The paper "Critical Analysis of an Online Business Model - Amazon. com " is a perfect example of a marketing case study. With the advent of amazon. com as an electronic retailer in 1996, a new world of e-commerce was created. Customers no longer needed to go to physical stores to make purchases of items such as books, electronics and jewelry, but could simply visit the online storefront of the retailer, select the item to be purchased and make payment via a credit card. The online store arranged to send the item purchased by the customer via courier and the sale was completed.
Over time more and more products have been brought into the realm of online sales and more and more geographies and customer segments are being served by this new sales channel (Malczewski, 2011). An eCommerce business replicates shopping experience at a physical store with shopping experience online. The first business model introduces by Amazon was the simple merchant model, in which a retailer puts its catalogue online and allows viewers to purchase the products. The customers make the payment via a credit card and goods can be delivered via a courier service.
Yet another variant of a traditional business model on the Internet is the so-called brokerage model in which the website involved serves as a middleman or broker and the buyer and seller access the website to buy and sell products or services. Background of the Organization Amazon is said to be the largest retailer available online in America. Initially, Amazon was introduced as an online book store. People all over the world got an opportunity to buy their favorite books and magazines quite conveniently from their homes with the most affordable prices and exciting promotions (Cossu, 2009).
However, as time passed by and Amazon became recognized among the customers, it diversified itself into selling various types of DVDs, types of video games along with different kinds of software. Moreover, Amazon is also known for its cloud computing services. As of now, Amazon offers a really wide range of product portfolio. It is now an online retail store which offers its customers with furniture and various kinds of different accessories which include electronic items, household items and kitchen accessories at the same time.
Considering the way Amazon progressed, one can easily realize the effort it had needed during its success journey. As far as the business model is concerned, Amazon follows the merchant model as well as an affiliate model. It follows the merchant model in the way that consumers can look at the variety of goods available and then shop by comparison. It follows an affiliate model by sharing revenue too. It offers a per cent-of-sale commission based on a user click-through in which the user subsequently purchases a product. The seven Ps of the marketing mix: Product: A well-known approach termed as ‘ working backwards’ is used by the company that allows it to first take feedback from the customers and then start developing a product.
In this procedure, the customer’ s opinions and feedback are given priority and their wishes that what they wish to see in Amazon’ s site list, are considered. With the help of this, the company is able to develop those products that are already wanted by the customers and this reduces the chances of loss.
Valuing customers when a product is to be developed in a company also helps the company to increase its customer attraction level providing a greater chance of earning higher revenue and also a higher customer preference level.
Baer, D., 2014. 5 Brilliant Strategies Jeff Bezos Used To Build The Amazon Empire. [Online]
Available at: http://www.businessinsider.com/the-strategies-jeff-bezos-used-to-build-the-amazon-empire-2014-3
[Accessed 15 December 2014].
Capriles, R., 2000. Leadership and Local Structures in the Amazon Region. Leadership & Organization Development Journal, 21(4), pp. 194-200.
Cossu, R., 2009. Driving Forces in National Waste Management Strategies. Waste Management, 29(11), pp. 2797-2798.
Davis, E., 2012. How To Develop A Strategic Plan. [Online]
Available at: http://www.bizmove.com/general/m6c.htm
[Accessed 15 December 2014].
eMarketer, 2011. Social media marketing. eCommerce Guide. Magento go. White Paper.. Optimizing the Ecommerce Experience. Trends for 2011.
Lee, C. & Fung, S., 2007. Online Social Networks and E-Commerce.
Malczewski, B., 2011. Amazon in Overdrive: Is there more to the Overdrive/Amazon Deal than Just the Kindle? . Journal of Electronic Resources Librarianship, 23(4), pp. 404-408.
Qiao, Y., 2008. Social networks and E-commerce. s.l.:Helinsky University of Technology..
Rad, A. e. a., 2011. A model for understanding social commerce. Journal of Information Systems Applied Research, 4(2).
Rappa, M., 2014. Business models on the web. Digital Enterprise. [Online]
Available at: http://digitalenterprise.org/models
[Accessed 16 December 2014].
Rigby, D., 2001. Management Tools and Techniques: A Survey. California management review, 43(2), pp. 139-160.
Swamynathan, G., Wilson, C., Boe, B. A. K. & Zhao, B. Y., 2008. Do social networks improve e-commerce?: a study on social marketplaces. In Proceedings of the first workshop on Online social networks, pp. 1-6.