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Porter - How do competitive forces shape strategy
Porter’s five forces model is used to analyze the competitive situation in an industry
Porter’s Five Forces Framework, first published by Michael Porter in 1979, is a tool that helps in analyzing the attractiveness of an industry in term...
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In this chapter the researcher is analysing the empirical findings by applying the theories of literature review. Consequently, this chapter will be helpful for writing the recommendations and solutions.
4.1 Porter’s Five Competitive Forces Analysis:
The manufacturing process in online book industry is relatively simple despite deploying a highly modernized technology which means to have fewer entry barriers. Moreover, the pages made by E Ink Corporation are electronically displayed on Amazon Kindle like in Sony e reader, irex, iPod etc. In this regard there is a huge challenge to persuade more book publishers so that more books can be accessed on the Kindle. However, due to being immature the E-book industry is facing uncertain pricing standards in the market and there is too much price distinction exists with respect to different models of e readers but the prices of Kindle is relatively higher than its other rivals such as Sony, Apple etc. Apart from that the e-book industry has been receiving very low customer support and the manufacturers are instead of growing their businesses always seeking to steal others customers. The bargaining power of supplier is mainly obtained from the accessibility to substitutes, number of suppliers, and the switching expenses to other inputs. Therefore, the Amazon Kindle involves two major inputs such as screen and system technology. E Ink Corporation develops the technology for the display of electronic screen on Kindle and for many other e readers. As the electronic paper is quite new in market which means there are not so many substitutes and firms in this field. Furthermore, it means E Ink possesses very little supplier bargaining power with respect to Amazon Kindle which might be changed...
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...ed in providing the latest titles of books Amazon has been following a unique strategy to offer a fully customized manner by launching its book searching tools and email announcements to its customers. Amazon is also confident to give satisfaction to its partner book retailers such as Barnes & nobles, Borders, and Google by complying with all legal formalities such as book conversion standards and media distribution criterion for preventing book piracy and substandard reading material. But, there is an imperative need to follow some effective ways of advertisement and consistent pricing strategy to confront its competitors. Despite all these, Amazon Kindle is suffering from some weaknesses but still it has been revolutionizing the book businesses and the reading patterns of its customers by preventing the book piracy in order to supply qualitative reading material.
The aim of this paper is to explore and critically analysing two research articles. The critical analysis will explain the importance of the study, evaluate design and research method used in those articles. To identify any gaps it will provide the literature review in those researches and possibility for the new study. The project plan, for the possible research will be developed on a potential gaps and the essay will finish with the conclusion.
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
To be selected for analysis in this review, the research must have been of great relevance to the topic, show a strong trend in the results, have a clearly structured argument and be considerably authoritative and credible; such that it has respected author/s.
Amazon used this strategy since its start up in order to attract a huge mass. Promotional strategy involves an agreement between two or more firms together with a long-term relationship. These allies connect their users to Yahoo’s websites, which helps promote its product (Johnson, 2010). The alliance in most cases benefits the both companies and gives them a competitive advantage over the other firms in terms of cost. Such kind of strategy occurred between Yahoo and Amazon where Yahoo provides direct connections to Amazon’s book titles from any yahoo search result. Yahoo users were invited to view and purchase books related to what they were searching on the web. Diversification strategy- Diversification of its product from CD/DVD to book markets has enabled the company to serve many customers from different market segments thus the company continues to expand via new customer bases (Jones, 2012).
Nodoushani, O., & Yang, C. (2011). E-Print industry and bookseller market: A Strategic perspective. Competition Forum, 9(2), 319-324. Retrieved February 24, 2012, from ABI/INFORM Global. (Document ID: 2548633731).
In the first stage Amazon’s main objective was to create a virtual bookshop, where customers could have more choices than any physical bookshop in the world, but also, he did not want to spend time and money on building warehouses and deal with inventory b...
Amazon has recorded a magnificent success in its business throughout the years that it has been in operation. It has attracted almost all people to use it when necessary. Amazon has built its success in business methodically and slowly. Amazon has made much success because of its ability to read market trends and diversify its operations. It started as an online book selling company. However, it changed its operations and started selling other products. Currently, many large retail shops use Amazon to host and power their websites, for instance, sears and virgin megastores. Amazon now attracts over fifty million visitors in a period of one month. Amazon has tried to make their services fit each individual user. It has based its services on the end user. It has shipping discounts, customer product reviews and a credit card with bonuses. It also has prime membership, product forums and 1-click ordering system among other services. The company has tried to make a remarkable experience for customers and visitors (Thomas, 2006).
Few other companies can compete with Amazon’s ability to use ecommerce to cut costs of manufacturing, selling, holding, and making its products as affordable as possible. This is an attribute that has become increasingly important to American’s as they try to recover the massive loss in average income that accrued during the recession of 2008 and 2009. In a scholarly article written by two University of Chicago economic students, Ethan Lieber and Chad Syverson, in 2011, “Online vs. Offline Competition” there is a comparison made by the competition for book sales with the traditional retail store Barnes & Noble and Amazon’s online book sales. In the article the two writers focus on Amazon’s ability to undercut Barnes & Noble’s costs due to their ability to hold less inventory, buy in bulk if needed, and have a lower employment cost per book sold. This was contributing to Amazon’s lead in book sales, becoming the “World’s Largest Bookseller” and current control of the book sales market. Another huge advantage that Amazon online sales has over retail stores is the absence in income tax due to having buyers adopt these costs while still keeping the price of the product lower. “Only when the online seller “has nexus” in the consumer’s state is the sales tax automatically added to the transaction price by the firm. (16, Lieber, Syverson)” This shows
In addition, Amazon has also given the customer the opportunity to sell goods. The customers have a huge amount of power when researching and choosing products of the thousands of products at the tips of their fingers. Amazon has just about every department of a store you can imagine, from gardening and lawn accessories, to kitchen machinery, to shoes, and to the strongest departments in my opinion, which is the reading and electronics. The book was the very first product and vision behind Amazon as Bezos “narrowed the list to what he felt were the five most promising [products to be sold via Internet]: compact discs, computer hardware, computer software, videos, and books…”: then deciding to create the worldwide selection and platform to sell literature in print. Little did Bezos realize at the time, that his print literature idea would develop into the foundation of the electronic department. This transformed into varying products and services to be offered to the consumers: from actual devices to purchase, to the Amazon exclusive “Kindle” E-reader and accessories, developing growth into the “Kindle Fire” TV, and the exclusive purchase of “Audible”, which is now an Amazon company audio book
One thing need to be improved is its pricing strategies. The company should avoid reducing price on every new version as it could affect customer expectation and product value perception. Customer-oriented pricing strategies can be used in the future to establish Kindle standard price. This could be achieved by understand how customer use the product, the product benefit for customers, and estimate all relevant cost and compare how the product benefits offset these costs (Shiu, 2011b). This is an important point to consider in order to achieve sustainable position as the leading innovative e-book reader in the market.
Now within the rest of this paper you will be finding a few different things getting discussed. Staring it off we will be discussing the articles that we have found to make our arguments and hypotheses. After wrapping up the literature reviews we will be discussing the hypotheses thus continuing onto our variables and indicators. Once we discuss our hypotheses we will be moving onto the research design. The research design will have our general issues, sampling, and methods.
Amazon is a growing and trending brand, giving consumers the unique shopping experience they have always wanted. The company that was started by 1999 man of the year, Jeff Bezos, has taken 44 percent market share in online sales and purchases. (http://bloomreach.com/2015/10/survey-amazon-is-burying-the-competiton-in-search/) That makes consumers more inclined to search for products through Amazon, before the well-known search engine powerhouse, Google. The Seattle, Washington based company was started in 1995. During the well-anticipated start-up, the company’s focus was on book sales online. Over time, Amazon has set many trends in Consumer Behavior, expanding products across every product pool imaginable. "Amazon.com puts the customer
Amazon’s customer philosophy can be traced from a letter extracted to the 1997 Annual Report that stated their focal points by offering customers products that they think is worth buying. Amazon tries to set apart their operations by suggesting extraordinary way in doing transaction and start by offering online books whereby they can get access to it anytime they want. Other value-added offers include 1-ClickSM shopping, customer’s gift certificates and immensely reviews, browsing options, content and suggested features. Amazon strategy focuses on reducing the price. Thus, increase the customer value. Amazon became the market online bookselling leader by encouraging customers repeating purchases through the advertising strategy that is proven effective which was word of mouth approach.
During the past few years, the publishing and reading world has been facing a veritable digital book onslaught. E-books have been outselling print books on Amazon since 2011 (Polanka, 7). While digital book sales skyrocketed, print book sales, especially those of mass marked paperbacks, diminished. Even the fact that e-books are not much cheaper than print books does not seem to interfere with the former’s popularity. It would seem that the age of print books is about to end, and quite soon.
Some years ago, with the arrival of digital technology, the process of reading has been changed to make it easier for everybody; therefore digital books are replacing the actual physical books. In spite of the fact that paper books and digital books are very similar in some ways, such as tittle pages, copyright page, covers, chapters or tables of contents; they present a visual and a sensory difference. In fact, they have a similar action that gives benefits but drawbacks at the same time. Paper books are tangible, accomplishment, easy to share; they have a unique aroma, and a sensitive side. But people should take in consideration that digital books are the better choice, because they are portable, convenient, cheap in price, and easy to manipulate, not to mention that anybody is able to have an bunch of them in only one file, either their phones or