A case study of Amazon on its supply chain management

Amazon is a Fortune 500 e-commerce company based in Seattle, WA. It is one of the top companies that sells the most goods over the internet.

Amazon understood firsthand that the competitive advantage of a company originates immediately from how distinctive the organization's resources and competencies are. Amazon is able to both engage in production at a lower cost and generate a superior product at a standard cost. This is accomplished mostly via Amazon's strategy of having a wide variety of goods and competitive pricing. Customers know they can find basic products at slashed prices or high quality goods at standard prices and this is all achieved via the enormous range of products and product brands and types available on their massive marketplace. For example, the depiction displayed in the case study which shows how growth was related directly to: lower cost structure- lower prices customer experience traffic sellers -selection and convenience. While this is a grave oversimplification of the Amazon business model, it demonstrates how many aspects of the strategy reinforced one another.

The low cost product can also change customers buying behavior. Some customer who prefer to buy goods in the physical stores might decide to buy Amazon’s online product if they see it is in so low a price.

Also, Amazon has emphasized on building “several distribution centers around the world to hasten deliveries”(Hof and Himelstein, 1999). Coupled with its software it provides a “laser-like focus on the buying experience”(IT Business Edge, 2012). Such a system and service is what draws customers towards Amazon and subsequently retains them.

The two supply chains of Walmart and Amazon are different from each other and are efficient at their own perspectives. Both the supply chains are highly efficient in reaching out the customers in different ways. Walmart’s supply chain is completely based on store based retailing whereas Amazon’s supply chain is based on online retailing. The various methods followed by Walmart in its supply chain are vendor management inventory, cross-docking and central warehousing. Amazon acts as a retailer, as a third party and as an agent in supply chain management while selling various products through online.

Amazon is the world’s largest online retailer that was launched in 1995 (Rouse, 2014). Amazon was mainly a book selling company that has enlarged its’ business by selling a variety of goods. The company sells all types of technology devices such as cell phones, games, televisions, movies, cameras, computers,

‘We believe that the principal competitive factors in our retail businesses include selection, price, and convenience, including fast and reliable fulfilment. Additional competitive factors for our seller and enterprise services include the quality, speed, and reliability of our services and tools, as well as customers’ ability and willingness to change business practices’ (Amazon10-K report 2015).

The basic Amazon sales channel is the web store front- end which serves as their core business. Customers go to the Amazon.com website, browse products, and place orders. Amazon is responsible for all front-end customer relationships and back-end logistics in this model. Once an order is placed, Amazon decides which internal distribution center or drop shipper should be responsible for shipping the order to the customers. After that, Amazon will responsible for coordinating the fulfillment of the order. When products are sourced from its internal distribution centers, then Amazon start to picks, packs, and ships the order. When products are sourced from a drop shipper, such like a book distributor, the distributor packages the products by using the Amazon box delivers it to the customer (Maltz et al., 2004). This model requires Amazon to maintain or purchase inventory for immediate selling. In this model, Amazon owns the customer relationship, provides the technology, owns or purchases the inventory, and executes the logistics as well.

Providing customers more of what they want - low prices, vast selection, and convenience - Amazon continues to grow and evolve as a world-class e-commerce platform. “When you order products from Amazon, it arrives on your doorstep in two days, but people don’t think about how.” said George Prest, CEO of a logistics trade group.

Earlier, amazon don’t want to invest in the warehouses. But to do business, they had to invest in warehouses. So, they decided to invest in the warehouses. It was a costly decision. They had to spend $50 million for a warehouse and for getting that money, they issue bonds. Earlier, Amazon rate of return was only 0.25 % as compared to 30% for many online retailers. Amazon’s warehouses store millions of products. Their warehouses are also computerised. After Amazon faced lots of problems during catering the demands of customers during holiday sessions of 1999, they decided to change the inventories processes. They did it by changing the layouts of the warehouses. It also helped them to locate and ship products to

Every company has their own supply chain in order to sort or produce goods. However, the company needs to manage supply chain to maximize its highest benefits. By having effective supply chain management, the company can ensure that the right product or service will be available at the time to the right place and at the right price (Kamal 2007). Amazon is one of the companies that have best supply chain practices in order to respond high level of responsiveness for the customers. Thereby, this paper explains about Amazon Company, analysis of Amazon’s supply chain, recommendations and barriers to implement will be discussed.

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

This paper reviews the supply chain management practices of Amazon.com (AMZN) and highlights findings in the framework of a Strengths – Weaknesses – Opportunities – Threats (SWOT) framework.

With the proliferation of communication and information technology, particularly the Internet, most business organizations have been at the forefront to join the e-commerce platform. Amazon is considered as one of the existing and largest e-business platform in the world. This report outlines Amazon’s strategic intent and key resources and capabilities. In addition, the report will also include an analysis of the company 's assets and capabilities that have provided it a sustainable competitive edge as well as, the recommended future strategy of the giant online organization. Amazon defines its line of business operations based on product and service sales, fulfillment, digital content subscriptions, publishing, and co-branded cards. The company 's line of business is defined as an online store, Internet service provision, and the Kindle ecosystem. This project will explore the truth that has made the online company to be considered as the top online retailer, which mainly focuses on strategy. This report also outlines how inventories play a fundamental role in the organization 's business or corporate strategy. The other issues covered in the report include the approach used by the online company deal with the supply chain and the reason behind fast shipping fast. The paper will outline the finance statute of the company and whether the finance effect will bar the organization from developing in future. In order to achieve the answer to the questions

Jeff Bezos looked out the open doorway of his office and stared at the “problem of the day,” which his assistant Sarah had posted on the whiteboard in the hallway. It was Friday, September 13, 2002, and the whiteboard read: ”You have 10 bottles with 100 pills each in them. In nine of the bottles, each pill weighs 10 mg. In one bottle, each pill weighs 9 mg. These pills are poisonous. You have a digital scale that reads out in mg. Can you determine which bottle contains the poison with only one weight measurement?” Bezos—founder, chairman, and CEO of Amazon.com—normally enjoyed trying to solve these brainteasers. But today his mind