Amazon.Com Case Study

1032 WordsAug 4, 20125 Pages
IT ELECTIVE (E-BUSINESS) Chapter 1 Case 1 AMAZON.COM Angeles, Catherine Marie Cabral, John Kevin Pangilin, Kristel Mae Sabater, Shenalou 1. New Jersey judge ruled that Amazon.com Inc. violated its agreement to give toy retailer Toys"R" Us Inc. the exclusive right to sell toys and baby products on Amazon 's Web site. In the ruling,New Jersey Superior Court Judge Margaret Mary McVeigh said Toys "R" Us can sever theagreement it signed with Amazon in August 2000, in which it agreed to sell toys on Amazon.com 'sWeb site, effectively putting Amazon in control of the Web address www.toysrus.com. The rulingpaves the way for Toys "R" Us to operate the Web site independently. Judge McVeigh deniedmonetary damages to both…show more content…
3. One possible recommendation is that Amazon could offer to only allow zShops that sell toys notavailable from Toys R Us. This scenario would allow Amazon to honor the exclusivity agreementwith Toys R Us, but continue to realize profits from specialty toy retailers. Toys R Us would benefitfrom this scenario because zShops would not be able to undersell on identical products. Also,consumers who go to Amazon searching for a specialty toy may end up ordering a toy from Toys RUs instead. Amazon should’ve negotiated instead coming up with penalty. Penalty which will make Amazon.com pay either cash or they will suspend the contract in few months. From this, it will avoid litigation and their contract as well as working relationship will continue. Another is coming up in a renewed agreement, which will specifically state that Amazon.com is not allowed to work with other toy retailer and if not met, Toys R Us must be paid in cash for breaking the agreement. 4. The partnership made sense at the first wave of E-commerce, but is no longer good for the two companies because the holiday sales fell well short of expectations and rival and category leader Best Buy surged ahead. It’s better to end the partnership seeing the effects rather than keeping the contract and both companies are no longer getting benefits from it. Amazon investors did not seem fazed by the development, with the e-tailer 's shares up about half a percent in

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