1. Choose one of the top 10 most innovative Companies attached.
2. Show and explain the innovation of the company those on
c) the product / service
d) business model
3. Make suggestions or predictions of future innovations to the company concerned.
The company is have chosen is Amazon.com which is an American based multinational electronic commerce company which is headquartered in Seattle. The company was started by Jeff Bezon in 1994 and is the largest online retailer today. It initially started out as an online book store company and now is the biggest online retailer. The name was found in a quite unique way. The founder Jeff Bezon wanted his name to show up first in alphabetic order so he figured that alphabetic order was the way to go, the fact that it initially was founded as a bookstore also helped of course. After brainstorming a while for names which would be unique and catchy he came up with Amazon. The amazon is a river in Brazil and one of the largest rivers in the world. Because it sounds exotic he figured that this name was one of the best for his online book retail company because he wanted it to have the sound that people could get all their kinds and types of books instead of a regular bookstore which only has a certain amount of books avaiable.
I stated before that Amazon.com is the world’s largest online retailer in the world. Therefore it has several offices fulfillment centers, customer service centers and software development centers all across North America, Latin America, Europe and Asia. As might not be surprising during the Christmas holiday seasons as well as Easter and Valentine’s Day a lot of people visit the website of Amazon therefore Amazon invests heavily in more server capacity for its websites. In 2008 Amazon.com attracted 615 million visitors in total.
What is also a new technological innovation for Amazon is that it is cooperating with third-party sellers. 40% of its sales are coming from the “Amazon Association”. Which is basically affiliate marketing. This Affiliate Marketing is based on a system of commissions paid to the Amazon Association by referring customers to Amazon through links on their website. The great advantage of this is that there now is a homogenous payment system for all these transactions.
When talking about the Amazon catalog we are speaking about the the Amazon Web Services (AWS) XML service. Furthermore Amazon also uses targeting very well to its advantage. In this process Amazon is able to remember pages which a customer visited before. Based on this information they remind the customers of products they search before and then the likelihood of a purchase is greatly increased. Furthermore the products sold on Amazon.com are ranked by their popularity. This allows the increase of sales of certain products on the website because their exposure to customers is now greatly increased.
“Take it easy”. This could be the slogan of the website because the website is designed in order to try making everything as easy as possible for the customer. For example when you enter the website you can immediately choose one of its categories to find the product you want or use the search function which is similar to google to find the product. After selecting the product of your choice you can review the current amount of products in your in the shopping cart and after that you can proceed to paying your purchases. What makes this product unique is that Amazon gives you tips for all the steps which makes the process easy for every customer, even new ones. Another good function is that amazon lets customers rate the entire process, so products, services and even suppliers.
What is another great addition to make the process of Amazon easy is the so-called “search inside the box” where customers can look up keywords inside of many complete books and e-books. One might think that this could imply copyright issues with the authors of books however Amazon just provides pictures of the books which are not readable for computers. So even though someone would try to commit copyright fraud it would be very difficult for them.
C) the product/service
The product lines by Amazon include nearly everything but it is important to remember that it started as an online bookstore. The products offered nowadays include books, music CDs, videotapes and DVDs, software, consumer 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.
A notable technical innovation was a product called the Kindle Fire which was introduced to the market of tablet computers in september 2011. What differentiated this product from the other products in the heavily competed for market of the tablet computers is that Amazon pursued a low-pricing strategy which was carried out very successfully and aggressively. A great technical innovation in the service part was that the company introduced Amazon Prime. This service offered free two-day shipping on all purchases for a flat annual fee as well as discounted one-day shipping rates.
d) Business model
What was shocking of Amazon’s business plan is that was very unusual and they did not expect to make a profit for four to five years. This lead to a very low growth rate and therefore stockholders complained. However, as we all remember, there was the burst of the dot com bubble around the change of the millennium. This caused many online based companies to go bankrupt or stop their operations but Amazon.com survived. In 2001 Amazon received its first profit of $5,000,000.
This profit showed the stockholders and the world that there was definitely money to be made within the business model. We call the model itself a multi-level e-commerce strategy. It initially started with a Business-to-Customer relationship and Business-to-Business strategy. However later it moved add a Customer-to-Business transactions. As mentioned before Amazon lets almost everyone sell anything on Amazon.com Even other large e-commerce sellers use amazon to retail products and smaller suppliers are able to sell their goods at a fixed price.
3) Make suggestions or predictions of future innovations to the company concerned.
What i think that Amazon should do, as they are doing now, keep increasing the products they are offering. Furthermore there is a very important market trend that Amazon should not forget, namely that of the emerging market of downloading and video on demand. While the DVD market still exists technological advancements make it very easy to download movies or watch them on demand. What Amazon should develop is a very easy to use, as is one of their main things why customers like it, video on demand player. This on demand player should be able to offer movies very quick, easy and cheap. If Amazon would be able to do this they would remain the to go site for everything to buy online. This would require a very sophisticated software team to develop but seeing Amazon has software development centers all over the world this is possible.