Amazon Case Solutions

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IE4906 AMAZON CASE STUDY ASSIGMENT SOLUTIONS 1- Amazon has been founded by Jeff Bezos with a mission to “use the Internet to transform book buying into fastest, easiest and most enjoyable shopping experience possible.” Amazon has managed to transform itself from online bookstore to one of the world’s biggest online shopping site. Amazon offers millions of new, refurbished and used items in different categories such as books, movies, music&games, electronics&computers, digital downloads, home&garden, toys, apparel, shoes etc. The mission statement has been also updated over the years with “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” Amazon offers the highest customer satisfaction and outstanding service levels to its customers. The main competitive advantage for Amazon is its distinctive procurement strategy which relies basically on wholesalers or publishers and keeps the inventory levels low. This enabled Amazon receive a 48% discount off a book’s cover price when buying direct from publishers and 41% discount from wholesalers. Moreover, keeping fewer inventories decreased the holding inventory costs significantly. Amazon used this strategy by sourcing its book orders first, and applied same procurement model to new categories launched such as music, video and DVD. Another advantage is the quickly increased selection of items. Amazon has thousands of items offered in different categories from toys and video games to MP3 downloads and collectible items. Moreover, shipping times can be another competitive advantage for Amazon. From its early times to present, Amazon gives big importance on fulfilling the customer order on time. Amazon invested highly on software developments (80% of the company’s investment)

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