Amazon Case
Using the framework provided by the Enhancing Competitiveness, Amazon’s business model are categorized into Customer Value Proposition, Profit Model, Critical Processes and Critical Resources.
With regard to Customer Value proposition, Amazon viewed fulfillment as a central driver of customer experience. In 1999, Amazon spent an extensive amount of money to open fulfillment centers across the US as it believed that to control the customer experience, it had to manage its own inventory. Apart from that, Amazon knew that it had to keep working on the web vision to enhance customers’ shopping experience.
The second model is the Profit model which Amazon dominates mainly consists of acquiring products from sellers and distributing it to customers with a relatively high profit margin. Also, a main portion of the profit comes due to the speed at which Amazon collects cash. The company received cash as soon as the customer ordered the item was paid only 75 days after collection from supplier, which allowed it to use the funds for few weeks. Amazon also expanded to other categories such as music, toys, video games, electronic products, tools and to its final product, the Kindle where there was a huge potential for profit.
The critical processes that Amazon took into consideration to keep customers happy was fulfillment of their shipments and dynamicity in expanding business to other countries. Since their shipments were not being delivered on time, they created their own inventories and made sure that the shipments were delivered on time especially during the holiday time. While expanding to other countries like Germany and China, they came up with country specific strategies that would help the customers in those countries as well as maximize their profits. They also tried to focus on Supply Chain management to take on the competitors such as Walmart.
The critical resources that Amazon banked on included the Brand, internal Infosystems