Business Report on Jet.com: Analysis of Internal Factors and Recommendations

This paper is a business report on the company Jet.com. This paper will analyze the internal factors of the company by using the Osterwalder & Pigneur’s nine building blocks. This will help in assessing the factors that made the company successful and provide recommendation for a better change to help the company sustain the position it has required.

Running head: BUSINESS REPORT
BUSINESS REPORT
Name of the Student
Name of the University
Author Note

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Executive summary
This paper is a business report on the company Jet.com. This paper will analyze the internal
factors of the company by using the Osterwalder & Pigneur’s nine building blocks. This will
help in assessing the factors that made the company successful and provide recommendation for
a better change to help the company sustain the position it has required.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the Company...........................................................................................................3
Discussion........................................................................................................................................3
Business Model............................................................................................................................3
Building blocks............................................................................................................................4
Interrelationships.........................................................................................................................6
Success Factors............................................................................................................................7
Risks............................................................................................................................................7
Business Model Changes.............................................................................................................8
Conclusion.......................................................................................................................................8
Recommendation.............................................................................................................................9

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Introduction
Business report is a kind of an assignment that helps to analyze a condition or a situation
and apply different business theories and suggestions that help in coming up with suggestions for
the improvement of an organization. Business reports are beneficial for the company in order to
ensure the profitability of the company. These reports help in tracking their value in the existing
market. This paper will give a brief overview of the company Jet.com and critically examine the
internal factors of the company that has helped the company to succeed in the market.
Overview of the Company
Jet.com is an America based e-commerce company. The headquarters of the company is
situated in Hoboken, New Jersey. The founders of the company are Marc Lore, Nate Faust and
Mike Hanrahan. The site was launched for the public in July 2015.The idea of launching this
company was to provide customers with quality products at a cheaper rate. In 2016, the company
became a subsidiary of Walmart. Walmart purchased the company for a huge amount of $3.3
billion proving that the company had generated sufficient revenue and profits in one year (Sims,
2018). This has paved way for the success of the company and get noticed on a global platform.
Discussion
Business Model
The company Jet.com is different from the online sites that exist in the market. The
strategy used by the company is that customers acquire heavy discount when they buy products
in a bulk. Moreover, the company offers attractive discounts on all the merchandises. The
company sells the usual consumer products that are sold in most of the retail stores (Allender et,

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al 2018) The company guarantees discount of 10% and more to the customers in each purchase
made by them on over ten million products.
Building blocks
To assess the business model detains of the company Jet.com the Osterwalder &
Pigneur’s nine building blocks approach is applied (Dudin et al, 2015). This will help in
developing an innovative and strategic business model.
Customer Segments
The different schemes that the company has provided has attracted many customers. The
company offers variety of products from pet supplies, appliances, grocery items, furniture,
books, baby products, electronics and household appliances. The free return and shipping policy
has made happy customers making them want to purchase from this site again.
Key Partners
The key partners of Jet.com are popular brands like Ann Taylor, Bloomingdale and Nike
to name a few. The company also has partner sites like Sony Store and TigerDirect.com.
Value Proposition
Jet.com makes it easy for customers to buy all range of products online so that they do
not have to get out of the house. They promote product at your doorstep. Jet.com offers
sustainable and durable products at a cheaper in comparison to the existing popular e-commerce
site.
Key Activities

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Jet.com provides the customers with a free shipping and return policy on products that
they purchase (Altug, Aydinliyim & Jain, 2018). All items that are available on the site are
discounted. Ensuring and calculating discounts based on the amount and the number of things
the customer has purchased.
Channels
Jet.com sells products online and does not have any third party websites. Their sales
depend on online sales only.
Revenue streams
Jet.com does not make a profit solely on the basis of the sales of the products. They
generate revenues from different forms like asset sales, subscription fees. The company in 2016
had raised $545 million in a venture capital financing (Snoeck, Merchan & Winkenbach, 2018).
This shows Jet.com has a long-term business plan in order to sustain in the market.
Cost structure
Jet.com puts emphasis on their cost structure rather than fast delivery. Innovative and
strategically made discounts offer and motivate customers to buy products. The cost structure of
the company is relatively low paving way for more sales due to the low cost. Jet.com provides
JetCash that rewards customers with incentives that can be later used while purchasing on the
site.
Key resources

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The infrastructure, mailings lists, capable and happy employees and one of the most
important the warehouse where all the products are stored. The website from where people make
orders.
Customer relationships
Email and personal messages of current offers, promotions and catalogues to past
customers and potential future prospects supported by an internet order platform. ( Jiang, Jun, &
Yang, 2016).
From the Osterwalder & Pigneur’s nine building blocks approach that has been used to
assess the business of Jet.com it can be seen that the main success of the company is the low cost
range. The company has become successful due to the price offered and for various discount
schemes that has been beneficial or people (Nica, 2015). The internet is being widely used thus
online shopping is a big factor of the success as most business, shopping these days are done
online. After assessing the internal factors of the company with the help of the building block
approach it can be said the managers and the team should come up with strategic plans to make
the company more accessible to the customers.
Interrelationships
Jet.com has succeeded in the market in a very short span of time. The primary reason for
the success of the company is due to the emphasis on low cost products. Schemes that are
beneficial for customers available pave way for higher sales and in subscription. The key
activities that help in awareness like the personal email and messages make people aware of the
discounts and these make them buy products. The infrastructure and the positive work
environment paves way for better sales and in the operations of the company. The warehouse of

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Jet.comstores all the products that is displayed on the website to satisfy the demands of the
customers. The unique strategies that are put forth by the employees help in generating different
discount schemes. Collaboration with the popular brands help in making the company garner
appreciation and popularity. The partner sites help in shipping in different places and available to
a wider market. The different product range helps in people to find everything at one place. The
website accessible to people have become easy for people to look at all the products from their
desktop or the phone that makes the delivery easy.
Success Factors
Jet.com has become successful in very less time because of specific factors. There are
many e-commerce websites but the reason for the success of Jet.com in such a short span of time
is the low cost and the discounts and schemes that are provided which has been proved to be
beneficial for the company. This has paved way for successful brands like Nike and
Bloomingdale to associate with this site and sell products through this site due to its growing
popularity. The association of these products have been beneficial for Jet.com as well that has
increased the sales and the popularity of the site as well.
Risks
The two-part pricing model may be detrimental, as some people would not want to pay a
subscription fee in order to purchase a product. The other factor is that the warehouse stores a
wide range of products and in bulks, and if not purchased at the right time then the products
might become unsuitable for usage that might result in loss (Feinleib, 2017). The movements in
the foreign exchange market might increase costs that will be added to the global business

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Business Model Changes
After assessing the strength of the company Jet.com,it can be seen that there needs to be
small changes in the business model of Jet.com that may help in the profitability. The concept of
providing cheap and a variety of products in the same website has been beneficial for the
company. However, the business model can be changed as per the digital model changes that are
applied in today’s world (Sathananthan, 2017). There are factors that can be improved to help the
company achieve their business goals. Jet.com should make strategies and plan to expand their
business and set up their office in different parts in the world in order to ensure affordable
shipping and for fruitful business. The shipping should be fast as people do not like to wait for
products that they have ordered for a very long time (Holmes, 2016) There should be online
expansion as well in the market to reach a wider area of customers. Jet.com should promote their
company to spread awareness among people. Collaborating with good advertising agencies will
help in promoting the website. Social media is a rage in the world right now. Being an online
shopping company the presence of the company on social media platforms will be helpful and
help in assessing the needs of the people thus helping them introduce more varieties of products
to cater to the needs of the current desires of the people. The costing of the business model of the
company does not generate a lot of revenue thus the changes in the costing an help in generating
more profit at the same time be beneficial for the people.
Conclusion
This paper states the reasons of the success of the company Jet.com that has been popular
among people and how their innovative schemes and discounts has helped the company to
acquire customers and how the company has also attracted major brands to associate with
Jet.com to sell their products through the site. However, there are risks that might affect the

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company but if measures are been taken and implemented at the very start then the small risks
can be avoided to retain their position and sustain in the existing market.
Recommendation
 Discount schemes on purchase of small amount of products should be available,
as many customers do not prefer to buy products in bulks.
 Expand and establish in countries who have a high GDP rate for generating more
revenues.
 provide more products of established brands in their websites
 Fast delivery. Jet.com can deliver the products fast to the customers for the
overall satisfaction of the company.

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Reference
Allender, W., Liaukonyte, J., Nasser, S., & Richards, T. J. (2018). Price Fairness and Strategic
Obfuscation. Available at SSRN 2780170.
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S., & Namitulina, A. (2015). The innovative
business model canvas in the system of effective budgeting. Asian Social Science, 11(7),
290-296.
Feinleib, D. (2017). Regaining Control. In Bricks to Clicks (pp. 17-29). Apress, Berkeley, CA.
Holmes, E. L. I. Z. A. B. E. T. H. (2016). Free Shipping Alone Isn’t Enough: Online Retailers
Go for Speed. Wall Street Journal Online.
Jiang, L., Jun, M., & Yang, Z. (2016). Customer-perceived value and loyalty: how do key service
quality dimensions matter in the context of B2C e-commerce?. Service Business, 10(2),
301-317.
Nica, E. (2015). Satisfaction and trust in e-Commerce. Psychosociological Issues in Human
Resource Management, 3(1), 107-112.
Reagan, C. (2016). A $260 billion ‘ticking time bomb’: the costly business of retail returns.
Sathananthan, S., Hoetker, P., Gamrad, D., Katterbach, D., & Myrzik, J. (2017, November).
Realizing digital transformation through a digital business model design process. In 2017
Internet of Things Business Models, Users, and Networks (pp. 1-8). IEEE.
Sims, S. (2018). Acquisitions: Walmart vs Amazon.
Snoeck, A., Merchan, D., & Winkenbach, M. (2018). Revenue Mangement in Last-Mile
Delivery: State-of-the-Art and Future Research Directions.

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Altug, M. S., Aydinliyim, T., & Jain, A. (2018). Managing Opportunistic Consumer Returns in
Retail Operations. Baruch College Zicklin School of Business Research Paper, (2018-10), 03.
.

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Key partners
TigerDirect.com,
Sony Store, Nike,
Bloomingdale and
Ann Taylor.
Key activities
Free shipping and
return policy,
calculating
discounts.
Value
propositions
Promotes product
at the doorstep
and low cost for
sustainable and
durable products.
Customer
relationships
Personal messages
and direct email.
Customer
segments
Everyone of all
age and gender.
Key resources
Infrastructure,
warehouse,
website.
Channels
Online site
jet.com
Cost structure Revenue streams
Low cost structure Multibuy and subscription fees.