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Finance & Accounting
Pages 4 (1004 words)
Introduction Amazon.com uses pure play strategy as it conducts the sales of its products and services to its customers entirely via the Internet. The pure play strategy enables Amazon to have lower overhead costs in comparison to its major competitors such as Barnes & Noble and Borders which have to contend with extra cost in running physical stores via their brick and click strategy.
However, when we evaluate Amazon’s business model and the operational strategies that underlie it they greatly resemble those of its key competitor Barnes & Noble. Barnes & Noble also used its economies of scale to support low-cost leadership, it broke new ground by developing software that would enable its customers personalize their web pages and also enjoy the results of collaborative filtering (Ghemawat 13). The difference in one organization’s choice to use a pure play system while the other uses a brick-and-click system is too simplistic to explain the relative success of Amazon.com over Barnes & Noble. This would be best explained through the dynamic capability. Dynamic capability and its processes Dynamic capability refers to the ability of the firm to purposefully create, extend or modify its resource base so as to achieve congruence with the changing business environment (Menon and Mohanty 3). Of importance to note is the use of the word “purposefully” which negates the element of accident or luck. Dynamic capability involves intent and the emergent stream of activities within an organisation that are taken with a certain implicit aim. ...
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