COLLEGE OF BUSINESS ADMINISTRATION Supply Chain Management (BUSI 3322) Group members:- 200800688 Fatimah Al-Jomaie Fatimah Al-Jishi 200801136 Alia Alnujaidi 200800084 Section:- 201 Dr. Dalia Younis

Outline 1- Amazon.com history. 2- Amazon's mission. 3- Amazon.com strategy ,design, planning and operation. 4- Amazon. Com (push/pull process). 5- Amazon warehouses, why ,How many warehouses should it have And where should they be located? 6- Advantages and disadvantages of selling books via the Internet. 7-Why does Amazon stock bestsellers while buying other titles from distributors? 8-Does an Internet channel provide greater value to a bookseller like Borders or to an Internet-only company like Amazon? 9-Should traditional booksellers like Borders integrate e-commerce into their current supply? 10- For what products does the e-commerce channel offer the greatest benefits? What characterizes these product? 11- conclusion.

Amazon.com History Amazon.com was incorporated in 1994, launched web operations in 1995, and completed an initial public offering in 1997. It is been growing rapidly since its inception, and is currently the largest pure-play internet retailer Amazon Web Services (abbreviated AWS) is a collection of (remote computing services (also called web services Amazon Web Services provide online services for other web sites . Most of these services are not exposed directly to end users. Fatimah Al-Jomaie

Customers use Fatimah Al-Jomaie

Amazon's mission Amazon's mission is to offer "Earth's biggest selection" and to be "Earth's most customer-centric company, where customers can find and discover anything they want to buy." Specifically stated, their business strategy is to "offer customers low prices, convenience, and a wide selection of merchandise.” Fatimah Al-Jomaie

Amazon.com strategy ,design, planning and operation. *We recommend that retailers list as many products as possible on Amazon and seek to improve their pricing compared to the competition. Create a streamlined fulfillment strategy that delivers items as fast as possible to customers and speed up your customer service to prevent negative feedback providing as much information as possible. It means strategy process should include ( selection, price, delivery, convenience and information). Amazon.com design. *Design process must support strategy process objective. *Amazon.com utilizes technology innovation to differentiate itself on online customer Fatimah Al-Jomaie

Amazon.com strategy ,design, planning and operation. Amazon.com planning Forecast market, inventories, subcontracting of manufacturing. Amazon.com operation Make decisions regarding individual customer orders. Firms allocate individual orders to inventory or production Shipments, delivery schedules of trucks. Fatimah Al-Jomaie

Amazon. Com (push/pull process) Amazon.com is a business-to-consumer (B2C) website that ships product directly to individual customers that purchase through an online store. The target customer is a well-informed shopper, with internet access, that values selection, convenience and price. Distribution Process The distribution process is initiated by a customer ordering from the Amazon.com website or an affiliate website. Amazon.com IT systems determine which Amazon.com distribution center to ship the item . The order sourcing decision is determined by product availability and the desire to minimize transportation costs in fulfillment costs. and deliver it directly to customers. Amazon.com distribution centers can ship items directly to customers or through transportation hubs Fatimah Al-Jomaie

Amazon Warehouses Why ?? Amazon is building more warehouses as of now there are many customers all around the world. Thus, to fill their customer orders needs to have many warehouses from where the goods can be delivered as soon as possible. They have to have someplace to store things. A warehouse is much better than piling things up in the .street or in a parking. Fatimah Al-Jomaie

How many? Where? Scale economy Strategically arrangement Convenient communications Renting cost Where? Amazon has many warehouses but has none in CALIFORNIA since the taxes are very high. The location of the warehouse should be somewhat near to the airports, railways etc. From where the transportation can be easily and effectively done. Fatimah Al-Jomaie

Advantages selling books via the Internet Selling books via internet have a very broad base and a huge target audience. This business is increasing at a very rapid pace. Advantages *Reduce physical and administrative cost .*Fulfill various customers' needs *Online bookstore is able to provide more categories than traditional store .*Build up database system *Online bookstore can analyze customers need through their purchase history .*Easy to search .*Develop additional channel for customer to see the product * Save time * millions of books on the internet which are available for free Fatimah Al-Jomaie

.Inability to feel the physical* selling books via the Internet Disadvantages Privacy problem* *Payment security .*Gap in perception .Inability to feel the physical* *Can not fulfill real-time requirement Fatimah Al-Jomaie

Amazon always stocks bestseller while buying the other titles from distributers directly when it s needed… BECAUSE … Costly: Other titles will cost high for remaining in stocks without buying them; however, Best Sellers are lower cost because of the very fast selling “ not remaining in stocks” Taking place: Other titles take place for unknown limit of time which could be for a long period; however, Best Sellers’ turn over is moving more are faster. Fatimah Al-Jishi

Relating to place and cost of Best Sellers, what will be shown here is how the team work so products will reach Best Sellers rank… Amazon team of product managers, designers, buyers, and merchandisers builds and launches new product categories and stores around the world as it offers customers greater selection, lower prices, more in-stock merchandise, and a best-in-class shopping experience. Fatimah Al-Jishi

Operations and Customer service During the 2010 holiday season, amazon’s fulfillment centers shipped to more than 178 countries worldwide. Their operations teams oversee and operate all aspects of supply chain management, fulfillment, transportation, and customer service. People on these teams range from optimization specialists and business analysts to fulfillment and customer-service managers and associates. Regardless of their role, however, they're completely focused on meeting individual customer promises every day, around the globe. Fatimah Al-Jishi

Product and Services Retail Goods Amazon product lines include books, music CDs, videotapes and DVDs, software, customer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, and groceries. The company launched amazon.com Auctions, a web auctions service, in March 1999. However, it failed to chip away at the large market share of the industry pioneer, eBay. Later, the company launched a fixed-price marketplace business, zShops, in September 1999, and the now defunct partnership with Sotheby’s, called amazon.com, in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. Today, Amazon Marketplace's main rival is eBay's Half.com service. Fatimah Al-Jishi

However we found out that… In fact, Amazon’s unit prices are 11% higher than Borders’s unit prices which provides some indirect evidence of product differentiation. However we found out that… The bookseller Border which has an internet channel provides greater value than internet-only company like Amazon because it also has a store not only the online site, so people buy from border’s stores and online which make a very high profit. Fatimah Al-Jishi

Should traditional booksellers like Borders integrate e-commerce into their current supply? E-Commerce: is a type of shopping which a customer can purchase selling products with the help of internet Traditional Commerce: is also a type of shopping which a customer can directly purchase selling products Alia Alnujaidi

Easier for a customer to buy their products. More profit. Reasons why traditional booksellers should integrate e-commerce into their current supply? Easier for a customer to buy their products. More profit. Marketing and advertising. Portable library. New technology. Alia Alnujaidi

For what products does the e-commerce channel offer the greatest benefits? Digital books Video games Music Movies Alia Alnujaidi

What characterizes these products? They don’t take up physical space Delivery on the spot Cheaper Alia Alnujaidi

Conclusion By the end of this presentation you should able to know the success of Amazon.com is a result of the following key factors: *A strong, focus , visionary and stable leadership.. *expanding the business to different locations *Technological innovation and development *Diversification of products Amazon became 'everything to everybody *Globalization of business; opened websites in France, Japan, Canada and other big markets and Built unique software technology to drive delivery of products and services markets Fatimah Al-Jomaie

References http://en.wikipedia.org/wiki/Amazon.com http://askville.amazon.com/advantages-selling-books-internet-provide-traditional-bookstore-disadvantages/AnswerViewer.do?requestId=86504581 http://wiki.answers.com/Q/What_advantages_of_selling_books_via_Internet http://jobsearchtech.about.com/od/companyprofiles/a/Amazon.htm http://www.heinz.cmu.edu/~kclay/papers/retail.pdf  http://www.amazon.com/gp/help/customer/display.html/ref=hp_search_request

From slides(3-12) and slide 22 Group members:- 200800688 Fatimah Al-Jomaie From slides(3-12) and slide 22 Fatimah Al-Jishi 200801136 From slides(13-17) Alia Alnujaidi 200800084 From slides(18-21)