COLLEGE OF BUSINESS ADMINISTRATION

Supply Chain Management (BUSI 3322)

-:Group members
Fatimah Al-Jomaie 200800688
Fatimah Al-Jishi 200801136
Alia Alnujaidi 200800084

Section:- 201

Dr. Dalia Younis

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

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
 ?? 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

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
 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
 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
at

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
 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
 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=8
6504581
• http://wiki.answers.com/Q/What_advantages
_of_selling_books_via_Internet
• http://jobsearchtech.about.com/od/company
profiles/a/Amazon.htm
• http://www.heinz.cmu.edu/~kclay/papers/ret
ail.pdf