FACULTY OF BUSINESS SCIENCES

DEPARTMENT OF MANAGEMENT SCIENCES

MBM738- STRATEGIC INFORMATION
MANAGEMENT AND E-BUSINESS

NAME: REJOICE K MPARAGANDA

REG NUMBER: R 155409 F
MODE OF ENTRY: HARARE WEEKEND CLASS
LEVEL: 1.2
PROGRAM: MSMCG
LECTURER: DR Mataba

Question: Amazon Case study

a)Amazon's e-business strategy has had a significant impact on its financial performance. Since
its inception as an online bookstore in 1994, Amazon has expanded its e-business operations to
become one of the world's largest online retailers, offering a wide range of products and services
to customers around the globe.

Amazon’s e-business strategy is characterized by the following key features:

Good customer service

One of the key strategies that has contributed to Amazon's financial success is its focus on
customer satisfaction. Amazon has built a reputation for providing excellent customer service,
fast delivery times, and a wide selection of products at competitive prices. This has helped the
company to attract a loyal customer base and increase sales.

Technology

Furthermore, another important aspect of Amazon's e-business strategy is its use of technology
to drive efficiency and improve operations. The company has invested heavily in its e-commerce
platform, logistics network, and data analytics capabilities, which has allowed it to streamline its
operations and reduce costs. This, in turn, has helped Amazon to maintain its competitive edge
and increase profitability.

Cloud computing

Amazon has also expanded its e-business operations beyond online retail to include services such
as cloud computing, digital streaming, and advertising. These services have become significant
sources of revenue for the company and have helped to diversify its business model.

Digital streaming

Digital streaming has helped Amazon connect brands to audiences by giving people the
opportunity to tune into real time videos that provides a more intimate, meaningful connection
that with more static branded content which is timeliness and relevance to the valuable users.
Digital streaming also raises user’s engagement, spreads awareness about a brand and increase
social validity which plays a big role in creating competitive advantage.

Artificial intelligence

It enables the system to see when the product was taken from the shelf by the buyer and who
took it. The system is also capable of removing an item from a customer's virtual shopping cart if
it is put back on the shelf. Computer vision is based on deep learning.

Data mining

Data mining is a process of extracting data from a given source and then analyzing it to find
useful patterns. Amazon uses data mining to find trends in customer shopping habits. By
analyzing past customer purchase data, Amazon can predict what future customers are likely to
buy. This helps Amazon stock its inventory with items that are more likely to sell. In addition,
data mining helps Amazon to identify trends and make predictions about future customer
behavior. This allows them to stay ahead of the competition and continue to grow their business.

Predictive analytics

Amazon collects individual data regarding each of its customers as they make use of the website.
Additionally to what the customer purchases, Amazon also keeps track of what items were
viewed, the shipping address of the users and the reviews left by the user. Big Data has greatly
played a role in making Amazon a leading e-commerce platform. The inventory is tracked
through the manufacturers for ensuring that the orders are executed fast. Big Data enables the
warehouse nearest to the user to be chosen, reducing the shipping expenses considerably.

Seamless online shopping

Amazon Go is a shopping experience with no cashier or even a checkout touch point. You enter
the store with the Amazon Go app, grab whatever items you want and then just leave without
having to wait in line to pay. Amazon Go uses computer vision, sensors, and deep learning to
track you and the items you choose in the store.
In a nutshell, Amazon's e-business strategy has been highly successful in driving revenue
growth, increasing profitability, and expanding its business into new areas. This has greatly
created its competitive advantage.

b)Amazon has leveraged technology in a number of ways to achieve and maintain its competitive
advantage in the e-commerce industry. Here are some of the key ways:

1. Robust e-commerce platform: Amazon has built a state-of-the-art e-commerce platform that
provides a seamless shopping experience to customers. Its website and mobile apps are designed
to be user-friendly, easy to navigate, and offer a wide range of products.

2. Personalization and recommendation algorithms: Amazon uses sophisticated algorithms to

analyze customer data and provide personalized recommendations to shoppers. This helps to
increase customer engagement and loyalty, as well as drive sales.

3. Supply chain and logistics optimization: Amazon has invested heavily in its supply chain and
logistics operations, using technology to streamline its processes and reduce costs. This includes
using robots in its warehouses to pick and pack orders, as well as investing in its own delivery
network to reduce reliance on third-party carriers.

4. Cloud computing: Amazon Web Services (AWS) is the company's cloud computing platform,
which offers a wide range of services to businesses and individuals. AWS has become a
significant source of revenue for Amazon and has helped to diversify its business model.
5. Data analytics: Amazon uses data analytics to track customer behavior and preferences, as
well as monitor its own performance. This data is used to inform decisions about product
offerings, pricing, and marketing strategies.

6. Voice assistants: Amazon's Alexa voice assistant is integrated into a wide range of products,
including its Echo smart speakers and Fire TV devices. This has helped to create a new market
for Amazon and further increase its reach.

In conclusion, Amazon has been successful in leveraging technology to create a competitive

advantage in the e-commerce industry. Its focus on innovation and customer satisfaction has
helped it to maintain its position as a leader in the industry.

c) How has Amazon’s e-business strategy affected its financial performance.

Amazon's e-business strategy has had a significant impact on its financial performance over the
years. Amazon has consistently invested heavily in technology and infrastructure to improve its
e-commerce operations, which has helped it to grow rapidly and gain a dominant position in the
online retail market.

One of the key drivers of Amazon's financial success has been its focus on customer experience.
Amazon has invested heavily in improving the user experience on its website and mobile app,
offering features such as personalized recommendations, fast and reliable shipping, and easy
returns. This has helped Amazon to attract and retain a large and loyal customer base, which has
driven strong revenue growth.

Amazon has also expanded into new product categories and geographies over time, further
driving revenue growth. For example, Amazon has launched successful products such as
Amazon Prime, Amazon Web Services (AWS), and the Amazon Echo smart speaker, which
have all contributed to the company's overall financial success.
Overall, Amazon's e-business strategy has helped the company to achieve significant financial
success. Amazon is dependent on long-term liabilities and Amazon has an increasing operating
costs, which may threaten Amazon’s future revenue, profit and cash flow.