RSM100: Case Study - Amazon Capstone
What is Amazon's story? How did they first start? - ANS-- Amazon started with books
because it is standard shipping and fits within a certain parameter (easy to pack and
ship, also easy to keep track of costs)
- Bezos started a subscription membership for the books which then carried out till
where it is now and made sure they would stay and get the best value
- Predicted that the internet would be a success and major part of our lives
What are the key success factors at Amazon related to operations management? -
ANS-- Having a very close eye on employee productivity is key to keeping efficiency
high and costs low (try to offer the cheapest bargain)
- Use of robotics and data analytics to predict what customers would want (hence, they
are auto-generated in terms of delivery dates too)
What did the release of the kindle do for Amazon? - ANS-It gave Amazon a lot of
market power and the ability to set prices EVEN lower
Having this large market share of the publishing industry allowed Amazon to demand
CONCESSIONS and initiated the "Gazelle Project"
What is the Cheetah and Gazelle concept and how does it apply to Amazon? -
ANS-Amazon going after the weakest publishers in the game, slowly working their way
up to establish their presence in the publishing industry
- making it known to the top publishers
How do Amazon's attractive policies influence and affect the competition in the
competing industry? What happens after? - ANS-Companies that come into Amazon
(enticed by the policies) are later met by the policies which AMAZON makes LESS
ATTRACTIVE
- these companies then end up on the border of going out of business
What strategic decisions did Amazon make that have made them successful? - ANS--
Always thinking about the long term
- Starting and having a subscription program which was unheard of
, - Easy return policy
- Since the start, they let the investors and employees know that they will be foregoing
their short-term profits (for 20ish years) to benefit in the long-run
- They were building infrastructure and cutting costs, beating out the competition who
couldn't sustain like Amazon, and then generated a lot of returns for their investors (they
were building the economies of scale)
What strategic decisions did Amazon make that regarding product liability? - ANS-They
didn't take liability for product defects or issues
- didn't have to face costs
What industry is Amazon part of? - ANS-MANY!
- government
- pharmaceutical
- clothing
- shipping
- newspaper
- cloud computing and web services
- space
- whole foods
What did Amazon do with the government? What did they gain or lose from this? -
ANS-- Amazon set up a lot of strategic partnerships with a number of different
governments (Federal, etc.) to set up headquarters and thus, have lower taxes
- Used law enforcement and tools like facial recognition software
- Police and law enforcement promoting products like the doorbell software
What is the sunk cost fallacy? - ANS-Paying a subscription is like a sunk cost
- hence, that make u want to continue buying or using that subscription to make the
most of the value
How does a company like Amazon not make money for 20 years and not manage to go
under or bankrupt? What strategy was used to address this? - ANS-- Being open and
honest with the investors from the start helped their case (minimal)
What is Amazon's story? How did they first start? - ANS-- Amazon started with books
because it is standard shipping and fits within a certain parameter (easy to pack and
ship, also easy to keep track of costs)
- Bezos started a subscription membership for the books which then carried out till
where it is now and made sure they would stay and get the best value
- Predicted that the internet would be a success and major part of our lives
What are the key success factors at Amazon related to operations management? -
ANS-- Having a very close eye on employee productivity is key to keeping efficiency
high and costs low (try to offer the cheapest bargain)
- Use of robotics and data analytics to predict what customers would want (hence, they
are auto-generated in terms of delivery dates too)
What did the release of the kindle do for Amazon? - ANS-It gave Amazon a lot of
market power and the ability to set prices EVEN lower
Having this large market share of the publishing industry allowed Amazon to demand
CONCESSIONS and initiated the "Gazelle Project"
What is the Cheetah and Gazelle concept and how does it apply to Amazon? -
ANS-Amazon going after the weakest publishers in the game, slowly working their way
up to establish their presence in the publishing industry
- making it known to the top publishers
How do Amazon's attractive policies influence and affect the competition in the
competing industry? What happens after? - ANS-Companies that come into Amazon
(enticed by the policies) are later met by the policies which AMAZON makes LESS
ATTRACTIVE
- these companies then end up on the border of going out of business
What strategic decisions did Amazon make that have made them successful? - ANS--
Always thinking about the long term
- Starting and having a subscription program which was unheard of
, - Easy return policy
- Since the start, they let the investors and employees know that they will be foregoing
their short-term profits (for 20ish years) to benefit in the long-run
- They were building infrastructure and cutting costs, beating out the competition who
couldn't sustain like Amazon, and then generated a lot of returns for their investors (they
were building the economies of scale)
What strategic decisions did Amazon make that regarding product liability? - ANS-They
didn't take liability for product defects or issues
- didn't have to face costs
What industry is Amazon part of? - ANS-MANY!
- government
- pharmaceutical
- clothing
- shipping
- newspaper
- cloud computing and web services
- space
- whole foods
What did Amazon do with the government? What did they gain or lose from this? -
ANS-- Amazon set up a lot of strategic partnerships with a number of different
governments (Federal, etc.) to set up headquarters and thus, have lower taxes
- Used law enforcement and tools like facial recognition software
- Police and law enforcement promoting products like the doorbell software
What is the sunk cost fallacy? - ANS-Paying a subscription is like a sunk cost
- hence, that make u want to continue buying or using that subscription to make the
most of the value
How does a company like Amazon not make money for 20 years and not manage to go
under or bankrupt? What strategy was used to address this? - ANS-- Being open and
honest with the investors from the start helped their case (minimal)
