon to Add 18 New Distribution Centers" Supply stations. This reduces the staff needed per distribu- On the innovation front, Amazon has been a leader "The New Amazon Distribution Model," Logistics Vicipolints, in pushing the digitalization of media. Its invention of August 6, 2012; G. A. Fowler, "Holiday Hiring Call: People the Kindle digital reader, and the ability of customers to Vs Robots" The Wall Street Saurnat, Deeember 10, 2010, p. BI: use that reader either on a dedicated K indle device or on R. I Hottowy. "Advertising, AWS, prime engagement, and thinda general-purpose device such as an iPad, turbocharged party siles reinfor star, July 27, 2018
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