Jeff Bezos and the Rise of Amazon.com
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ScribdTranslationsJeff Bezos and the Rise of Amazon.com
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ScribdTranslationsCase summary
Jeff Bezos worked on Wall Street. He was a 30-year-old executive who had
educated at the prestigious Princeton University. During the first part of his
career dedicated to various business areas related in one way or another to the
technology.
At some point, Bezos saw very clearly that the Internet was going to change habits of
consumption of the general public. That was something that was happening before their eyes and wanted
to be a key part of that paradigm shift.
Thus, he decided to bet heavily on the online sector. He left his well-paid job and
he played everything by setting up an online bookstore (including his parents' savings that
they were the ones who financed this adventure.
Bezos founded [Link] with a simple idea: to use the internet to transform the
book purchasing in the simplest, most enjoyable, and fastest experience possible. The company
it was established as a corporation in 1994 and opened its virtual doors in July of
1995, when I created the virtual bookstore [Link], his new company changed to
completes the nature of the environment. Previously, book publishers sold their books to
wholesalers who in turn distributed to small bookstores; or directly to large ones.
chains such as Barnes & Noble or Borders, or to book clubs of the month.
There were so many book publishers and so many sellers that the industry was relatively
stable, with large and small bookstores enjoying a comfortable niche in the market.
In this relative stability, the uncertainty of the abundant environment was low and all the
companies enjoyed good income and profits.
Amazon is the largest online shopping platform. It began by selling
books and, a few months later, its market covered more than 45 countries; currently, it offers
all kinds of products, from clothing, makeup, and household items to bicycles,
productos tecnológicos y comida. Además, cuenta con un servicio de almacenamiento
online that many companies use like Netflix, Airbnb, and AOL
Relevant aspects
Initially, Bezos wanted the company to be called Cadabra in reference to the
abracadabra word, but he regretted it when someone confused the name with the
word corpse.
The first item Amazon sold was a book titled Fluid Concepts and
Creative Analogies by Douglas Hofstadter in 1995.
3. Its logo, which is the word Amazon with an arrow that goes from the letter 'a' to the letter
The "z" seeks to convey that the store has everything you need, from "a" to "z".
In 2012, the website went down for 49 minutes; this caused the
the company lost 5.7 million dollars in sales.
The size of Amazon's warehouses is equivalent to 700 Madison Square Gardens.
• Customer analysis: The customer can enter the site basically for two reasons:
curiosity or to search for a specific book, for the former organized a bookstore
very similar to those found in a physical bookstore, where they can be placed
news, special books and others, and for the second ones, they created a search engine.
very quickly, so that by simply typing a word that they remember from the book, it can
they throw multiple options, which will allow you to read a brief synopsis of them.
• Shopping experience: Amazon was the first to explicitly number each
he/she moved from the purchasing process and accompanied the customer to tour them.
• Payment method: It was the first online sales company to accept the card
credit as a form of payment, explaining in detail how to do it.
• Customer service: Amazon was the first online company to understand that
customers like to receive proactive announcements by email about what they are
searching.
Suggested or to be carried out strategies
At the forefront of the enormous growth of dot-com companies, Amazon sought a
fast and significant growth business strategy. Sales are
increased rapidly and Amazon began to add other products and services,
in addition to books. In fact, Amazon defined its goal to be the most
customer-oriented worldwide, where consumers can find and
discover everything they could buy online. Today, Amazon claims to have the 'variety
Earth's Biggest Selection of goods and services, such as books,
movies, music and games; digital downloads, Kindle, computers and items of
office; electronic devices, household and garden items; food, health products
and beauty; toys, items for children and babies, clothing, shoes and jewelry, items for
sports and outdoor activities; tools and products for automobiles.
[Link] electronics got into buying and selling books, changing everything:
• Offered customers quick access to over 1,500 books in print and made
price discounts, this gave it a high level in industry competition and its
it made the book industry environment poorer.
• He also negotiates with the major publishers about prices and supplies because
he wanted to bring books quickly to his clients, this increased the complexity of the
environment: all parties involved – publishers, wholesalers, warehouses, and customers – were
more closely related.
What happens after placing an order on the Amazon website until before
Does it arrive at the client's door?
A lot! [Link] has seven huge distribution centers where
stores inventories of millions of products. This is one of the key differences.
between [Link] and its competitors: that in reality the company has stock of
its products. Thus, Amazon must manage the flow of such items from its 15
millions of suppliers to their distribution centers, and the orders of the
clients, from distribution centers to the home or office of consumers.
Resolved questions
1 How do supply chain management activities
and logistics of [Link] help the company generate value for its
clients?
Amazon stores inventories for over 2.7 million in its seven different locations
strategically located distribution centers. Amazon has software that
allows suppliers to have more accurate data on purchase levels by
region, which allows for shorter delivery times and for orders to be delivered
correctly, for suppliers this represents shorter times which
reduces waste and also reduces delays in order fulfillment.
What systems did Amazon develop to improve the flow of products from the
suppliers to their distribution centers? What systems optimized the flow of
The orders from the distribution centers to the customers?
Amazon uses software to more accurately forecast shopping habits.
by region, thus allowing its suppliers to have better information
about the delivery dates and volumes. This reduced delivery errors since a
12% to only 4%. They have also made social media their
most used tool for two-way information distribution of the
company. This way they manage to work in real time with clients, being able to
manage orders more efficiently, with cost reduction and in a timely manner
reduced.
It is inferred that Amazon has an ERP system (PLANNING SYSTEMS
OF BUSINESS RESOURCES) that distributes information to all
involved departments, allowing for greater synchronization in their operations. These
They are responsible for labeling and sealing all the packages after they have been introduced.
in a box. Following this, a network of trucks and distribution centers take care
to complete the process.
3. Why supply chain and logistics management
will play an important role in the future success of [Link]?
A large part of Amazon's success lies in its expert strategy
storage, which ensures that products are easily accessible from almost
everyone.
All of the company's warehouses are strategically located near
large metropolitan areas and population centers, and the inventory is distributed among
they to ensure that the supply can meet the demand. There are even mini-
warehouses in smaller areas to ensure that orders can be shipped and
to give in quickly, regardless of what is bought.
Current research
The multinational Amazon, led by Jeff Bezos, practically doubled its
profit between April and June with earnings of 5.243 billion dollars, after
shoot up its billing by 40%, to 88.912 million, and despite the strong increase in
operating costs, which amounted to 83.069 billion.
Bezos noted that sales have continued to increase in this second quarter.
unusual and emphasized that it has invested about 4 billion dollars to cover costs
related to the pandemic to protect both employees and
consumers in 'times of high demand'.
The e-commerce giant has not only benefited from the increase of
online shopping, as its cloud services platform, Amazon Web
Services (AWS) have seen great demand due to telecommuting and increased their
billing nearly 29% year-on-year, reaching 10.808 million. In the first half of the year,
the company has already accumulated a profit of 7.778 billion dollars (+26 %) and a
billing of 164.364 million (+33 %).
Table 1.
Source: [Link]
%[Link]%2Fcincodias%2F2020%2F05%2F01%2Fcompanies
%2F1588360448_615537.html&psig=AOvVaw2s6U9AQjExhkc_kuv1ISD9&ust=1598
458272405000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCKjI5aHftusCFQAA
AAAdAAAAABAD
Conclusions
In conclusion, we have to say that supply chain management is a new
approach with strategic implications for companies beyond logistics
Integral. Its success will depend on the ability to efficiently meet the demands.
of the clients.
The traditional supply chain consists of a logistical structure.
decentralized where each member makes their decisions independently of others
decisions made by their partners. Companies make operational decisions to maximize
their local objectives and therefore place orders based solely on their
own inventory level without considering the situation of the other members.
Bibliography
Plancarte. (2019). [Link]. Recovered de:
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Portfolio. (2020). The coronavirus boosted Amazon's profits. Retrieved from:
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the-profits-of-amazon-apple-and-facebook-543232
Simoes. (2019). Supply chain. Retrieved from:
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