The Role of Information Management in Contemporary Business Organizations - Essay Example

Amazon was initially known to be an online retail seller of books (Noren, 2013). Eventually, Amazon expanded its strategy to include other products, such as movies, music, electronic gadgets, and household products. Moreover, the organization did not stop there. It was revealed that Amazon applied the retail strategy which allows other retailers to profit from every sale made. Likewise, based on historical evidence of revenues, slow-selling products would not be maintained in Amazon’s warehouses. As emphasized, “this strategy has made Amazon a leading long-tail retailer, expanding its available selection without a corresponding increase in overhead costs”  (Noren, 2013, p. 1).

      Concurrently, much like eBay, they directly share similarities in applying multi-business models as well as customer bases. The disparities in the application of business models were noted in terms of signifying that eBay used the auction approach versus the fixed price retail for Amazon. In addition, eBay did not have warehouses to stock the products being traded; while Amazon was noted to have initially relied on warehouses before expanding into another strategy termed cooperation: “collaborating with their competitors to evolve, grow, and survive” (Palmquist, 2014, p. 1). The comparative analysis of Amazon and eBay’s business models are summarized in the table below:

Comparative Details

Amazon

eBay

Business Models

Online retail (EC Applications)

Online retail (EC Applications)

Strategies Used

Fixed price retail

Auction approach

Customer Bases

Individuals, businesses, suppliers (E-Communities)

Individuals, businesses, suppliers (E-Communities)

Other services offered (E-Services)

Internet services such as Amazon Prime, Amazon Web Services  (Noren, 2013)

eBay Express, ProStores, Skype, PayPal, among others  (Jones, 2011)

E-Process

Payment and financial services; logistics

Payment and financial services (PayPal); logistics

E-Market

Advertising and promotions through Groupon and Living Social  (Jones, 2011).

Advertising and Promotions through Daily Deals  (Jones, 2011)

E-Infrastructure

Weblogs, system development, networks, and extranet to manage supply chain infrastructure of warehouses

Weblogs, system development, networks, and extranet

      From the findings, the ability of these organizations to utilize and manage information, using the online medium, facilitated the application of business models and strategies that enabled them to succeed. Both Amazon and eBay tapped opportunities in the external environment by matching the needs and demands of buyers (clients) to the products being offered by sellers. Their abilities and core competencies in minimizing the risks during the trading process assisted in their professional growth.

Conclusions and Recommendations

      In sum, Amazon’s information management was supportive of its unique e-business model and enabled differentiating it from competitors, specifically eBay. The organization has manifested core competency and competitive advantage in innovation, as its secret to success (Reisinger, 2014). Although it shared some similarities in the application of multi-business models using the online ail as it pits form, Amazon gained popularity and was able to differentiate itself through its fixed-price strategy, as well as its ability to offer other unique and innovative products, like the Kindle, which revolutionized reading online. As such, to sustain leadership in this particular field of endeavor, Amazon should assume a proactive stance in tapping opportunities in the external market, as well as in responding effectively to the strategies applied by its competitors in the online retail business.