Advantages Of Amazon

Amazon.com has successfully managed to make its customers to feel that anything they could possibly want could be found on their website. Additionally, its products are marketed at a competitive price. Another important factor is their speedy delivery with their usage of UPS and FedEx (United States) and Royal Mail (United Kingdom). The company also caters for people that prefer online shopping with extra services such as Amazon Prime - a service with a yearly payment, customers are eligible for free next day delivery. Even though Amazon.com is known to be an online seller of most things, it still excels in its original market of book selling. Evidence of such is

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

Amazon Web Services is a cloud computing platform which was to provide online services to websites (Rouse, 2014). Amazon is comprised of software development and customer service centers around the world (Rouse, 2014). At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late and held to unreasonably high standards (Kantor & Streitfeld, 2015).

Amazon focuses on global reach, putting customer first,, and extensive selection of products through its vision which is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory 2016).

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.

Again, we start with the income statement, where total sales is the denominator in the vertical analysis computation. The first thing you will see is that while Amazon credits three quarters of their total sales to product sales, the service sales category rose nearly eight percent as a portion of total sales over the last three years. To the credit of Amazon, they succeeded in reducing the portion of sales eaten into by expenses from 99% to just under 98%, with the cost of sales decreasing at the greatest rate (among operating expenses). Turning our attention to the balance sheet, total assets (necessarily equal to total liability plus stockholders equity) acts as our denominator for the analysis. We note that current assets make up just over half of the majority of total assets while plant property and equipment still stands out as a momentous portion of Amazon’s worth. Concurrently, while the company’s short-term liabilities have shrunk as a percentage of total assets, their long-term liabilities shot up from 7.95% to 12.58% of total assets. Given an increased reliance on long-term debt, corporate accountants must pay close attention to when the debt will mature to ensure that Amazon can anticipate that expense and address it appropriately. Thanks to vertical analysis, this

Anderson, K. (2016, April 4). How is amazon able to offer products for much cheaper than a lot of other online retailers? Retrieved September 12, 2017, from https://www.quora.com/How-is-Amazon-able-to-offer-products-for-much-cheaper-than-a-lot-of-other-online-retailers

Founded in 1994 by Jeff Bezos, the company went online on the World Wide Web in July 1995.Amazon focuses on increasing its market share and revenues in the long term and maintaining competitive costs of profit margins and dividends paid to its shareholders in the short term. Amazon’s sound business fundamentals include its core business and essential revenue sector of e-commerce, a new focus on media independent of Kindle, improved profit margins from Amazon’s Web Services (AWS) as well as the management of a negative cash conversion cycle (Samonas, 2015).

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

The effectiveness of Amazon’s financial management can be seen in the performance over the last 5 years. Largely investor confidence has been very high throughout the 5 years analyzed. This can be seen in the increase of 4 times the stock price. Stock prices were at an all-time high the end of 2013 at price of $405USD each (Morningstar, 2014). Through analysis of the financial statements and history of stock prices it can be determined that the financial management team at Amazon is doing a great job.

     In my opinion the most important of these factors is the Supply Chain Management. If the customer is not able to get the product when they want it or the product is always sold out, they will go somewhere else. Wal-Mart has taken the role of

Organizations like Amazon store realized that attaining long-term customer value through delivery of quality services is the key to their existence. Also, be alert to the customer’s needs and wants, because having a loyal base of satisfied customer brings relevant performance indicators. For example, increase in sales improved profits, and possible higher market share (Shamma & Hassan, 2013).

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.

The company has many strengths. First, Amazon is the world’s leading online retailer. According to the 2016 Annual Report, Amazon had total net sales of US $135, 987 million in 2016. These total net sales include three segments which are North America, International, and AWS. Second, in comparison to many companies, Amazon has a superior logistics and distribution system, which allows the company to actualize improved customer fulfillment. Third, with its prolonged strategic drive on low-cost, differentiation, and focus, Amazon offers a wide range of product at low prices to customers. Fourth, Amazon enjoys global recognition from its customers. As stated earlier, Amazon built a strong brand in very little time. Finally, the

Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.