Amazon.com, Inc., known as Amazon, is an e-commerce and cloud computing company based in the United States. Founded on July 5, 1994, by Jeff Bezos in Seattle, United States. It is the world's largest shopping site in terms of both total sales volume and market value. Considering that Amazon sales thousands of kinds of products in many countries, it is clear that there is a need for highly developed SCM. To start with, Amazon’s SCM has a strategic fit with its competitive strategy of being the retailer of choice for its customers. The combination of multi-tier inventory management, superlative transportation, and highly efficient use of IT, and its wide network of warehouses are all geared towards aligning its SCM with its competitive strategy. In this paper, a detailed review of Amazon's SCM will be made.
Amazon's European Distribution Strategy Case StudyYASSER ELSEDAWY
Amazon's supply chain challenges in Europe
Amazon.Com was launched on 16th July 1995 by Jeff Bezos. In the beginning, Amazon.com started as an online bookstore, With 25 million titles it became the earth's biggest bookstore but soon diversified. In 2008, Amazon had 8 warehouses in the U.S. and another 15 in the rest of the world. Amazon now has around 50 warehouses, 20 in the US and rest in Canada, France, Germany, Italy, UK, China, Japan. At Present the company is providing three primary customer sets; consumers, Sellers, and developers.
Amazon balances between the cost of distribution and levels of services by having efficient distribution centers and multi-tier inventory networks.
Case study on amazon.com's supply chain management practices | MBAtiousaneesh p
The case study provides an overview of Amazon.com's inventory management. Jeffrey Preston Bezos the founder of Amazon.com launched the company when he realized that Internet provided immense scope for online trading. Although the site was originally launched as an online bookstore it eventually offered several other products to keep abreast of the competition. The case study takes a look at the different products and features offered on the site. The case also discusses Amazon's value propositions and its criteria for choosing strategic partners.
I have participated in this presentation and it was a great work with indian Classmate, SCMHRD. Through this presentation you will receive information that how cobote works inside the company. you will learn more about the inventory system of the Amazon
Online Retailing, Amazon is the place where you can buy books or any other things through online. The case talks about EDN system which needed to be built by the Amazon's Europe to improve their business process in those Areas.
Amazon's European Distribution Strategy Case StudyYASSER ELSEDAWY
Amazon's supply chain challenges in Europe
Amazon.Com was launched on 16th July 1995 by Jeff Bezos. In the beginning, Amazon.com started as an online bookstore, With 25 million titles it became the earth's biggest bookstore but soon diversified. In 2008, Amazon had 8 warehouses in the U.S. and another 15 in the rest of the world. Amazon now has around 50 warehouses, 20 in the US and rest in Canada, France, Germany, Italy, UK, China, Japan. At Present the company is providing three primary customer sets; consumers, Sellers, and developers.
Amazon balances between the cost of distribution and levels of services by having efficient distribution centers and multi-tier inventory networks.
Case study on amazon.com's supply chain management practices | MBAtiousaneesh p
The case study provides an overview of Amazon.com's inventory management. Jeffrey Preston Bezos the founder of Amazon.com launched the company when he realized that Internet provided immense scope for online trading. Although the site was originally launched as an online bookstore it eventually offered several other products to keep abreast of the competition. The case study takes a look at the different products and features offered on the site. The case also discusses Amazon's value propositions and its criteria for choosing strategic partners.
I have participated in this presentation and it was a great work with indian Classmate, SCMHRD. Through this presentation you will receive information that how cobote works inside the company. you will learn more about the inventory system of the Amazon
Online Retailing, Amazon is the place where you can buy books or any other things through online. The case talks about EDN system which needed to be built by the Amazon's Europe to improve their business process in those Areas.
See how Amazon leverages its supply chain as a critical flywheel in its success. Included in the report are value chain analysis, inventory, transportation and fulfillment, cash conversion cycle, and fulfillment space.
This presentation covers a wide variety of topics such as:
- Brief History of Amazon
- Product, Customers, and Competitors
- Sourcing
- Manufacturing
- Layout
- Inventory
- Operational Strategies
By reading this presentation, you can be well-prepared for any operational management session.
This case study report is detail analysis of Amazon.com. The report describes the List of areas that
it has been working, the business models it has adopted and the various strategies that it has
implemented to make it one of the most successful E-commerce platform. This case study reflects
that using the strategies and model adopted by Amazon's can leads any other E-commerce site to get
successful. This case study also shows that how the different models and strategies must be
implemented with respect to the dynamic environment of the E-commerce.
See how Amazon leverages its supply chain as a critical flywheel in its success. Included in the report are value chain analysis, inventory, transportation and fulfillment, cash conversion cycle, and fulfillment space.
This presentation covers a wide variety of topics such as:
- Brief History of Amazon
- Product, Customers, and Competitors
- Sourcing
- Manufacturing
- Layout
- Inventory
- Operational Strategies
By reading this presentation, you can be well-prepared for any operational management session.
This case study report is detail analysis of Amazon.com. The report describes the List of areas that
it has been working, the business models it has adopted and the various strategies that it has
implemented to make it one of the most successful E-commerce platform. This case study reflects
that using the strategies and model adopted by Amazon's can leads any other E-commerce site to get
successful. This case study also shows that how the different models and strategies must be
implemented with respect to the dynamic environment of the E-commerce.
Amazon.com is an American international e-commerce company with headquarters in Seattle, Washington, United States. Founded in 1994, it is the world’s largest online retailer.
Strategies adopted by amazon during the recession along with generic business...Md. Nazmus Sakib
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Exchange Rate Overshooting and its Impact on the Balance of Trade for the Tur...Hüseyin Tekler
Exchange rate overshooting is the short run phenomenon under the Dornbusch Model presented in 1976. We are really desiderative to find out whether the overshoots are for the short run or for the long run period for the Turkish economy. The estimated result using the Johansen Julius method and VECM, we have found that overshooting is for the short run period as opposed to the findings of Bahmani-Oskooee & Orhan (2000) while the Purchasing power parity [PPP] does not hold for the Turkish economy.
A PROSPECTIVE STUDY ON FASTER AND MORE SECURE DOCUMENT TRAFFIC FOR INTERNATIO...Hüseyin Tekler
Blockchain technology has the necessary capability to facilitate the workflow of cross-border trade transactions, especially in the document approval processes. Blockchain technology is the basic technology behind crypto currencies like Bitcoin. The traditional method used to physically move large amounts of paper documents for transport operations by supply chains is very vulnerable to fraud, human error and accidental delays.
However, the administrative costs of processing, transporting, verifying and securing the documentation are also very high.
Traditionally, supply chains were based on the physical movement of large amounts of paper documents open to fraud, human error and involuntary delays. Blockchain can help to expand various international trade opportunities, often avoiding unnecessary processes, while successfully minimizing the high costs associated with international trade and operations.
International trade requires faster, safer and more efficient management of document approval workflows, which are needed to transport goods across international borders.
This study will cover how to make document traffic in international trade faster and more secure with blockchain technology.
Streamlining the Global Logistics Service Processes at Nanjing
Wangjiawan Logistics Center (WLC), a flow diagram of WLC’s business with Wal-Mart and Sharp, respectively.
Causes and possible consequences of the us china trade warHüseyin Tekler
When we look at the history of the known humanity, it appears that people started living in communities and that private property has emerged due to the progress of historical conditions. One of the consequences of this outcome is that world history is the scene of many wars and destruction. When it comes to war, it is armed struggles that take place between countries or political groups that come to mind first. Looking at this perspective, we see that the historical development process is also seen as the great majority of battles take place as physical battles, but it has become possible to say that, with great physical battles, technological and economic developments, sword-fighting and armed wars have begun to shift to economic and cultural wars. This new form of war has begun to take place on the stage of history on the basis of economic instruments. As an example of economic warfare, protectionism can be shown by countries in the direction of their own economic interests. It would not be wrong to say that the currency wars and the wars of trade that brought about by the protectionist policies of the countries, especially in the crisis period, will be the most important economic problem of our time. Throughout history, all wars have led to great destruction, and generally underdeveloped countries and poor countries have been affected by these destructions, and it is not wrong to say that the economic wars, as well as physical wars, will effect the least developed countries and the poor countries.
In this analysis, in the light of the historical background of protectionism, a trade war and the possible consequences of this war, which could be caused by the mutually elevated trade walls of the US and China, were examined.
People’s Republic of China which was founded in 1949 was in the position of a self-enclosed economy. Together with the economic reforms carried out in 1980s, China has entered into a transition period from socialist system to free market economy. Together with these reforms, China became a member of IMF in 1989 and World Trade Organization in 2001. As a result of these international expansion policies, the country takes the attention with its high growing rates and becomes the focus of the international capital. Especially after the country became a member in World Trade Organization in 2001, foreign trade volume has expanded and foreign direct investment flow is increased. Foreign trade reforms in China are analyzed in this study because of the outstanding growth in Chinese trade in recent years.
Franchising would seem a natural entry mode for Starbukcs, but the chain sometimes owns the shops even abroad. What could be the explanation?
Franchising has been part of the growth strategy for almost every restaurant chain in the world, including McDonald's, Dunkin' Donuts, Subway, and KFC. Franchising allows chains to open more locations, faster and with fewer costs for the company.
1 It's a system that has allowed McDonald's to open more than 37,000 locations 2 and Subway to open more than 44,000 restaurants worldwide. 3 And there are more than 62,000 frachised 7-11 shops around the World. 4However, despite having more than 24,000 locations worldwide, Starbucks has refused to franchise its standalone stores. Starbucks built a company-owned business strategy.
5To understand why Starbucks does not consider franchise, we need to understand the disadvantages of giving franchise. Here are a few key disadvantages:
6Decreased net receipts. You’ll make less than that of a company-owned store since you’ll only collect a royalty, which is a small percentage of the unit revenue.
7Independence of franchisees. The franchise owners aren’t your employees, and you don’t have direct management control.
8Difference in required business skills. You may have a different management style than the franchise owners.
9Costs can be high. The upfront investment to franchise your business can be substantial.
10As I said before, Starbucks built a company-owned business strategy.
This strategy gave them a chance to benefit from their partner’s entrepreneurship. They took advantage of stock options to encourage entrepreneurship, which worked well. 11 For example Frappuccino was developed by one of their store managers. They've gotten big, but They've stayed small-keeping their intimacy with their staff and customers. But if they were franchised they might not have the kind of local owners that have innovative minds
12There are a lot of advantages to the company-owned model. Starbucks created universal company values. They read the marketplace and turned on a dime. As a company-owned business, they did that. But if they are a franchised company, it is hard to made quick adjustments because there's an extra level of people in the business that they have to basically pass all the decisions through. And that can make these kinds of transitions harder. 13Being company-owned also allowed them to find significant new revenue sources without having to worry whether they might compete with your franchisees' businesses. They've created a major new revenue sources by selling bags of Starbucks coffee, bottled Starbucks coffee drinks and Starbucks ice cream in supermarkets. But imagine if they were a franchise. It would be difficult to sell products in supermarkets because most franchisees probably would see that as competition and they would not like it. In a franchise situation, there are a lot of prohibitions on territoriality and exclusivity.
1. Flag
By international convention, each vessel engaged in international trade must be registered in a spesific country, and therefore flies a spesific country’s flag. In many ways vessel is an extention of the territory of this country, and the flag state has the authority and responsibility to enforce regulations over vessels registered under its flag, including those relating to inspection, certification, and issuance of safety and pollution prevention documents.
Apart from that, the flag also determines the cost of operation and crew. The flag of developed countries tend to impose very substantial regulations on the way a ship is operated, in such areas as the composition of the crew on board, its minimum training requirement, its nationality, the work rules on board, the vacation time earned by the crew and so on. In addition, taxation can be significantly higher. In contrast, regulations and taxes for some developing countries are minimal. For example, operation costs of a cargo ship flying the US flag were 22.053 USD$ per day, whereas the same ship flying a developing country’s flag were 7.454 USD$ per day. Also same for crew cost, the US-flagged ship had to pay 13.655USD$ per day, but the foreign-flagged ships only paid 2.590 USD$ per day for 22 crew member.
These cost differences are also available for annual tax.
2. The term “flag of convenience” refers to registering a ship in a sovereign state different from that of the ship's owners.
Ships registered under flags of convenience can often reduce operating costs or avoid the regulations of the owner's country. To do so, a vessel owner will find a nation with an open registry, or a nation that allows registration of vessels owned by foreign entities. A ship operates under the laws of its flag state, so vessel owners often register in other nations to take advantages of reduced regulation, lower administrative fees, and greater numbers of friendly ports.
Countries attempt to influence, as much as possible, the flags of the ships that enter their ports. Although they cannot outright ban certain nationalities, they can prevent ships not registered in the country from carrying certain freight. Such as cabotage rules.
3. Shipping lines will charge container shipper either by published tariff rates or with negotiating contract rates with large volume shippers. Rates are determined per package or by weight, including cargo shipped in containers on a less-than-container-load (LCL) basis. In addition to the freight rate there are additional charges which the international logistic professional must be aware.
4. The Hague Rules of 1924 is an international convention to impose minimum standards upon commercial carriers of goods by sea. It restricts the liability of the carrier to SDR 666,67 per package or per customary freight unit. In 1968 the Hague Rules were slightly amended to become the Hague-Visby Rules.
2. China’s rise from a poor developing country to a major economic power in about four decades has been spectacular. From 1979 to 2017, China’s GDP grew at an average annual rate of nearly 10%.
According to the World Bank, China has experienced the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty. China has emerged as a major global economic power. For example, it ranks first in terms of economic size on a purchasing power parity (PPP) basis, value-added manufacturing, merchandise trade, and holder of foreign exchange reserves.
3.
China’s Economy Prior to Reforms
4. Prior to 1979, China, maintained a centrally planned, or command, economy. During the 1950s, all of China’s individual household farms were collectivized into large communes. To support rapid industrialization, the central government undertook large-scale investments in physical and human capital during the 1960s and 1970s. As a result, by 1978 nearly three-fourths of industrial production was produced by centrally controlled, state-owned enterprises (SOEs). A central goal of the Chinese government was to make China’s economy relatively self-sufficient.
5. The traditional foreign trade system was entirely unsuited to the opening of the Chinese economy to the outside World and the new development strategy that began to emerge in the late 1970s.
Decentralization of foreign trade
The central government, as one of its first steps to encourage the growth of exports, decentralized the authority to be into foreign trade transactions. In effect, it abandoned the monopoly on foreign trade it had exercised. In 1979 a dozen national foreign trade corporations processed all foreign trade transactions. By the mid-1980s the Ministry of Foreign Economic Relations and Trade had approved the formation of 800 separate import and export corporations, each licensed to engage in international trade transactions within specified product ranges. Only a few years later the number of trading companies had soared to more than 5,000.
New Forms of Trade
Even as the decentralization of foreign trade authority and the reduction in the scope of the state foreign trade plan proceeded, the state introduced new forms of trade primarily as means of promoting exports. Among the most important of these were export processing and compensation trade. These developments have led to the formation of free trade zones.
Import and Export License
As the scope of foreign trade planing shrank and new forms of trade expanded, the state instituted a system of import and export licensing to control the volume and commodity composition of trade. The main propose of the licensing is to control unplanned import financed through retained foreign exchange earnings. On the exports side, they were used to prevent 'excessive' exports of goods that remain significantly underpriced on the domestic market.
Nora – Sakari A Proposed Joint-Venture in MalaysiaHüseyin Tekler
Debate:
Equity Ownership
H: For equity ownership, our proposal is 30 percent for Sakari, 70 percent for us. Our proposal is based on common practise in Malaysia.
O: From our perspective, we propose 51% for Nora, and 49% for Sakari in order to have near equal rights concerning control. This will still let Nora to have bigger control but Sakari to have near equal rights.
H: We have a deal with TBM and we know this country, and its legal regulations. It is imperative that we have more control over the JV company. If we do not have enough control of JV company’s management the workflow will slow down, because you are not familliar so many things in this country.
O: It is in our understanding that we are the main provider of this new 4G LTE technology, its only right that we have a equal share of the equity.
Technology Transfer
O: We offer to provide basic structure and technology to be imported into Malaysia to be assembled at the site of Joint-Venture company as well as designated sites provided by TMB.
H: Basic structure of the SK10 base station should be developed at the JV company. Otherwise, It looks like (your requests indicate that) you're trying to use NORA as a assembling company. We want to establish a JV agreement, not a processing trade agreement
O: But you must also understand the the amount effort and capital invested into establishing our company, we have the right to protect our Technologies. In doing so, we are still are providing the JV company with all the necessary equipments and technology for executing this project.
H: If you agree to this agreement we are going to open the door of the Asian market to you. Moreover we give you the opportunity to reach the Japanese technology we have. You need to come an understanding for us to make a deal. We have good relations with the government and we will help you if you want to make further investmet in this country in the future.
Royalty Payments
H: Our proposal for 2% of net sales for royalty payment. Because we have to make other investments to support JV company, as we promised. We will rent a buiding and accommodate Office and base station plant. And we will also set up a new plant for antennae and amplifiers to supply JV.
O: We propose 5% of JV company Gross Sales. We are aware that accomodation and Office would be provided, we are grateful fort hat proposal. However, and again we are the provider of this new technology that needs to be introduced into the much needed market.
H: And I think you need to pay 2% percent royality fee to us, because you will access our advanced antennae and amplifier technology.
Our management team is considering investing in a foreign country and has requested a report regarding the attractiveness of alternative countries based on the potential return of FDI.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
India Orthopedic Devices Market: Unlocking Growth Secrets, Trends and Develop...Kumar Satyam
According to TechSci Research report, “India Orthopedic Devices Market -Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030”, the India Orthopedic Devices Market stood at USD 1,280.54 Million in 2024 and is anticipated to grow with a CAGR of 7.84% in the forecast period, 2026-2030F. The India Orthopedic Devices Market is being driven by several factors. The most prominent ones include an increase in the elderly population, who are more prone to orthopedic conditions such as osteoporosis and arthritis. Moreover, the rise in sports injuries and road accidents are also contributing to the demand for orthopedic devices. Advances in technology and the introduction of innovative implants and prosthetics have further propelled the market growth. Additionally, government initiatives aimed at improving healthcare infrastructure and the increasing prevalence of lifestyle diseases have led to an upward trend in orthopedic surgeries, thereby fueling the market demand for these devices.
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Business Valuation Principles for EntrepreneursBen Wann
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1. i
AMAZON.COM’S EUROPEAN DISTRIBUTION STRATEGY
By
Tekler Huseyin
IBW2017539015
A Term Paper
Submitted in Partial Fulfillment
of the Requirements for the
Supply Chain Management Course
for the Master’s Degree in International Business
at University of International Business and Economics, 2018
BEIJING, CHINA
Lecturer:
Prof. Dr. HONG Junjie
2. ii
ABSTRACT
Amazon.com, Inc., known as Amazon, is an e-commerce and cloud computing company based
in the United States. Founded on July 5, 1994, by Jeff Bezos in Seattle, United States. It is the world's
largest shopping site in terms of both total sales volume and market value. Considering that Amazon
sales thousands of kinds of products in many countries, it is clear that there is a need for highly
developed SCM. To start with, Amazon’s SCM has a strategic fit with its competitive strategy of
being the retailer of choice for its customers. The combination of multi-tier inventory management,
superlative transportation, and highly efficient use of IT, and its wide network of warehouses are all
geared towards aligning its SCM with its competitive strategy. In this paper, a detailed review of
Amazon's SCM will be made.
3. iii
Contents
I. Introduction 1
a) Development of the Internet 1
b) E-Commerce 1
c) Amazon.com 1
d) Major Products and Services of Amazon.com 2
II. Introduction of the logistic/supply chain of the company 3
III. Problem identification 4
IV. Solution/suggestion 5
V. Conclusion 5
VI. Reference 7
4. 1
I. INTRODUCTİON
a. DEVELOPMENT OF THE INTERNET
Since the first website was online in August 1991, the number of websites in the virtual world has
reached approximately 2 billion1
. According to the data of Netcraft, an internet monitoring company
operating in this field since 1995, the number of websites which was 97.9 million in October 2007
increased to 1 billion 935 million in November 2018. The milestone of 1 billion websites was first
reached in September of 2014, as confirmed by NetCraft in its October 2014 Web Server Survey and
first estimated and announced by Internet Live Stats. In August 1995, when Netcraft made its first
monthly research in this area, it was stated that there are 18 thousand 957 websites on the internet.
With the development of technological infrastructures, internet usage rates are increasing worldwide.
b. E-COMMERCE
Trade has been an important force for human life since the beginning of recorded history. The
adoption of the Internet by the masses has created a series of shifts in the way of doing things today.
One of the areas where these effects are most pronounced is trade. In the past 10 years, the emergence
of a new type of trade has been witnessed; purchase of goods by means of human-computer interaction
over the internet, namely e-commerce. The traditional trade of goods and money is losing popularity
and more and more businesses are jumping into the e-commerce wagon. Nowadays, the line between
e-commerce and traditional trade is becoming more uncertain because more businesses are starting to
integrate internet and e-commerce technologies into their business processes and continue to do so. E-
commerce is a modern business methodology that addresses the needs of consumers, traders and
organizations in order to reduce costs while improving the quality of goods and services by using the
Internet and increasing the delivery speed. With the development of E-commerce, many companies
have tried to sell their goods over the internet in many countries. However, most of them did not
succeed, but some of them have achieved great successes. Amazon.com is one of these successful
companies.
c. AMAZON.COM
On July 16, 1995, the official website of the Amazon.com website was opened. Amazon.com was
launched in July 1995 with a database of at least two gigabytes containing over one million books.
Every online customer is given a unique identity when he/she enters the site. As the client proceeds on
the site, everything he does is tracked, so Amazon.com webmasters can review that person's browsing
and buying habits. When Amazon.com started providing services, half of its customers preferred to
give their credit card numbers over the phone to buy books. The company initially estimated that most
of the credit card payments would be made by telephone, but most of the payments were made through
the internet even from the first days.
Amazon.com's timing is perfect because the 1995 article was an ideal time to launch a new
shopping site. If the site had been opened in the previous year, the personal computers connected to
the internet were insufficient that the company would not be able to survive, and if it had been a year
later, the competition would take its place. With improvements in web infrastructure in the summer of
1995, many major developments have transformed the web from a static online magazine or stall into
a more attractive and user-friendly interactive environment. In 1995, the Amazon.com website was
1
According to netcraft.com
5. 2
visited by 2,200 people a day, which is a very good penetration level for that period. According to
International Data Corporation, by the end of 1996, approximately 35 million people are using the web.
More than half of those who use the Web regularly have a university or higher education level; more
than 62 percent of Internet users worldwide earn at least $ 40,000 a year. This can be seen as a reason
for the success of Amazon.com. When the Amazon.com website was made available to the public use
in 1995, it became the only book retailer of Netscape and America Online websites. In 1998, Amazon
acquired Bookpages, Telebook, Internet Movie Database, Planet All, Junglee Corp. In 1999, Amazon
continued its expansion by purchasing shares of drugstore.com, HomeGrocer.com, Pets.com, and
Exchange.com. In 2000, Amazon established a strategic partnership with Toysrus.com, this was a sign
that the company was beginning to expand its range of services. Amazon opened its website in Canada
in 2002. Throughout 2003, the company increased its product variety to include 40,000 gourmet food
products, more than 60,000 pieces of jewelry and over 70,000 health and personal care products.
During 2004, the company has signed a strategic cooperation agreement with The Bombay Company
to establish new websites that will be powered by Amazon's eCommerce technology for the Bombay,
Bombay Kids, Bombay Outlet, and Bombay Canadian activities. In the same year, Amazon, Amazon
Services and American Express made a strategic agreement. This agreement provided American
Express owners with special benefits on the Amazon.com website. Also, in 2004, Amazon acquired
joyo.com and in 2005 acquired BookSurge. In October 2005, the company announced plans to open a
software development center in India. In February 2006, the company acquired Shopbop.com, a
retailer selling fashionable apparel, shoes, and accessories for women. In May 2007, the company
acquired the Internet's most comprehensive digital camera retailer and review website,
www.dpreview.com, again in the same month, it has acquired the largest independent audiobook
publisher in the US, Brilliance Audio (www.brillianceaudio.com).
Diagram1: Amazon.com’s Work Model (B2B2C)
d. MAJOR PRODUCTS AND SERVICES OF AMAZON.COM
Amazon.com, which has started to do electronic commerce as an online bookshop, has shown
great growth and development over the years. It has become a comprehensive web retailer with a wide
variety of product categories. In addition, it has started to operate with marketing, promotional and
web solutions services. The company's main products and services are shown in the table12
.
Products & Services
2
Source Amazoon.com Inc. Company Profile www.dataminor.com
SUPPLIERS AMAZON.COM
CUSTOMER
S
B2C
B2B
6. 3
1 Retail Goods
2 Amazon Prime
3 Consumer electronics
4 Digital content
4.1 Amazon Games
5 Amazon Art
6 Amazon Video
7 Amazon Business
8 Amazon Drive
9 Private labels and exclusive marketing arrangements
10 Amazon Studios
11 Amazon Web Services
12 New book content production
13 Donations
14 Amazon Local
15 Amazon Wireless
16 Amazon Fresh and Amazon Prime Pantry
17 Amazon Dash
18 Amazon Go
19 Amazon Supply
20 Video Direct
21 Amazon Music Unlimited
22 Amazon Tickets
23 STEM Club
24 Amazon Books
25 Amazon Home Services
26 Amazon Destinations
27 Handmade by Amazon
28 Amazon Inspire
29 Amazon Cash/Top Up
30 Merch by Amazon
31 Other services
Table1: Amazon.com’s Products and Services
II. INTRODUCTION OF THE SUPPLY CHAIN OF THE COMPANY
To understand Amazon.com's chain of tastes, we need to understand how the whole process is
strategically planned from the very beginning. The reasons for doing the Amazon establishment in
Seattle are as follows; It was a perfect experience for us. The second reason is that it is close to a large
book wholesaler.
Since its inception, Amazon has implemented a unique procurement strategy. In the first years of
its establishment, it sold 2.5 million different books and only 2000 of these were in the warehouse of
the Seattle warehouse. The rest is ordered by Amazon when it comes to the supplier. The book reached
Amazon's distribution center in two or three days. When orders started to grow, Amazon started to
work with publishers. But it was a week before the order came from the publisher. When the order
7. 4
reached Amazon, it took four to seven days to deliver to the customer. The company grew rapidly in
1996 and 1997 and maintained its service level with its infrastructure investments.
Increased distribution center capacity. A new DC was installed in Delaware. This significantly
reduced the delivery time of orders. With the increasing competition in 1998, the Amazon decided to
establish new distribution centers. But it was not necessary to get help on where these distribution
centers would be. For this, I2 Technologies used the Supply Chain Strategist software package. With
this software, the locations of DCs have been decided by considering customer, supplier, inbound and
outbound freight rates, warehousing expenses, labor, and other cost factors. After identifying possible
locations, Amazon narrowed its list of possible destinations by additional criteria such as tax rates,
unemployment rate, and distribution infrastructure. The next steps were to build a DC near Nevada.
Later on, they started to deliver to Chicago, St. Louis, Dallas and Minneapolis with DC he built in
Kansas. By 1999, three more DCs were opened in the Midwest and Southeast. This additional 3.2
million square foot distribution capacity costed $ 320 million to Amazon. But this gave Amazon the
opportunity to send a million more packages per day. According to Jeff Bezos, ‘’ This has been the
fastest expansion of distribution capacity in peacetime history.’’3
In 1998, Amazon.com entered the European market, targeting the two countries-the United
Kingdom and Germany-that represented both the largest online markets and the largest markets for
books in Europe. Germany, for example, had approximately 2,000 publishing houses, indicating the
significant role books played in German culture. In addition, other country-specific factors made these
country markets particularly attractive for Amazon. For example, German customers were accustomed
to buying books through mail-order companies. In the UK, the end in 1995 of government-regulated
fixed retail book prices and the consequent development of new distribution channels such as
Specialty stores had spurred remarkable growth in books sales. During its first years in Europe,
Amazon had faced several challenges that led to particular Operational and organizational choices.
The key to achieving international e-commerce success is understanding one simple fact:
customers everywhere want a better selection, more convenience, and better service. After recognizing
this fact, online retailers will soon understand that the major challenge to international expansion is the
ability to bring these universal benefits to customers around the world while honoring local customs.
As a result, Amazon recognized the European market as an aggregate of regional markets and chose to
fully comply with their legal and cultural specificities. In practice, this implied significant tailoring of
Amazon.com’s traditional value chain to local needs.
III. PROBLEM IDENTIFICATION
Despite the fact that Amazon was doing admirably in Europe however, the desire was high as they
had the aim to rehash the achievement of Amazon US in Europe as well. Anyway, they were defied
with some substantial difficulties from the European markets. These difficulties could be handled yet
to do that they required some extreme change in the methodologies that Amazon connected and
received in the US.
Sales regulation in Germany and France
Prices of books sold in Germany and France were determined. These prices cannot be
discounted. The sales model for the Amazon in the United States was to offer discounts on the prices
3
Amazon.com: More Than a Merchant, by Miguel Helf, The Industry Standart, 2000
8. 5
of the books they bought from wholesalers and publishers. They could not provide discounts from
wholesalers and publishers in bulk purchases.
Payment options
In Europe, more than 62% of customers used checks to shop. Amazon's core competence was
online retail sales; this meant buying online with a credit card. This was a huge challenge for the
Amazons because they did not have a brick or mortar shop where the concept of paying by check
could be.
Different supply market factors
In the US, Amazon heavily relied on book suppliers. However, in Europe, they experienced a
decline due to the lack of wholesalers and large suppliers. Although they could manage supply with a
handful of suppliers in England, none of them were in France. This forced Amazon to connect with
fifteen publishers for book supply.
Low EDI penetration in European countries
Amazon used EDI (Electronic Data Exchange) to communicate with supply chain management of
suppliers in the United States. This has greatly increased the efficiency of its supply chain. In the event
that a supplier has a stock from a particular item in the inventory, he or she may respond to the
Amazon in real time by refusing to accept orders from the customer. This allowed Amazon to
immediately return information about the inaccessibility of the product to the customer. However, this
wasn't used much because they used the concept of emailing and faxing in Europe, but there wasn't
any real-time data sharing type.
In addition to the above-mentioned difficulties, there were other difficulties. Amazon has
extensively relied on the national postal services in the relevant countries of Europe in which it
operates. But they were competing not only in other countries but in their own countries. This created
a challenge for the Amazon because there were many shipments between countries.
IV. SOLUTION/SUGGESTION
With the challenges to be kept in mind, there were a number of options for Amazon to solve these
challenges and make the solution to the European market increasingly expanding. These
recommendations require a radical change from the strategy followed in the United States.
V. CONCLUSION
I suggest that Amazon should integrate its European operations as a whole and accept it as a single
market. With that in mind they should follow the following steps to achieve this target;
1. Build an integration strategy for European sites.
a. DCs should articulate some contracts with local transportation agencies to ship its product to the
customers. At this point, the ownership of the product must be with the DC. This will prevent
problems in the context of accounting and ownership.
b. Analyze demand patterns, transportation costs and options, IT requirements and DC capabilities,
inventory costs, and transportation for various countries in Europe.
9. 6
c. In case customer places an order with multiple items spread across DCs,
d. Analyze past data, minimize this gap
e. Try to keep such cross-items together. This reduces the risk of making more than one shipping for
order and reduces the shipping cost.
2. Strengthen the UK’s purchasing team and collaboration of whole staffs. The UK procurement team
should be responsible for the entire EU network. Local dedicated buying team is a kind of replicating
inventory and creates a redundant staff. Purchasing large volumes of goods will give a negotiation
power to Amazon. It would facilitate global sourcing from lowest vendors and allow inventory
planning at the global network level. In addition, it is a good decision to switch to the ERP system and
increasing usage of EDI electronic data interchange so that the EDN system can progress in a stream.
3. Keep these 3 DCs, support them with EDN
4. Selecting appropriate DC to fulfill orders. Keeping the right inventory, at the right amount.
Although these three DCs are geographically positioned, they are still suitable for our strategic
planning. With a strong purchasing team and a strong central decision-making unit, DCs will keep the
right inventory in the right amount, avoiding unnecessary cost of inventory. By selecting the
appropriate DCs for delivery, the quality of the customer experience will increase.
5. Increasing the use of drop shipping, B2C. Drop Shipping should be applied in all product groups
that can be implemented considering the details such as delivery time and transportation cost. The
inventory load of DCs will be reduced. With more use of B2C systems, the delivery time will be
shortened and customer satisfaction will increase.
6. Use postal injection to reduce lead time. Delivery times can be shortened by postal injection. In the
future, if Amazon wants to increase its effectiveness in Europe, it will be able to make fast deliveries
to other European countries through postal injection.
7. In short-term train the workers for implementation of EDN. In long-term enjoy the EDN's returns.
In the beginning, the management should work to stabilize the EDN system, so that the employees
should work in collaboration and the problems that will cause the system to fail need to be corrected.
After the EDN stabilized, more savings can be achieved by reducing the number of employees.
Based on all the pros and cons of the above strategies, I can conclude that keeping the DCs in
each of the three countries in conjunction with an integrated inventory management system and
virtually having just a single distribution network allows us to collate the advantages of location and
lead time pooling without considerable increase in distances between customer and DCs combined
with a negligible decrease in service levels (lead times to customers). Thus Amazon will be able to
simultaneously exploit the commercial advantages mentioned above to the fullest, decrease inventory
to a large extent and reduce transportation costs drastically. Thus it would be advisable that Amazon
implements a Centralized management system in the UK along with the three existing DCs and a
common integrated IT interface.
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VI. REFERENCE
ÖZTAŞ, Şeyma. 2009. Branding Process of E-Commerce Companies:Amazon.com and
Yemeksepeti.com. Dokuz Eylül University, İzmir. 30 pp.
Amazon.com: More Than a Merchant, by Miguel Helf, The Industry Standart, 2000
"Amazon’s Distribution Strategy." UKEssays.com. 11 2013. All Answers Ltd. 12 2018
http://teacher.tcm.ncku.edu.tw/course_file/cases/amazon.pdf
Colby Ronald Chiles and Marguarette Thi Dau ‘An Analysis of Current Supply Chain Best Practices
in the Retail Industry with Case Studies of Wal-Mart and Amazon.com‟
www.dspace.mit.edu/bitstream/handle/1721.1/33314/62312050.pdf