Operation Strategy(Dell, Amazon.Com & Ibm)

6170 WordsSep 11, 201325 Pages
NIILM Center for Management Studies 2009-11 Rajesh Kumar Singh Roll No 29084 Production and Operation Management Assignment Question: Discuss operations strategies of three companies. Answer: Operational Strategy: Amazon.com Introduction: Amazon.com has become the largest customer friendly online retailer and provides one click purchase facility to its wide range of products including books, music, toys, gifts, electronics etc. For 2011 Amazon’s net sales documented the value of $48077 million to earn net income of $631 million (Annual Report, 2011). Currently, Amazon is serving more than 137 million of its customers with its 56200 employees all over the world. Moreover, International traffic also ranks Amazon at 16th…show more content…
This indicates that high activity will lead to low fixed cost per unit cost that Amazon can use to settle for low prices. So, this mass customization will also lead to high productivity that ultimately will optimize profits through decreased fixed cost per unit. Moreover, Amazon also reduces its costs through cross docking shipments. For instance Amazon place its different items like books, toys, electronic etc simultaneously in single order to the closest warehouse located near to customers. To do so, Amazon uses its “12 technologies” to optimize solutions and to predict demand. 3. Customer Fulfillment Network (CFN) Strategy: On the other hand Amazon has also adopted the customer fulfillment networking (CFN) strategy that emphasize to augment gross profit margins through purchasing books directly from publishers rather than involving distributors who add their profits. CFN strategy was developed to integrate customer relationship management and order fulfills management applications. CFN system compares customers’ demand with their capabilities to recognize that whether Amazon can fulfill their orders with reasonable profits or not. It also allows predicting dynamic demand that ultimately reduces the carrying cost and transportation cost at Amazon warehouse. Moreover, it also allows improving their cash flow as less cash is tired up in inventory and increase inventory turnover that ultimately augments firm’s profits. 4. Customer Centric Strategies: One can also

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