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E-Business, Amazon. - Case Study Example
Amazon.com is an e-commerce site which utilizes their business and revenue model well. "Amazon is perhaps the most widely known example of e-commerce retailing, not disintermediating retail stores from the supply chain but replacing them." (Bayers, 1999.) According to (Kador, 2005) "Amazon is a perfect example of how the web has added another value-added retail channel."
Amazon have created a virtualized value system through their accelerated ordering, delivery and payment of goods and services, while reducing operating and inventory costs associated with traditional bricks and mortar stores. They have access to global markets, economies of scale and the ability to personalize. As a virtual merchant, their products are suited to the Internet, their business models remain a source of differentiation. Amazon is a seller-controlled site whose commercial mechanism is fixed price sales.
Timmers (1998) classifies Amazon's business model as a virtual community, which "helps build customer loyalty and trust through an interplay of virtual and physical realities." (Hagel and Armstrong, 1997.) Amazon strengthens their association as a virtual store with "shopping trolley technology" (Cooke, 1997.) Shopping carts and checkouts act as reminders of physical environments. (Weick, 1995.)
Amazon's effectiveness as a virtual community is evident with their customer co-presence. ...