Summary Audio Advice.

Audio Advice.1. For Audio Advice, what are the major advantages and disadvantages associated with using Amazon Marketplace? Using Amazon Marketplace for Audio Advice’s eCommerce solution yields several major advantages. First, Amazon has a highly optimized operations channel, whereby inventory management, shipping and returns processing is taken care of for sellers. Second, although Audio Advice has a strong customer base in North Carolina where it is headquartered, it has a low national brand awareness. Amazon marketplace’s has strong reach not only nationally but globally. Provided that Audio Advice can maintain a great seller ranking and customer service reputation score, having the certification of Amazon Marketplace lends not only visibility but also peace of mind that customers will be taken care of. This is made expressly possible via the ‘Fulfilled by Amazon’ service as well as very positive customer reviews. Finally, making use of Amazon Marketplace saves Audio Advice the cost of building and maintaining its own eCommerce site. The cost associated with the first year of operations (over $1M) may post an existential level financial threat to Audio Advice if ROI does not meet expectations; the margin for error is thin, and success may be subject to market whims. Building an in-house platform also makes them a competitor to Amazon; if Amazon decides to retaliate by de-listing their items, or lowering their search result rankings out of the buy box, it would also deal a major financial blow to the firm’s cash flow. 2. Classify the in-store, Amazon Marketplace, and direct e-commerce business channels within the GE/McKinsey Matrix and explain why (i.e. specify where each one falls within the matrix and why). The in-store business channel belongs to the high competitive strength and medium industry attractiveness region of the GE/McKinsey matrix. The market for high-end audio with personalized customer service is stable and growing. Moreover, Audio Advice already has a strong foothold and a sustainable competitive advantage in the North Carolina market. Taking into consideration the other business channels in discussion, it may not warrant significant financial investment beyond what Audio Advice has already established. The Amazon Marketplace business channel inhabits the high industry attractiveness, and medium to high competitive strength of business unit region; an ideal channel to invest in and to grow. Amazon reported a tremendous 32% annual growth rate for electronics, although as mentioned in the case study, this channel may skew more towards lower end commodity equipment, instead of the specialty equipment audio advice is able to offer in store with much higher order values. However, this downside may be made up via sheer volume of transactions. By providing the same emphasis on customer care as they do for in-store customers, Audio Advice was able to generate stellar customer reviews and become a top-ranked seller on Amazon for its product category. This can then form a virtuous cycle, which makes the brand more visible, as long as it can maintain its high standard for customer service. All things considered, Audio Advice was already well positioned for success on this channel. The direct e-commerce business channel inhabits the low competitive strength and lowmedium industry attractiveness region. The extrapolation of audio equipment revenue through online channels does not break out how much of the gains are through platforms like Amazon, and how much are from direct e-commerce offerings. Moreover, being a ratio, it is important