Five-fore analysis industry and Amazon
Setting up business inline is yet simple but practical, companies can make good use of the advantages to create incredible results for its own companies. With inexpensive set-up cost and capital requirements, it is easy to attract new entries into this market. Especially for some products which already have real products and resources, they can use their existing materials and expand the business to online. All these can proof that it is an easy market to enter and the threat of new entry to BBC industry is high. It) Bargaining Power of Suppliers
Since there are many publishers in the market, substitutes are available and BBC industry faces only low switching costs when it changes suppliers. Since there are no physical stores in BBC industry, changing suppliers does not matter for them to continue their business. Besides, most of the customers go to online retailing websites to compare some products with similar functions but not a certain brand, so those retail companies do not think that the input offers by their suppliers are necessary to affect the sales. Moreover, usually BBC companies would order large illume of purchase, so suppliers treat them as important customers.
Because of these, the bargaining power of
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Apart from this, usually the bargaining power is really high when people are concentrated and there are only few of them. Yet, there is large number of buyers in this market and mostly, people are scattered in different time and locations to buy online. ‘v) Threats of Substitute Products or Services Although there are many substitutes to replace each company in the BBC industry, and consumers have low switching cost to the substitutes, the threat of substitutes of BBC is high. Even in the online platform, there are many different companies for customers to choose.
Not only the substitutes sold online, substitutes sold in physical Five-fore analysis of BBC industry and Amazon’s market valuation By season_CT can find some online shops which sell products with lower price, customers would shift to those shops since they would think that they can purchase products with similar quality even the prices are different. ‘v) Rivalry Among Existing Competitors The rivalry among the existing firms in this market is high. Though there are only few major commerce companies in this field and have been existing for a long time, the raked is still competitive.
With the development of advanced technology and wide spread of Internet application, there is high growth rate of e-commerce industry and this will increase the competition of this industry. Value Chain of Amazon Value chain can be divided into nine activities and each of them can affect the revenue of company. I) Inbound Logistics Amazon can gather information of customers’ experiences efficiently as it highly reduced returns to its suppliers. It) Operations As it has our warehouse, its easy and fast operation and system can meet high emend of customers. Ii) Outbound Logistics Amazon has the ability to sum up orders bounds for some locations. Iv) Marketing & Sales Since the delivery is only based on single transaction, the delivery is free and it reduces the price of some suggested products. V) Firm Infrastructure With a single platform, Amazon has a strong technological infrastructure to help the management of the company. V’) Human Resources Management Amazon put a greater force on human resources management. It hired trained professionals to work for the company to help its development. Vii) Technology
Development Amazon has high investment in technology development such as Kindle to support daily operations and growth. Viii) Procurement Amazon can purchase raw materials or useful products from the supplier at a low price which can help reduce the production cost. Ix) Service Amazon has a policy of free returns within 30 days, which allows people to make a possible change of the products after purchase. From the above information, I do think that Amazon can outperform and operation efficiently in this market since its development is all-round and can meet market needs.