Essay Instructions: Attached is the assignment Task 1. Kindly do the following:
1. READ THE ASSESSMENT CRITERIA given below and try to answer the questions to meet the assessment criteria
2. Use practical examples and suggest clear recommendation inclined to meet the Assessment criteria
3. Also refer back to the case and the situation in the case
4. Proof read there should be no spelling mistakes
6 Follow the FORMAT which is very important. (Times New Roman 12)
7 Do not make a question answer issue - rather make it a report with heading of the question (eg. the report starts with an introduction or Executive summary then TOC - use word indexing - then body of the report do not cut paste any questions
8 The most important point _ DO NOT CUT PASTE anything from internet - PLAGIARISM
9. Have a conclusion and recommendations - Don't forget your body referencing and your end Bibliography. - USE HRS system of referencing
Learning Outcome 1
Understand the Value of an E-Strategy in Organizations
Assessment Criteria (AC) to Test Outcomes
AC1.1 - Explain the Benefits of Having an E-Strategy in Organizations
AC1.2 - Evaluate the Contribution of an E-Strategy to the Achievement of an Organization?s Objectives.
AC1.3 - Discuss How to Align an E-Strategy with an Overarching Organizational Strategy.
Tasks
Task 1 (1.1)
Task 1 (1.2)
Task 1 (1.3)
Learning Outcome 2
Be able to develop an e-strategy for an organization
Assessment Criteria (AC) to Test Outcomes
AC2.1 - Analyze the business factors that underpin the requirement for an e-strategy in an organization.
AC2.2 - Discuss the benefits of e-commerce to an organization.
AC2.3 - Develop a plan for an e-strategy that ensures an organization retains its competitive advantage in a global market
AC2.4 - Specify the technical infrastructure required in an e-strategy plan for an organization.
Tasks
Task 1 (1.4)
Task 1 (1.5)
Task 1 (1.6)
Task 1 (1.7)
Required Task 1: Leading E-strategy
Assessment and Grading:
This assessment is based on achievements in learning outcomes. In order to pass, all criteria identified in the assignment with reference to learning outcomes of the module must be met.
Word Count/Limit:
3,500 words (+/- 10%)
Please study the following case Study on Amazon available at http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/ or amazon.com and complete the following tasks
Amazon Vision & Strategy
?Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.? The vision is still to offer ?Earth?s biggest selection and to be Earth?s most customer-centric company. Consider how these core marketing messages summarising the Amazon online value proposition are communicated both on-site and through offline communications. Of course, achieving customer loyalty and repeat purchases has been key to Amazon?s success. Many dot-coms failed because they succeeded in achieving awareness, but not loyalty. Amazon achieved both. In their SEC filing they stress how they seek to achieve this. They say:?We work to earn repeat purchases by providing easy-to-use functionality, fast and reliable fulfillment, timely customer service, feature rich content, and a trusted transaction environment.
A good summary of the latest business model initiatives is available in this Amazon annual report summary for 2011. For Q4, 2010:
? North America segment sales, representing the Company?s U.S. and Canadian sites, were $7.21 billion, up 45% from fourth quarter 2009.
? International segment sales, representing the Company?s U.K., German, Japanese, French, Chinese and new Italian sites, were $5.74 billion, up 26% from fourth quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%.
Amazon performs exceptionally efficiently measured against revenue per visitor, which is one of the key measures for any commercial website, whether it?s a media site, search engine, social network or a transactional retailer or offers travel or financial services. Of course profit per user would be quite different due to the significantly lower costs of other .coms like Facebook and Google. Key features of our websites include editorial and customer reviews; manufacturer product information; Web pages tailored to individual preferences, such as recommendations and notifications; 1-Click? technology; secure payment systems; image uploads; searching on our websites as well as the Internet; browsing; and the ability to view selected interior pages and citations, and search the entire contents of many of the books we offer with our ?Look Inside the Book? and ?Search Inside the Book? features. Our community of online customers also creates feature-rich content, including product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby registries.?In practice, as is the practice for many online retailers, the lowest prices are for the most popular products, with less popular products commanding higher prices and a greater margin for Amazon.
Free shipping offers are used to encourage increase in basket size since customers have to spend over a certain amount to receive free shipping. The level at which free-shipping is set is critical to profitability and Amazon has changed it as competition has changed and for promotional reasons. Amazon communicate the fulfillment promise in several ways including presentation of latest inventory availability information, delivery date estimates, and options for expedited delivery, as well as delivery shipment notifications and update facilities.
This focus on customer has translated to excellence in service with the 2004 American Customer Satisfaction Index giving Amazon.com a score of 88 which was at the time, the highest customer satisfaction score ever recorded in any service industry, online or offline. Round (2004) notes that Amazon focuses on customer satisfaction metrics. Each site is closely monitored with standard service availability monitoring (for example, using Keynote or Mercury Interactive) site availability and download speed. Interestingly it also monitors per minute site revenue upper/lower bounds ? Round describes an alarm system rather like a power plant where if revenue on a site falls below $10,000 per minute, alarms go off! There are also internal performance service-level-agreements for web services where T% of the time, different pages must return in X seconds.
Visions and importance of technology
According to founder and CEO, Jeff Bezos, technology is very important to supporting this focus on the customer. In their 2010 Annual Report (Amazon, 2011) he said:
?Look inside a current textbook on software architecture, and you?ll find few patterns that we don?t apply at Amazon. We use high-performance transactions systems, complex rendering and object caching, workflow and queuing systems, business intelligence and data analytics, machine learning and pattern recognition, neural networks and probabilistic decision making, and a wide variety of other techniques. And while many of our systems are based on the latest in computer science research, this often hasn?t been sufficient: our architects and engineers have had to advance research in directions that no academic had yet taken. Many of the problems we face have no textbook solutions, and so we ? happily ? invent new approaches?? All the effort we put into technology might not matter that much if we kept technology off to the side in some sort of R&D department, but we don?t take that approach. Technology infuses all of our teams, all of our processes, our decision-making, and our approach to innovation in each of our businesses. It is deeply integrated into everything we do?.
The quote shows how applying new technologies is used to give Amazon a competitive edge. A good recent example of this is providing the infrastructure to deliver the Kindle ?Whispersync? update to ebook readers. Amazon reported in 2011 that Amazon.com is now selling more Kindle books than paperback books. For every 100 paperback books Amazon has sold, the Company sold 115 Kindle books. Kindle apps are now available on Apple iOS, Android devices and on PCs as part of a ?Buy Once, Read Anywhere? proposition which Amazon has developed.
Amazon Customers
Amazon defines what it refers to as three consumer sets customers, seller customers and developer customers. There are over 76 million customer accounts, but just 1.3 million active seller customers in it?s marketplaces and Amazon is seeking to increase this. Amazon is unusual for a retailer in that it identifies ?developer customers? who use its Amazon Web Services, which provides access to technology infrastructure such as hosting that developers can use to develop their own web services.
Members are also encouraged to join a loyalty programme, Amazon Prime, a fee-based membership program in which members receive free or discounted express shipping, in the United States, the United Kingdom, Germany and Japan.
Competitions
In its SEC (2005) filing Amazon describes the environment for our products and services as ?intensely competitive?. It views its main current and potential competitors as:
1) physical-world retailers, catalog retailers, publishers, vendors, distributors and manufacturers of our products, many of which possess significant brand awareness, sales volume, and customer bases, and some of which currently sell, or may sell, products or services through the Internet, mail order, or direct marketing;
(2) Other online E-commerce sites;
(3) A number of indirect competitors, including media companies, Web portals, comparison shopping websites, and Web search engines, either directly or in collaboration with other retailers; and
(4) Companies that provide e-commerce services, including website development; third-party fulfillment and customer-service.
It believes the main competitive factors in its market segments include ?selection, price, availability, convenience, information, discovery, brand recognition, personalized services, accessibility, customer service, reliability, speed of fulfillment, ease of use, and ability to adapt to changing conditions, as well as our customers? overall experience and trust in transactions with us and facilitated by us on behalf of third-party sellers?.
For services offered to business and individual sellers, additional competitive factors include the quality of our services and tools, their ability to generate sales for third parties we serve, and the speed of performance for our services
From Actions to Marketplaces
Amazon auctions (known as zShops) were launched in March 1999, in large part as a response to the success of eBay. They were promoted heavily from the home page, category pages and individual product pages. Despite this, a year after its launch it had only achieved a 3.2% share of the online auction compared to 58% for eBay and it only declined from this point. Today, competitive prices of products are available through third-party sellers in the ?Amazon Marketplace? which are integrated within the standard product listings. The strategy to offer such an auction facility was initially driven by the need to compete with eBay, but now the strategy has been adjusted such that Amazon describe it as part of the approach of low-pricing.
Although it might be thought that Amazon would lose out on enabling its merchants to sell products at lower prices, in fact Amazon makes greater margin on these sales since merchants are charged a commission on each sale and it is the merchant who bears the cost of storing inventory and fulfilling the product to customers. As with eBay, Amazon is just facilitating the exchange of bits and bytes between buyers and sellers without the need to distribute physical products.
Amazon Media Sales
You may have noticed that unlike some retailers, Amazon displays relevant Google text ads and banner ads from brands. This seems in conflict with the strategy of focus on experience since it leads to a more cluttered store. However in 2011 Amazon revealed that worldwide media sales accounted for approximately 17% of revenue!
Amazon Marketing
Amazon does not reveal much about its marketing approach in its annual reports, but there seems to be a focus on online marketing channels. Amazon (2011) states ?we direct customers to our websites primarily through a number of targeted online marketing channels, such as our Associates program, sponsored search, portal advertising, email marketing campaigns, and other initiatives?. These other initiatives may include outdoor and TV advertising, but they are not mentioned specifically. In this statement they also highlight the importance of customer loyalty tools. They say: ?while costs associated with free shipping are not included in marketing expense, we view free shipping offers and Amazon Prime as effective worldwide marketing tools, and intend to continue offering them indefinitely?.
Questions to be addressed in completing the Assignment tasks: 1
1.1 Explain the benefits of having an e-Strategy in organisation like Amazon? Critically evaluate using examples with particular emphasis on meeting strategic business objectives of Amazon? (Criteria 1.1)
1.2 From the information given in the case study evaluate contributions of an e-Strategy to the Achievement of Amazon?s objectives, analyse all the aspects in detailed manner?
(Criteria 1.2)
1.3 Critically analyse how the Amazon?s e-strategy is aligned with over overarching organisational strategy justify your statements with examples (Criteria 1.3)
1.4 Critically analyze the business factors that underpin the requirement for an e-strategy in the context of Amazon? (Criteria 2 .1)
1.5 Discuss the benefits of e-commerce to Amazon? As an e-commerce consultant proactively advise what are the future value additions (Criteria 2 .2)
1.6 Assume that you are heading the e-strategy initiatives at Amazon. Develop a plan for Amazon?s e-strategy to retain its competitive advantages in the global market place ? justify with relevant example (Criteria 2 .3)
1.7 Identify and conclude the technical infrastructure required for the strategy plan developed by you in task 1.6
(Criteria 2 .4)