Oct 17, 2019 in Research

Company 1: Amazon

Background Information 

Amazon is an American electronic and commerce company that commenced its new phase in 1994 after its founder had realized the benefits that might accrue to him by participating in online businesses. Jeff Benzos, who was the vice president of Wall Street firm D.E, had to quit his job in order to pursue his dream of establishing the world biggest online shopping retail. He was inspired by the annual web growth report, which prompted him to list twenty products that he could sell on the internet. However, after carrying out market feasibility, he changed his mind regarding selling products such as videos, computer hardware and software. It was then that he started selling books since he was motivated by an immense worldwide market that was in quench for literature. Benzos was also motivated by the low capital that was required to purchase the books and the incredible titles that were available in print. Alongside working towards raising funds, Benzos was in close contact with software developers since he anticipated that these people would help him in developing the company’s website.  

 

The company firstly operated from the Benzos’ garage until they were certain that it was going to be successful, and his garage was the place from where most activities such as customer’s support, receiving area and shipping were monitored. The company offered database research capabilities that brought across the expansion of about 1.5 million title databases. It also offered a discount of thirty percent for its products that made its prices affordable. This contribution among others has enabled the company to escalate its activities until it assumed its current status. 

 

The company’s headquarters are located in Washington, DC in the United States. The company’s diversified range of activities qualifies it to be one of largest internet-based retailer in the USA. Benzos’ contribution in the company’s success is fundamental since it is through his initiative that he started to work on business plan of what eventually became known as Amazon.com Inc. Bezo’s choice of the company name was influenced by the status of the river Amazon across the world. As the Amazon is the largest river in the world, he planned to make his store one of the biggest in the world. He argued that this would enhance brand marketability. The company began as a bookstore, and later, it expanded its activities to other places, such as Washington after he held successful talks with John Ingram and other investors. 

 

After incorporation, the company made significant sales to all the fifty states as well as in more than forty-five countries across the world. Within a week, the company had raised more than twenty thousand dollars. These achievements among others enabled the company to launch websites in different countries; this effort is geared towards increasing market operation for Amazon Company. 

Products and Services

Since the dawn of the 21st century, the company has diversified its activities and is dealing with a wide range of products, for instance, jewelry, toys, food, furniture, apparel, electronics, video games, software, Mp3 and Mp4 streaming and downloading, selling of CDs, blue rays, and DVDs. The company has also majored in the production of consumer electronics such as Fire phone, Fire TV, tablets, e-book readers, and Amazon Kindle. Additionally, the company has also ventured in selling certain low-end products including USB cables and chargers, and this was carried out under in-house brand for Amazon basics. The company is rated as one of the biggest sellers of housewares and home furnishing, not to mention apparel and kitchen gadgets. The company, through the third party agreement with companies, such as Circuity city store Inc., Target Corporation, and Toysrus.com Inc. among others, also sells well-known products such as wines, beer, and clothing among other consumer goods.  

 

The company also offers after-sales services such as shipment of products to the customers’ location, and due to this among other factors, the company has not only expanded it operation in the United States but across other competitive countries such the United Kingdom, France, Spain, Italy, Germany, just but to mention a few.

Culture

The labor practice of the Amazon.com is tiresome, inhumane, and health jeopardizing, and most employees complain that it is not the best place to work at (Fundinguniverse.com, n.d.). The employees are subjected to long working hours every week, which is also worsened by their low wages. The working environment has poor air conditioners. Ironically, the managers in charge have little concern for the employee’s welfare but their main concern is focused on people performing the manual labor. The communication in the Amazon.com is relatively poor. This is affirmed by the line of command whereby the employees do not have a specific manager from whom to receive orders. Therefore, most of them find themselves in a mixed up state of command, and most likely, they land into trouble with some managers. The company makes emphasis on quality, but ironically, they focuses on the rate of labor. This has compromised the company’s claim of teamwork. However, the poor labor practices in Amazon are not realized by the customers since the numbers of sales only increase. However, the company offers the freedom of clothing choice, if one looks decent and presentable. Additionally, most business transactions and communication are done on an online platform. 

Benefits

The company has enjoyed enormous benefits since the beginning of its work in 1994. Amazon.com offers credible chance to its employees to work with great people on their current and new projects. This offers both the company and its employees an opportunity to grow and develop. The company offers a choice of medical plans that include drug coverage, which is primarily designed to meet individual health needs. Additionally, there is a domestic partner coverage partnership, guaranteeing the staffs’ health safety that includes drug prescription. There are other health care plans such as vision plan, dental plan, and company pain long-term and short-term plans few. In addition, the company has accident coverage, basic life coverage, and minimal cost one. The company has also benefited through an increase of sales, which is enhanced by its diversification of sales and the fact that it has acquired stall and warehouses in prime areas. Additionally, the company also deals with the manufacturers and the wholesalers directly. This enables them to acquire goods at a lower cost. Thus, they are able to sell them a higher discount. As a result, the company has attracted immense number of customers. 

SWOT Analysis

Strengths

The company is endorsed with a variety of strengths that has enhanced it not only to beat its competitors, but also to win the customers’ loyalty. The company uses a cost leadership strategy whereby it reduces the number of top leaders and employees are paid as per the rate of labor input. The company enjoys the strength of superior products and services of great quality. The quality of its products is attributed to the fact they deal directly with manufactures, producers, and wholesalers. The company has also adopted strategic acquisitioning whereby they have acquired rights and franchised with certain companies such as Circuity city store Inc., Target Corporation, and Toysrus.com Inc. This has granted the company a competitive advantage over its competitors. Efficient distribution chain and logistic as well as and economics of scale adds to the company strengths. 

Weaknesses

The company faces some weaknesses in sense that it experiences negative publicity from some employees and media platforms. This has, to a greater extent, tarnished the company’s name. The company’s operations are limited to only online presence. In other words, since the company primarily operates on an online platform, it faces stiff competition from those companies that operate both in online and physical geographical areas. The company has a weakness in that it sells its products at zero margins. Due to this reason, the company may be making large number of sales but realizing minimal profits.      

Opportunities

Opportunities offer business organizations a platform to expand their operations in the future. In this regard, Amazon.com has a wide range of opportunities, for instance, online payment system that enables transactions to be carried out easily, while the cost incurred is little. Additionally, it saves time since different transactions are done at the same time. The company has released its own brand products and services that enable it to earn reasonable profits. The company has also been able to increase product and services portfolio, which is achieved through acquisitions. The company has diversified its activities by opening additional online stores in various countries and not forgetting the fact that recently, the company has established it physical presence in some parts across the world. 

Threats

The company faces a myriad of threats, including cyber threat since online security is questionable. The online platform is prone to hackers and the increasing rate of cyber-crimes. Lawsuits are among the big threats that the company might face due to the past allegations and contracts. Another threat is strategic alliances whereby online companies have grouped themselves into alliances to gain competitive advantage. The company also faces legal legislation against tax evasion. Evidently, the company has been brought to the book because it has not been paying tax. Furthermore, the company is threatened by regional low cost online retailers. 

Opinion

In one’s opinion, there is a feeling that Amazon has a wide business operation on an online platform. However, the business culture of the company demotivates its employees. If this is rectified, the company can enjoy a wide range of competitive advantage against its competitors, emanating from employees willingness and contribution. Moreover, the company should utilize the opportunities available since this will help overcome its weaknesses and mitigate the threats exposed to it.   

Company 2: EBay

Sales Force

Sales force is a customer relationship manager (CRM) application in most leading enterprises that enhances monitoring vital features regarding online marketplace. The sales force applications have customizable fields that help one to track anything that one needs. It helps one to link his or her account in the online market place with his or her email. One can also use a chatter to keep in touch with the whole team. This is enhanced by various application installed on phones, tablets, and PCs. Through the help of this CRM application, one can price, or make sales in online companies. Evidently, eBay has integrated this technology into their company, thus enhancing facilitated business activities. 

Background Information

EBay.com is an online company that was founded in September 1995. The company has a website link at http://www.ebay.com. The company is the world online market place that deals with the sales of goods and services to businesses and individuals. Currently, eBay has more than ten million registered members from all over the globe. The core founder of eBay Pierre Omidyars and his cofounder Jeff Skoll brought the idea of branding to reality. In its development, eBay has partnered with other companies through acquisitioning. For instance, the company formed partnership with such name brands as Disney, GM, and Sun. 

 

The company’s mission statement states: “we endeavor to provide a global trading platform where practically anyone can trade practically anything”. On average, there are more than five million items posted on the online platform. The company deals with a wide category of products and services not only in the United States but also across the globe. People registered as members on eBay can buy and sell products on this online platform . The marketplace services for eBay include online payments such as wire transfers and Pay Pal among others. A large number of buyers and sellers as well as developers of programs aim to help their community. 

Products and Services

Just like Amazon, eBay also deals with a wide variety of products and services, including books of all categories, antiques, cars and other types of vehicles, art, tickets, toys, hobbies and travel, stamps, memorabilia, sporting goods, real estate, glass and pottery, musical instruments, music, movies, DVDs, watches and jewelry, home furnishings, computers and other electronics, bears, dolls, crafts, collectibles, coins, clothing and accessories. 

Culture

The business culture is based on principles that boost its growth and expansion. The company has one of the most flexible cultures across the world. The culture regards how the company interacts with its customers, employees, and the community at large. The company does not limit its employees to the official wear only; however, it allows them to wear diverse types of casual clothes such as jeans, suits, and t-shirts. However, the staff should look decent and presentable, and the type of cloth worn should facilitate smooth running of business activities in the business environment. The company also sets aside time for employees to interact and to get together while parting, and this has significantly boosted the employee’s morale. Most transaction communications and other business activities are done on an online platform. 

Benefits

The company has immense benefits that accrue to it and its employees, resulting from its activities. The associates of eBay benefits from vacations that are offered at regular basis aimed at improving their personal well-being and they reflect continuous high performance in their daily activities. The company has a well-established employee discount programs that avails 401 savings plan, emanating from a company match. The company has employee stock whereby they receive restricted stock units. It has relocation plans among its employees whereby it helps them in moving, packing, and unpacking of belongings. Most importantly, the company helps the employees with loans that help them in acquiring house, cars, and real estate. The company also realized immense profit from the sale of goods and services. It also gains commission since it acts as a broker between the manufactures, producers, wholesalers, and the consumers. These benefits are only some of those that accrue to the company and its employees. 

SWOT Analysis

Strengths

eBay has efficient business model strengths that place it at the position of the world’s largest internet based marketplace. The online platform gives the company an upper hand in sense that it can be accessed by any person located anywhere in the world. The company has a wide economics of scale in such a way that it deals with a wide variety of products. It also enjoys the benefits of localization and its unchanged brand reputation. The online payment systems such as PayPal and Skill have enhanced effective integration of segments, which increases the number of customers. Furthermore, the company has a strong market position on the online platform. 

Weaknesses

The company is exposed to an immense number of contingent liabilities since it is exposed to a wide range of litigations. The company also experience high fees due to the large number of its staff. The company is also subjected to inadequate screening processes that are aimed at detecting and controlling the counter fake or imitated products. The company has stagnated in the expansion of its economics of scale. Recently, the company has not marked growth in the economy of scale. The fees for the sellers have significantly increased. As a result, the sellers make zero profit. 

Opportunities

The company has opportunities from the ever-growing internet advertisement and classifieds. This has attracted more customers to the company, and according to the trend, the company is expected to enjoy an increase in the number of sales. The growing popularity has also increased the online transactions that take place on a daily basis, and this is coupled with improved safety issues that guarantee reliability. The online platform has availed alternative payment system that acts as an opportunity for the company. The ever-increasing number of retail and mobile shoppers as well as acquisitions that have increased the number of product and services portfolio are among the opportunities for eBay. In addition, the company has opened more online stores in different countries across the world; it has a well-established database and IT department that endeavors in research and fighting cyber-crimes.

Threats

The Internet is a common phenomenon has made the company encounter increased costs and has significantly affected customer’s confidence. The company faces the threat of the increased business risk due to technological obsolescence. The technology is being depleted at a very high rate, and most online companies such as eBay depend on a third party for licenses. Vulnerability of vital services, such as failure of payment services, leads to the loss of income. Additionally, regional low cost resulting from increased activities of competitors, such as Amazon, is also a threat. Abrupt changes in the exchange rates have adversely affected the overseas trade. Fundamentally, exposures to internet frauds such as cyber-crimes have increased the cost of running eBay and have negatively affected customer’s confidence in online security.    

Opinion

eBay, dealing with such a wide variety of products and services and having such a large registered population, should realize more reasonable profit. However, this is hindered by its weaknesses and the threats it faces. In order for eBay to outdo its competitors, it has to capitalize on its strengths, utilize all the available opportunities, and thus it will be able to overcome its weaknesses and mitigate the threats that it faces such as great loss and cyber-crimes among others. Most important, eBay should focus on strengthening its database through software developers.    

Conclusion

In conclusion, it is evident that the companies have originated from focused individuals who looked forward to bringing people from diverse regions into a common online market place. However, the two companies have faced a myriad of challenges, and the strategy used to overcome these predicaments places them to their current status. The companies have diverse strengths, opportunities, and weaknesses. This, to greater extent, determines the management criteria used, business culture, and the benefits enjoyed by the respective companies. Therefore, this implies that the success of the company depends on its ability to handle it daily activities.  

Recommendations

It is recommended that the companies should have well-established database developers and information technology in order to facilitate the market place that takes place at the online platform. This helps to reduce cyber-crimes such as hacking, which in return increases customer’s confidence. The companies should have a closer link with the issues of the license rather than depending on the third party. Additionally, means of payment such as PayPal and wireless transfer should be streamlined to avoid unnecessary risks and loss encountered by customers. Furthermore, the culture of these companies should be looked into aimed at improving their working conditions in order to boost their morale. The companies should also look at the fluctuation of the exchange rates in order to compensate their overseas-customers for the losses incurred.

 

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