Professional Documents
Culture Documents
Amazon
• Collectibles • Entertainment
• Antiques • Movies, Music & Games
• Art • DVD
• Coins • CD
• Toys & Dolls • VHS
• Memorabilia •Event Tickets
• Motor Vehicles • Books
• Cars • Clothing
• Boats • Jewelry
• Parts • Shoes
• Electronics • Accessories
• Cameras • Home Improvement
• Cell phones & PDAs • Décor
• Computers • Crafts
• Gardening
eBay: Target Segments
Primary target markets are Online Auction & Shopping communities.
Brokers and agents: to complete transactions, buyers and sellers depend on some
facilitating organizations like, citigroup or charles Schwab to complete transactions.
These groups are parts of eBay’s profit sites when eBay gets commission from these
organizations for each transaction.
Business Process
Seller Account
Creation
Listing an Item
No bids
Threat of
Substitutes
Since suppliers are Few substitutes and
large, so threat is low. Low threats because of
Substitutes strong CRM
Exchange
Seller Buyer
Regional sites vs.
Network Externality
eBay created > 24 regional trading sites within countries in order to facilitate the
process of buying and selling items of local interest.
This regional focus and network externality are very much consistent because the
larger the network size, the more opportunity for buyers and sellers to have a better
match of their needs.
Localization and Internationalization of eBay’s services should also help make the
site more accessible in a specific region, for speakers of the native language; thus
offering the opportunity to gain new members at a faster rate
The only possible downside could be fragmentation and isolation of the individual
networks, so each new regional site must “feel” like part of the main eBay network
and family
eBay API
Buyers:
Get the current list of eBay categories
View information about items listed on eBay
Display eBay listings on other sites
Leave feedback about other users at the conclusion of
a commerce transaction
Sellers:
Submit items for listing on eBay
Get high bidder information for items you are selling
Retrieve lists of items a particular user is currently
selling through eBay
Retrieve lists of items a particular user has bid on
Internet Properties
Coordination Commerce Community Content Communication
Mediation \/ \/ \/ \/ \/
Universality \/ \/ \/ \/ \/
Network Externality \/ \/
Distribution Channel \/ \/ \/
Time Moderator \/ \/ \/ \/
Creative Destroyer \/ \/
Transaction-Cost Reducer \/ \/ \/ \/ \/
Key Drivers
1. Network externality
The company believes that this critical mass of buyers, sellers, and items listed for sale created
a cycle that helped eBay continue to grow its user base. and one thing is very true for this model is its large
number of customers stay for longer period of time to complete transactions.
2. Mediation
In addition to providing a venue for selling items, eBay provides buyers and sellers a place to socialize, to
discuss topics of common interest, and to provide feedback on one another
3. Universality
On the Internet, amateurs and collectors from around the world, rather than locations within a reasonable
driving distance, could bid on items. And eBay is applying that latitude by connecting both parties.
4. Time moderation:
the property of time moderation assists eBay a lot by tailoring time according to customer’s needs.
sometimes it enlarges time period of auction according to needs of a buyer
Vision
To build the world’s most customer–centric company
To establish a place where customers could buy anything
Located in Seattle
Close to the largest book wholesalers in Roseburg, Oregon
The sales tax rate of small state is cheaper than big state
Sites in 6 countries (US, Canada, UK, France, Germany, Japan); ship to >
200 countries
Storefronts
“Merchant”
Catalogue
User Locate Store 2
choice Sellers
Transaction Store n
Sales Format
-Communication
(Reviews)
-Low Cost
-Large Variety
-Distribution
-Trust & Safety
(seller ratings)
B S
Amazon Web Services
(AWS)
Amazon E-Commerce Service
Search catalog, retrieve product information,
images and customer reviews
Retrieve wish list, wedding registry…
Search seller and offer
Alexa Web Information Service
Retrieve information such as page rank, related
sites given a target URL
Amazon Simple Queue Service
A distributed resource manager to store web
services results
5 Benefits of AWS
Amazon S3 Idea:
• Public/Private access.
• Support for large objects.
Client
Positioning: Online
Value Configuration Diagram : _________ Shopping
Associates
Brand Image Fixed Merchants Partnering
Program
Distributed
Strong CRM Web Services
Diversification
Mediation \/ \/ \/ \/ \/
Universality \/ \/ \/ \/ \/
Network Externality \/ \/ \/
Distribution Channel \/ \/ \/
Time Moderator \/ \/ \/ \/
Creative Destroyer \/ \/ \/
Transaction-Cost Reducer \/ \/ \/ \/ \/
First-Mover Success
First to move booking retailing online (1994 – Jeff Bezos)
Brand recognized worldwide, most visited site in USA (2000)
Simple Business Model:
Expensive inventory brick and mortar warehousing not required – Require WEB to interface
with customers and take their orders
Continuous Rapid innovation
“one-click”, search facilities, collaborative filtering, affiliate programs (250,000 partners in
2000), order tracking mechanisms
Established strong brand presence – created psychological switching costs in consumers
(collaborate filtering, privacy policies, builds trust)
Pillars (quality of service, value for money, trust worthiness)
WEB site easy to use, easy to find, and fast
Key Drivers
1. Low cost platform for transaction:
The Internet is certainly a lower cost platform for any transaction, communication or negotiation than
any other electronic media. Amazon is using this platform successfully to bring buyers and sellers
together for transactions, and doing so not by charging an upfront listing or transaction fee, but by
charging a percentage of each sales, which in the long-run could be a much larger pie and better
approach for Amazon on volume; on the short-term to merchants it appears to be a win-win situation
as well as cumulative listing fees can even become prohibitively expensive in some cases.
4.Creative destroyer:
The Internet is transforming the traditional retailing distribution structure; business is now conducted
by Amazon to remove the middleman of the brick-and-mortar storefront, playing a role as a creative
destroyer. Amazon is paving the way for the digital storefront, which is much more affordable and
accessible (does not require large amounts of capital to startup). In this way, it is both a creator and a
destroyer, but certainly in terms of the traditonal system it is a creative destroyer.
Success Story : Toys-R-Us