How Amazon Satisfies a Need, Comparing Amazon to Barnes & Noble - Assignment Example

Amazon.com Name: Institution: Assignment one: Amazon.com How Amazon satisfies a need Amazon.com is one of the biggest global online stores offering a wide array of merchandise from books, electronic products, apparel, music and home improvement items through its online retail portal www.amazon.com. To satisfy consumer needs, Amazon offers its products to consumers around the globe through various international websites. The organization displays its various products on its online platform, where consumers can browse through and compare prices and versions of the products that are available. In terms of books, Amazon.com sells over 3 million books from new books to older paperback versions. Consumers view the products online collect the ones they want to buy in a virtual basket and pay for these online through credit card or PayPal. Consumers can either purchase digitized products in terms of books, or they can purchase physical items in terms of books, electronic merchandise, apparels and other products. These physical items are then shipped to consumers (Hof, Sparks, Neuborn, & Zellner, 2007). Amazon stores a customer’s information securely so that when they make repeat sales, it only takes a single click to complete purchasing an item. This makes easy to purchase books online. Further, Amazon.co uses such information to recommend a list of books to customers (Hof, Sparks, Neuborn, & Zellner, 2007). In addition, Amazon.com also sells its products through its electronic e-book reader the Kindle. Kindle is a revolutionary e-book reader which allows consumers to access download and store hundred of books, magazines, blogs and magazines. Amazon has satisfied consumer needs by expanding both the contents and functionality of the Kindle, which has enabled consumers to easily access Amazon.com’s digital copies of over 950,000 books and store these books in the device. Furthermore, the store offers best seller items, with most of the books offered at a lower fixed price of $9.99, or even far less than that. Furthermore, Amazon.com also offers various pre-1923 books for free in its Kindle e-reader. These are mainly those than have run out of copyright, and cannot easily be found in print (Data monitor: Amazon.com, Inc., 2011). Amazon.com has been perfecting the Kindle device since its first launch in 2007. Newer and more advanced version with better screen and functionalities has been realized. For instance, the Kindle fire released in September 2011 is one such high quality e-reader with a seven inch display screen. These devices are both easy to carry, and are sold cheaply at $199 as compared to other devices such as the I pad (Amazon.com, 2012). Such low prices in all of Amazon.com’s prices enable it to attract its customers as well as satisfy a wide array of customer needs by making products easily accessible online for affordable prices (Data monitor: Amazon.com, Inc., 2011). Comparing Amazon to Barnes & Noble Amazon’s sales are way higher than its close competitors, Barnes & Noble and eBay which also sales similar products through an online platform. Amazon.com has a very different business model from Barnes & Noble. Amazon has from the very start operated from an internet store front selling primarily selling merchandise online. However, before exploring the internet retail business, Barnes & Noble was first a store front bookshop in New York. Today, Barnes & Noble has over 1000 physical stores and also sales products through its online storefront (Barnes & Noble, 2012; Hof, Sparks, Neuborn, & Zellner, 2007). Unlike Barnes & Noble, Amazon completely lacks a physical store front and stocks only a few books and items in its warehouses. Most of the time, Amazon orders for various items such as books from its distributors once a customer has made an order for the particular product. This helps Amazon avoid the high inventory costs and carrying charges. In contrast, Barnes & Noble has to stock up inventory of up to 160 days especially due to its physical location store front business model. However, similar to Amazon.com’s Kindle e-reader device, Barnes & Noble also developed its own e-reader device Nook in 2009, for which customers have been able to access digital content. Barnes & Noble offers discounted prices to its price sensitive consumers hence countering Amazon’s low price strategy, yet still being able to get higher prices from non price sensitive consumers. Amazon.com and Barnes & Noble though having different business models all target the same customer base (Hof, Sparks, Neuborn, & Zellner, 2007). Assignment two How Amazon.com has changed the organizational environment Amazon has greatly changed the way books are sold. Amazon defined and refined the e-commerce business environment. The company changed the online shopping model and experience, especially within the book selling business. Amazon.com was the earliest online retailer that went into business in 1995 (Chevalier & Goolsbee, 2003). Initially, Amazon.com focused on selling books and music online, but over time it expanded its operations to various other merchandise products such as electronic products, kitchen ware, and apparels. Adopting a completely online business model where the business did not have any physical stores, Amazon.com went against the grain of existing retail businesses at the time of its launch. Within the first five years of its establishment, the company sold over $2 billion worth of online book sales, making dominant players in the physical store front industry rethink their business strategies to include online store fronts (Chevalier & Goolsbee, 2003). Unlike other online businesses such as Facebook, or Google which developed a new product, Amazon.com exploited an already existing book market to provide customers products in an easy to access and affordable way. Over the years, Amazon.com has represented the epitome of an online business model that has changed the online industry. As consumers the digital world expanded, Amazon’s digital content business as well as e-commerce business strategy paid off (Rao, 2011). Physical storefronts dealing in books have been losing sales over the past decade as more consumers choose to purchase books online. Furthermore, the competitiveness of Amazon’s business lead other brick and mortar stores such as Wal-Mart and Barnes & Noble’s to expand in the online store business in order to keep up with changing trends in the retail industry (Filson, 2004). Amazon’s Kindle product has indeed been a revolutionary product which has also changed the organizational environment on how books are sold and accessed. The product which has the ability to download and store digital books has increased the amount digital books that are sold while lowered the level of physical products that are sold. Kindle, which has enabled consumers to easily access Amazon.com’s digital copies of over 950,000 books and store these books in the device, has also inspired other companies such as Barnes & Noble to keep up with the change in digital content access. Barnes and Noble launched its Nook e-reader device in 2009 two years after Amazon’s Kindle due to the huge success that the Kindle experienced. As at 2011, book purchases in digital content within Amazon had way surpassed the physical book purchases (Data monitor: Amazon.com, Inc., 2011). Notably, such trends and business strategy adopted by Amazon have been changed the organizational environment of how product are accessed, especially books. Unlike ten years ago, the organizational environment in most retail businesses is highly data driven, with retailers employing data analytics from online store traffic to understand their customer’s needs and to customize these to their needs (Casey & Carroll, 2004; Rao, 2011). This is similar to Amazon’s earlier strategy, where they stored customer’s information securely so that when such customers make repeat sales, it only takes a single click to complete purchasing an item. This makes easy to purchase books online and such data was used by Amazon.com to recommend a list of books to customers. Assignment three Dangers of Institutionalized socialization Institutionalized socialization entails developing an internal organizational culture based on internalized organizational values and learned behaviors. In this, a new comer learns the values, appropriate behavior, as well as unacceptable practices within an organization. This implies that various members in the organization respond to various issues almost in similar manner (Saeed, Abu Mansor, Siddique, Anis-ul-Haq & Muhammad Ishaq, 2012). There are various dangers in institutionalizing socialization. First and foremost, is that institutionalizing socialization makes individuals within an organization similar in a lot of ways and in responding to various organizational problems (Lalonde, 2010, p. 363). This implies that such members will most likely have group think which is not good for an institution bent on encouraging innovation and an out of the box think. The collective individual socialization tact exposes individuals in an organization to similar set of experiences and common ways of solving problems. While it enhances employee cohesion and engagement, it may potential not use effectively a new comer’s prior knowledge (Saeed, Abu Mansor, Siddique, Anis-ul-Haq & Muhammad Ishaq, 2012, p. 98). Furthermore, institutionalized tactics enhances predictability of an organization. While such tactics are often based on the goals of an organization, it may potentially not provide an organization with competitive advantage in a market producing rapidly changing products. This is because, other rival players in the business environment quickly be able to predict the moves in human resource strategies that an organization in planning, and counter this by developing even more superior strategies (Lalonde, 2010, p. 364). Lalonde (2010) notes that as individuals enter into organizations they are often faced with a reality and culture shock and try to reduce such shock through seeking information. In an institutionalized socialization framework, an employee may take time before they are able to adapt to the organizational collective culture. This is unlike an individualized culture framework where an employee would align their behaviors and norms to meet organizational needs. Notably, new employee may experience behavior uncertainty as well as effort uncertainly. They may be unsure whether their technical skills are effective enough to fit the organizational work group. Such uncertainties prolong the rime period with which an employee gets oriented to their role in the organization since they have to change their existing norms and values and adopt the new collective values within the organization (Saeed, Abu Mansor, Siddique, Anis-ul-Haq & Muhammad Ishaq, 2012, p. 99). Furthermore, within a crisis, institutionalized tactics may constrain mobilization of individual knowledge and utilization of individualized skills. Further, adapting to changing needs, learning, as well as improvising may not be fully optimized within the organization (Lalonde, 2010, p. 363). Despite these drawbacks and dangers of institutionalized socialization, it also has its benefits such as an effective alignment of employee goals with organizational goals thus ensuring oneness in business strategy. References Amazon.com (2012). Kindle Fire HD. Retrieved from http://www.amazon.com/ Barnes & Noble (2012). Nook. Retrieved from http://www.barnesandnoble.com/ Casey, R. & Carroll, W. (2004). The Impact of E-Commerce Industry Turmoil on Amazon.Com: A Strategic Perspective. Internet Business Review. Retrieved from http://jib.debii.curtin.edu.au/iss01_casey.pdf Chevalier, J., & Goolsbee, A. (2003). Measuring Prices and Price Competition Online: Amazon.com and BarnesandNoble.com. Quantitative Marketing & Economics, 1(2), 203-222. Data monitor: Amazon.com, Inc. (2011). Amazon.com, Inc. SWOT Analysis, 1-11. Data monitor: Barnes & Noble (2012).). Barnes & Noble, Inc. SWOT Analysis, pp. 1-11. Retrieved from Ebscohost.com Filson, D. (2004). The Impact of E-Commerce Strategies on Firm Value: Lessons from Amazon.com and Its Early Competitors. Journal of Business, 77S135-S154. Hof, R., Sparks, D., Neuborn, E., & Zellner, W. (2007). Amazon.com versus Barnes & Noble: The Battle of the Bookstores and the Future of Electronic Commerce. Retrieved from http://www.maths.tcd.ie/~nora/FT351-3/CS.pdf Lalonde, C. (2010). Organizational socialization in a crisis context. Disasters, 34(2), 360-379. Rao, V. (2011). Why Amazon is the Best Strategic Player in Tech. Forbes. Retrieved from http://www.forbes.com/sites/venkateshrao/2011/12/14/the-amazon-playbook/ Saeed, T., Abu Mansor, N., Siddique, S., Anis-ul-Haq, M. M., & Muhammad Ishaq, H. (2012). Organizational Socialization: Individual and Organizational Consequences. International Journal of Academic Research, 4(3), 96-101. Read More