BMGT7011 E-Business Essay: Amazon's E-commerce Strategy

This essay provides an in-depth analysis of Amazon's e-business model, focusing on its IT infrastructure and e-marketing strategies. It begins with an introduction to Amazon's history and evolution as an e-commerce giant, highlighting its expansion from an online bookstore to a diverse marketplace offering a wide array of products and services, including cloud computing through Amazon Web Services. The essay then delves into Amazon's business model, dissecting its value proposition, which centers on customer-centricity and convenience, and its revenue model, which leverages a vast distribution network and a diversified product range. The paper explores the company's competitive advantages, market segmentation strategies, and the critical role of its IT infrastructure in enabling its e-commerce capabilities. It examines Amazon's e-business strategies, including its use of technology, risk management, and compliance, as well as its e-commerce marketing and advertising approaches, such as search engine optimization and supply chain management. The essay concludes by summarizing the key elements that contribute to Amazon's success in the competitive e-commerce landscape.

Running head: E-BUSINESS
Name of the Student
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Introduction
This paper deals with the analysis of the infrastructure of the information technology with
the e-marketing strategy and the e-business strategy of the selected e-commerce organization.
This essay also discusses the customer value proposition of the organization, along with the
revenue model of the organization. In this paper, the e-commerce organization that is selected is
Amazon. The analysis of the e-business is done in this paper.
The company Amazon first got launched in the year 1995 in the form of the websites,
which was only concerned with selling books at that time. The founder of this company is Jeff
Bezos, whose vision was to see the company grow explosively and the domination of e-
commerce. He always knew that he wanted the company to be "an everything store" company
(Ahern, 2013). He had this vision from the very beginning when he started the company.
Initially, this company just started as a marketplace online, but some years later, this business
expanded to sell various things like video games, electronics, software, toys, apparel etc.
The products that are offered by Amazon include DVDs, beauty products, health as well
as personal care items, kitchen items, to name a few. The services that are provided by Amazon
Web are cloud-based products, which includes databases, developer tools, security as well as
enterprise applications, management tools, to name a few.

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Discussion
Business Model of the Organization
Firstly, the value proposition is defined in the form of a statement which answers as to
why someone should do business with a particular organization. It should have the power in
order to convince potential customers as to why the product or the services provided by the
particular organization will be of great value to them as compared to those offerings which are
similar from the competitors of that particular organization (Barnes & Hunt, 2013). The design
of the value proposition plays the role of the key element which is responsible for the success of
the company for the delivery of the products which the people needs. The proposition of the
value of Amazon is seen by the people in the form of "an everything store".
An organization like Amazon consists of multiple value propositions as several target
customers in the various markets get served by the company. The value propositions of the
company range from "easy to read on the go" for the devices such as Kindle to "sell better and
sell more" to the market place of it (Camarinha-Matos, Afsarmanesh, & Rabelo, 2013). The
mission of the company is to be the most customer-centric in the world. It always wanted to be
the place where the customers can discover as well as find anything which they aim to buy
online.
Initially, it started in the form of an online book store but eventually the internal
developments, and the company began offering a suite of value proportions to very distinct
customers sometimes. For example, in the case of prime, it represents the value proposition of
online convenience, which is quintessential. An audience of people is served by the prime who

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tends towards being in a hurry (Gerrikagoitia et al. 2015). If the audience needs something, they
need not be bothered for going to a shop would not wait for a single day before the product gets
delivered. Moreover, free, fast delivery is bundled by Amazon.
A revenue model helps in the description of the structure of how incomes or revenues are
generated by a particular company. The revenue model of the company consists of Amazon
claiming itself to be a market of the mass. The company possesses many numbers of physical
assets like the centres for distribution as well as the film studios. The key asset is the mechanical
foundation of the company, which in turn is fundamental for working of the business on a daily
basis (Laudon & Traver, 2016). The company works on one of the databases that are biggest on
this planet.
In the case of the market space, the transaction of the traditional marketplace is
eliminated. It consists of an environment where the electronic exchange is communication as
well as information-based. Amazon sells a variety of products like garments, grocery,
electronics, musical instruments, kitchen products and many more stuff.
This company acts in the form of an online retailer which sells a various number of
products which includes e-book tablets as well as e-book readers. The site Amazon.com initially
started as an online book store. At present, the business scope has increased at a tremendous rate.
Along with all this, the company provides other businesses with the services of information
technology in the back end (Mazzarol, 2015). This proves that Amazon can also be termed as
one of the diversified businesses.
The top competitors of amazon include Alibaba, Otto, Walmart, eBay, Priceline, Big
Lots, Staples, Family Dollar, Target, SystemMacs, Best Buy, Netflix, Google play store and

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many more. Taking into consideration the different market as well as the business segments, the
competitors in electronics, as well as segment of general merchandise, are those that are mortar
and brick system like RadioShack etc. In a different sector, the company also competes with
Oracle, Accenture etc.
The comparative advantages of Amazon are it can sell the products at a steep price and
can still earn profits due to the arrangements of it with the sellers as well as the vendors. Along
with this, the utilization of amazon is much more as compared with the competitors of it like
eBay and Walmart. Amazon is one of the main largest online retailers because it sold products
worth $67.8 billion in the year 2013, which was followed by Apple with $18.3 billion in the year
2013. It contains multiple locations of the warehouse which are situated and located strategically
all over the country (Rahimnia & Hassanzadeh, 2013). In supply chain model as well as in case
of transportation, the main advantage is of cost savings.
The e-commerce giant like Amazon makes use of psychographics as well as demographic
segmentation for segmenting the markets. The segmentation of Amazon is based on the
behaviour of the actual purchase and not whatever is expressed by people over the internet but
what is done by them. The micro-level segmentation of Amazon makes a target on each and
every customer individually by the process of allowing the company for converting the visitors
into high-value as well as long term customers (Saebi & Foss, 2015). The segmentation also
involves the creation of personas where certain products in certain ways will be bought by
people. The company targets both the upper class as well as middle-class people.

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Information technology infrastructure
The infrastructure of information technology has a significant impact in terms of e-
commerce capability in terms of e-business and e-marketing strategies. There is a various
number of enterprises which also includes the microenterprises present in the developing
countries. The application of the communication as well as the information technologies which
can also be abbreviated in the form of ICT in order to conduct business which includes the
technologies which are already existing. These existing technologies includes telephone, fax as
well as landlines. The field of information technology is going on developing and evolving day
by day. The process by which communication takes place in the world is being shaped by the
new emerging technologies in mobile devices and computers. Increase in the success rate of e-
commerce depends upon the effective partnerships between both the public and the private
sectors.
Basically, the infrastructure of information technology is related to the software and the
hardware that is used by the businesses in order to operate and manage the processes of the
business. To share the information, the computers which are used in the businesses are
networked. The information about the products like the control stock is stored using the
databases that are sophisticated (Soto-Acosta, Popa & Palacios-Marqués, 2016). The
programming languages that are used in Amazon are Java, C++, Perl. The technology that is
used by Amazon includes the middleware, web services, groupware and networking.
Amazon is successful in building CRM software of it which is done in-house, which
means it is adapted to the requirements of it. This allows Amazon to encapsulate the customer

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data like location and early purchases, which in turn is used to customize the overall on-sie
experience of the user.
E-business strategies
The infrastructure of information technology has aided and helped in the advancement of
e-business marketing strategies. The improvements in the information technology and the
advantage of it for the various organizations have played a role in making the marketing of the e-
business competitive than before and successful also despite facing failures as well. Failures
were only caused due to the usage of the constant strategies while the environment of the e-
business was dynamic in nature.
In the context of such things, implementation and the formulation of the strategies is still
very challenging for the organization of the e-business. The key strategy factors like the
management of risks, technology, compliance, information systems were extracted. These key
factors are then presented in the form of the model of the marketing strategy of the e-business.
Particularly the risk management with the strategy of marketing shares an insignificant
relationship. On the other hand, the focus strategy also positively associates with the compliance
of the high level (Wiengarten et al. 2013). The governance of the information technology is
linked positively with the differentiation strategies and price leadership but negatively associated
with the focus strategy.

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E-Business models performance
There are four different types of business models in traditional e-commerce namely B2C
which stands for business to consumer which is the most common business model, followed by
B2B which stands for business to business model, then comes C2B which stands for consumer to
store and last but not the least is the C2C business model which stands for consumer to consumer
business model. The performance has been enabled as the models make use of the proprietary
technology for the delivery of a product, which is faster, better and cheaper.
Amazon sells products directly. Using the online storefront of Amazon, certain products
are offered to the buyers. The large warehouse network is the place where the inventory is kept.
This company is also a cloud computing company. A subscription-based model is also
maintained by Amazon through Amazon prime services.
E-commerce marketing and advertising
E-commerce has been able to achieve the market as well as the advertising sustainability
plans, supply chains, processes, customer as well as communication management. For example,
one of the e-commerce giants Amazon now contains the advertising business, which consists of
multibillion dollars. Amazon has a competitive advantage, which is sustainable. For the
customers who are using Amazon, such factors or the CPC, which stands for customer purchase
criteria includes service reliability, price and fast delivery (Mazzarol, 2015). The e-commerce

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giant is mostly preferred because it performs better than the competitors of it on this set of
customer purchase criteria.
The marketing strategy of Amazon is holistic, which also involves the investment in the
advertisements of health search as well as the products which are sponsored products. Directly
within the search results that are organic, the advertisements of the sponsored products act in the
promotion of the products. The sponsored products can, in turn, help in increasing the promoted
products sales.
Amazon is a pioneer in supply chain management which has been the key to success for
the company which ensures that it can make all the products available for the customers at a
reasonable price and faster than the competitors of it (Saebi, & Foss, 2015). The approach is to
embrace technology. The company makes use of robotic solutions and countless numbers of
automation together for packing and picking orders, which also includes inventory storing and
stacking. This company achieves customer engagement by looking after the needs of the
customer and continuously pushing all the boundaries to provide the customers with the
necessary things they are looking for.
The IT infrastructure has affected the e-commerce transactions, online services and
purchases in various ways as the mobile applications are changing the relationships between the
retailer and the consumer as because of the applications retailers can connect directly to the
consumers. The brands now do not wait for the customers to know as prompt advertisements
engage them. There are various flexible payment modes such as cash on delivery and online
payment.

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The customers like the convenience of the delivery that is faster with the lowest possible
rates. The personalized customer experience is growing day by day. The technology plays a role
in making standards of personalization to construct a customer base. With the help of
technology, customers can keep track of the purchases (Laudon & Traver, 2016). The
infrastructure of IT has affected the tractions, online services as well as investments in different
systematic ways, which in turn suitable for the customers.
Conclusion
The e-commerce giant Amazon is selected, and the revenue model, the customer value
proposition is discussed. The main competitors and comparative advantages of the company are
discussed. The impact of the infrastructure of IT has been reviewed according to e-business
strategies, and e-marketing strategies and the ways IT infrastructure has aided marketing
strategies are there. The IT infrastructure has helped e-business a lot to the position where it
stands today. Nowadays, e-commerce is boon in fulfilling the needs of the people, and with the
help of the infrastructure of IT has become very advanced and developed.

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References
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