Amazon: Online Shopping and Amazon.com

1873 WordsNov 25, 20148 Pages
BINS 7250-01 Strategic Management of Information Systems and Technology Fall 2014 CASE ANALYSIS INSTRUCTIONS – AMAZON.COM: BRINK OF BANKRUPTCY (Points: 100) Due: Sunday, September 17, 2014 before 6:00 p.m. Write a 1-page, single-space, 10-point font case analysis on the Amazon Case making sure to address the following questions: 1. On a scale of “1” (Very Poor) to “5” (Excellent), how would you rate Jeff Bezos as an entrepreneur? How would you rate him as an IT manager? 2. Trace the evolution of the Amazon.com business from the company’s launch in 1995 to the dot-com collapse in 2000. How did the company’s strategy change over time? How did capabilities evolve? What value did the company deliver to all stakeholders? 3. Do you…show more content…
The company also created a barrier to entry by being the first large online bookseller. Since its incorporation in 1994, Amazon’s business model had expanded from offering a simple internet marketplace for books to providing web services to online retailers, storage solutions and a dramatically expanded product line. Nevertheless, despite massive sales the company failed to produce a profit for shareholders and Amazon was on the brink of bankruptcy at the beginning of 2001. If I were a shareholder who received the company’s 2000 annual report, I would have strongly agreed with CEO Jeff Bezos that the company must achieve profitability by year-end 2001. I would recommend that the company accomplish this by cutting costs related to fulfillment and inventory and by increasing revenue by capitalizing on the previous year’s investments in infrastructure. While many expenditures in 2000 were related to Amazon’s efforts to implement its strategy for growth, operating costs had also increased. Amazon’s fulfillment costs were 11 11% of sales in 1997 and 1998, increased to 14 14% in 1999. Because e-Commerce was still new and just beginning to establish customer trust, it’s critical that these costs be reduced without negatively impacting quality, speed of delivery or customer service. Because of Amazon’s large scale and repeatable processes, I would recommend a continuous improvement strategy such
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