E-Commerce Business Model-Btechnd

E-Commerce Business Model-Btechnd

INTRODUCTION

E-commerce is business model that has significant contribution in growth and expansion of business operations using the internet tools. The mode of business has been changed as people are buying and selling the products and services though internet which seems more easy and profitable as well support to maintain the long terms relation with the customers. Report will explain benefits of e-commerce and analyze the process of business of Amazon that is using e-commerce platform more effective manner. Moreover, report will develop the security awareness for marketing department and evaluate the advancement in different countries in e-commerce business. At the end, report will discuss the potential of online website.

Which industry, in your opinion, stands to benefit most from e-commerce? Support your argument with few examples.

Trading of goods and services over internet is termed as E-commerce. With the emergence of technology, E-commerce has emerged as large part of business structure (Liang and Turban, 2011). The sales through e-commerce in UK constitute to 20% of total turnover of business.  The industry which has gain maximum benefit from e-commerce is retail industry.  The growth rate of e-commerce in retail market is 10 % annually.  It is expected to grow by 20% in near future (National Archives, 2015)
The increasing use of internet, mobile and laptops has induced the shoppers to buy through online rather than through traditional stores. Online retailing has become attractive because of its convenience, wide range of products and ease to shop.
The leading store-based retailers in UK are increasingly depending on internet retailing sales. Companies are investing in developing websites and mobile app to handle the traffic of online sales such as PC World, Tesco, Boots and Argos. Some companies such as John Lewis and Tesco have introduced click and collect service in 2015. The companies are able to cut price through internet to maintain interest of customers. The retail market of UK using online sale are clothing retailers, supermarket retailers and online shopping sites (Goldmanis.et.al, 2010). The clothing retailers are Arcadia Group, John Lewis, Next and TJX Europe. The supermarket retailers are ALDI, ASDA, LIDL, Sainsbury’s and TESCO. The online shopping companies are Amazon, ASOS, N Brown Group and Shop Direct Group.

Select a pure e-commerce company and analyse its aims, products / service, process and delivery agent, explaining the implications of having digitised each aspect.

Amazon is the largest internet based retailer in UK. It started from selling books online, later diversified into selling DVD, DC, MP3, video downloads, video games. Now it is also providing apparel, electronics, food, furniture, jewellery and toys.. Amazon has separate websites for UK, Ireland, US, Canada, France, Germany, Spain, Italy, Australia, Netherlands, Japan, Brazil, Mexico, India and China.  The aim of Amazon is to please and satisfy the customers and sell highest standard products. Amazon stores their products in mass warehouses and offer huge discounts.
Amazon uses innovative technology to simplify the entire process and delivery. The local companies act as delivery providers for Amazon to deliver packages from central location to its customer’s door (Huang et.al. 2010). Amazon provides delivery throughout the year, every day and every hour.  Digitalization is more than internet which includes exponential technology advances. Amazon use digital channels to drive conversation and engage with their key stakeholders such as suppliers, employees, partners and customers (Cloud, 2011).
Digitization helps in generating, sharing, processing and transacting information. It has boosted the sales of Amazon. It has improved the efficiency of business and cut the cost for Amazon. Amazon has benefited using digitization by Ad-words targeting millions of keywords, detailed approach to SEO, developed a simple experience for customers (Johnson,  2010), clear check out process and its own internal experimentation platform named we blab which is developed to evaluate the improvement in products and websites.

Can this company continue to exist in the long term

The business model of Amazon is designed from a long term perspective. The investment decision taken in Amazon is not based on short term profitability but long term perspective. For instance, Amazon has launched fire phone which provide 3D perspective of products. The performance of Amazon can be estimated on the basis of revenue per visitor which is shown in the given figure-
The strategy adopted by Amazon for long term sustainability is providing premium products at non-premium prices, providing customer delight and deep integration through all stakeholders. Amazon keeps customers at top their long term list. It even provides discount schemes for regular customers (Oster walder and Pigneur 2013). It provides the fastest delivery than its competitors. According to internet retailer (an e-commerce research firm), Amazon’s earning is far more than the next nine largest online retailers. As Amazon has prioritized customer satisfaction thus it can be longest-living online entities.  Amazon did not believe in moving from product to customers but they start from customers and then deliver the product they want.  Amazon has separate team for each venture and separate P & L account for them.

what will be implications for its stakeholders

The stakeholders of Amazon are investors, employees, and management and merchandise manufacturers. Amazon believes that providing more values to stakeholders bring market share, profit, sales and company image.  One of the stakeholders of Amazon is merchandise manufacturer. The lower cost of merchandise result into increased merchandise mark up, lower cost for Amazon, more sales and increased inventory. Apart from management, other stakeholders are not part of financial decision making but they influence the decision of business. If Amazon decides to reduce its inventory for a particular year then it will influence the shipping service provider companies.
Another stakeholder is customer and Amazon believes in providing best product as per the needs of customers (Hennig-Thurau.et.al. 2010). Amazon makes the shopping experience easier for customer by providing product review link, selecting product that best suits their needs and allows customers the option to compare. It also has provision for customer feedback to know the wants and needs of customers. This helps in forecasting the demand and making inventory related decisions. Another stakeholder of Amazon is their rivals. It is important for Amazon to improve business performance to compete with rivals. When an organization has stronger connection with local market and global business communities, it can provide better services to customers and increased profit and sales (Benlian and Titah, 2012).

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