Question

2) Select an e-commerce company & based on the information you found on their website, briefly

0. Describe their business model 15 pts.

1. Identify their customer value proposition 15 pts.

2. Identify its revenue model 15 pts.

3. Identify their main competitors 15 pts.

4. Identify their market strategy 20 pts

Answer 1

The company that I have selected is Amazon:

• Business model:

Amazon’s business model is such that it gives different retailers a chance to sell the products directly to the purchasers. Amazon’s accomplish less contacted things or those with high price tag enabling Amazon to abstain from holding moderate moving stock that can reduce their profits. Similarly, it doesn’t charge to list things that are available for purchase. It also retians a part of business costs as commission.

It also has a membership based model through its prime admin & little gadgets product offering. Under a prime record, clients pay an early expense to secure free two day or same day dispatch of products & have access to streaming media. The model creates income by offering its readers a digital book & mobile application.

• Customer value proposition:

• Convenience, speed & choice. They all result in unique proposition for the customers. The usage of app is very simple that just a click & customers are done with the order. They also have saved payment options, free shipping as a result of which there would be less abandonment of cart. All these facilities have been created for the convenience of the users.
• If the customer is sure of what he wants, the order can be placed in few minutes. Fast delivery is also an example of speed.
• There is also wide selection of products available for choice of the customers.

• Revenue model:

There are 3 factors responsible for revenue model of Amazon:

• Investment – Amazon is always sure of how much it costs to launch & sustain the business.
• Cost drivers – it has identified cost components that have impact on its cost structure. They have also disaggregated the cost data to uncover they key drivers.
• Revenue sources – it has also identified key revenue streams, size & importance of different revenue sources, then disaggregated revenue data to uncover key revenue drivers.

• Main competitors:

Following are the list of competitors in different areas:

• Ecommerce:

Alibaba is one of the major competitors. But if we consider only US, then Wal-Mart & Costco are the major ones.

• Traffic & online advertising:

In this case, Google & facebook are the key ones. Though they help Amazon to drag traffic to the site, they remain at the top.

• Cloud computing:

Microsoft & Google.

• Media segment:

EBay, Netflix, apple, time Warner cable & Google are the key competitors.

• Market strategy:

Their free shipping policy on certain bill amounts encourages the customers to purchase more. Other strategies like updating of inventory availability on regular basis, delivery date estimates, options for expedited delivery as well as delivery notifications & updated facilities. Another fun strategy is that to make the customers understand the service process, every employee spends two days every two years in the service desk.

Amazon prime is considered to be another powerful tool & also a powerful promoting device.