Ebay vs Amazon

Amazon.com, Inc. (Amazon) is a leading e-commerce company that successfully offers a wide variety of products and services offered through customer facing Websites (reuters.com, n.d.). This global e-commerce giant was born online in 1996 and continues to lead in e-commerce via sales of its own products and sales of third party products in a plethora of categories that caters to the B2B and B2C sales environments. Unlike Amazon, Barnesandnoble.com, Inc. (Barnes & Noble) did not begin as an online e-commerce company. The inception of Barnes & Noble began in 1986 and focused on the retail environment in “content, digital media and educational products” (reuters.com, n.d) with its principal focus on trade books. However, the digital segment of Barnes & Noble, which offers books, magazine, DVD’s, software, and electronics, etc. does compete with Amazon (reuters.com, n.d.). According to Cheeseman (2013), the

In today's businesses e-commerce is becomingly more effective in the modern world. Two major companies stand out, one solely relying on online business and the other both store and online services. Most individuals are familiar with these companies, Amazon and Nike. Both of these companies carry strong points in their own right, and as demand for their products grows, so does opportunity. Amazon was once very plain and unattractive but was still the primary bookseller for consumers on the Web, and

Amazon is the world’s largest online retailer and is indeed a pioneer in the online retailing space. Though it started as an online bookstore, its success in its venture spurred it to diversify into selling anything that can be sold online. Further, Amazon has also expanded globally and now operates around the world through a combination of localized portals and globalized delivery and logistics platforms. Amazon has achieved a great level of success in the online retail industry. “The way in which Amazon has leveraged technology as a source of competitive advantage and reaped the benefits of the economies of scale in addition to leveraging the synergies between its internal resources and external drivers has spawned many rivals who aim to imitate and better its business model” (Management Study Guide, 2017). Amazon’s generic corporate strategy can be described as concentric diversification. “This strategy is based on leveraging technological capabilities for business success and following a cost leadership strategy aimed at offering the maximum value for its customers at the lowest price in addition to wrapping its business around the customers wherein they find Amazon to be the go-to portal for their online shopping needs”(Bethel,2017).

Amazon.com, from a strategic approach, is dominating the world-wide-web. They have become the world leader in online sales of books, music, videos, movies and other products and services. Amazon knew that the Internet could be used as a distribution channel, thus reducing their supply chain relations. By making these strategic advances, Amazon was able to achieve and sustain their competitive advantage.

Amazon.com faces intense competition when it comes to their online market, as they have competition in many different industries. The goods and services that Amazon.com offers varies greatly and includes retail, e-commerce services, web computing services, and electronic devices, which increases their competition from solely internet based companies to physical retail markets as well. Some of their competition is more intense in that they have greater resources and brand recognition as well as more customers. Amazon.com’s competition may also intensify due to newer and more advanced technologies in both electronics and in web infrastructure, together with business alliances between their competitors. This intense competition will decrease their profits in the long run due to creating a more competitive market which will decrease demand for Amazon.com products and services, closer to a

Amazon’s victory is significant, keeping in mind that the company grew by 41% in the last fiscal year by $48.1 billion, that is, five times faster than Walmart, that grew only by a mere 8% (Fig 2). Indeed, Amazon’s world-wide popularity and recognition will be difficult to beat, with demographics of 237 million active customers worldwide, making it one of the most valuable brands in the world. Not only has Amazon seized the world with its e-commerce strategy, but it is also willing to forego profits to gain market share, making it difficult for Walmart to find a space in the online retailing spotlight. Not being hamstrung by an enormous brick-and-mortar business like

Amazon.com (Amazon), founded in 1995 by Jeffrey Bezos, has grown from an online bookseller to a virtual retail supercenter selling products ranging from books, toys, food, and electronics for which it is best known today (Hill & Jones, 2013, p. C272). At its inception, the goal of Amazon was to become an online bookstore that could offer a wider range of books to millions more customers than a typical brick-and-mortar (B&M) bookstore at lower prices (Hill & Jones, 2013, C272). After 2 years of rapid growth, Bezos took the Company public in order to raise more capital (Hill & Jones, 2013, C273). In addition to its lower prices, Amazon had the benefit of its patented 1-Click ordering system which improved the ease of ordering from its site. Some of the Company’s competitors such as Barnes & Noble and Borders, attempted to compete in the online bookselling industry however, none were successful as Amazon had first-mover advantage (Hill & Jones, 2013). As the Company’s growth began to slow down in the late 1990’s, Bezos expanded Amazon’s product offerings into CDs, cameras, DVD players and other electronic and digital products which created another advantage for the Company. Over the 2000s, many of the weaker company’s in competition with Amazon found online retailing too complex and expensive and consequently formed agreements with Amazon (or eBay) to operate their

Technology is a huge factor in modern day life - with 45% of the world having internet access to purchase goods and services, the e-commerce industry is ever growing. Therefore new technologies have a significant impact on the external environment as they guide the new direction of a market. Technological improvements generally coincide with technological advancements in a company’s products helping to gain more consumers and maintain competitive advantage over other companies. Amazons prime addition has between 50 and 70 million subscribers with an increase of 53% last year (Mac, 2015) therefore showing the success of the technological improvement and the ability to increase consumer base by a large amount. Other technological advancements that Amazon has invested in include Amazon video and Amazon music via mobile apps and webpages enabling Amazon to keep up with growing markets. Another form of Amazon using technology is to track and trace consumer patterns – technology has enabled Amazon to see there consumer loyalty rates (50% consumer loyalty in 2004) (Kimble & Bourdon, 2013). Similarly as technology is becoming such a large part of everyday life, e-commerce companies are able to gain considerable benefits as their target market grows – faster broadband as well as increased availability of internet helps to promote companies such as Amazon.

❖ Security; as the number of Internet crimes increases, customers are becoming aware of the possible danger involved in the process of on-line shopping. This security problem may not be difficult to improve since security technology is innovated quickly, but to convince customer of this is not as easy

Amazon.com is the world’s largest online store that provides access to online shoppers worldwide. In 1994, Jeff Bezos started this in his garage with the name of Cadabra. It was given its present name in 1995. Its headquarter is in Seattle Washington according to the statistics of 2012, 88,400 employees are working in the office and its revenue is about 61.09 billion US dollars. Firstly starting as an online book store, it developed itself as the largest online store of DVDs, software, mp3 downloads, videogames, furniture, toys, food, jewelry and many more things. Amazon is present in many countries as separate selling websites like America, Canada, Brazil, France, Germany, UK, Italy, Spain, Japan and china. As the internet banished the geography, so did the Amazon. Today, there are 1.7 billion internet users as compared to the 3600 million in the year Jeff Bezos started the Amazon. So, it also globalized along with the globalizing world (Wasserman 2012).

During the initial years of e-commerce, many predicted that the internet would lead to a ‘frictionless economy’ with lower search costs and availability of better information over the internet. Generally people feel that if a product is purchased online, they would be in a position to take advantage of the fixed price displayed online which would in most cases be lower than the retail prices in the customer’s country. However, the headline price displayed is not always depict the full cost of purchasing that product as the ‘hidden’ costs are not mentioned. Hidden costs may be shipping charges (postage and packing), tax liable on purchase.

In 2013, global e-retailer Amazon made over 74 billion dollars in sales (“Amazon Income”) . In addition to its primary e-retailing function, the company owns many subsidiaries, including companies like Audible UK and IMDB (“Subsidiaries”). Jeff Bezos, CEO of Amazon, defines the company’s core values as as “customer centricity, putting the customer at the center of everything we do, invention. We like to pioneer, we like to explore, we like to go down dark alleys and see what’s on the other side” (“Amazon”). Since its inception in 1994, Amazon has led the e-commerce market, continually expanding and innovating to become the corporate behemoth it is today (“About Amazon”). The development of new technologies that set trends in Consumer Behavior has been critical to its success; many of these developments build on its pioneering software patent--One-Click.

Today’s internet offers a virtual world of opportunity and while venture capitalists are more prudent about offering funding for dotcom businesses, driven entrepreneurs with good ideas are still devising ways to build solid businesses that harness the power of the internet. Amazon.com is one such e-business. It reaches millions of people worldwide and by utilizing smart business practices; Amazon.com staked its claim to a piece of cyberspace and became a billion-dollar business. Its success can be attributed to being an e-business that is innovative, smart, and quick to react to the changing consumer interests.

Target’s main competitors are Walmart and Kmart who operate similar discount retail chains, with the former leading by employing competitive pricing through a lesser focus on quality and dominating the market with its massive product mix. Amazon, the e-commerce king, is another key player within the competitive environment. Its digital focus, obvious lead, ubiquitousness and minimized physical infrastructure make it a serious barrier to entry into the online retail market, a point that, as digital purchasing becomes more prevalent, all retail brands are having to reckon with.

EBay Inc. (EBAY) is a leading global commerce platform that enables individuals and businesses to buy and sell products online. Over the past 20 years, it has become one of the largest online marketplaces, with over 159 million active users around the world and more than 800 million items for sale. EBay’s vision is “one that is enabled by people, powered by technology, and open to everyone” (What We Do). EBay runs a more decentralized commerce system than Amazon and other e-commerce companies. Their purpose is to act as a facilitator of peer-to-peer commerce rather than maintain their own inventory and sell directly to consumers. This gives more power to eBay marketplace sellers and allows for both auctions and fixed price sales. (EBay vs Amazon) With new startups on the rise such as Etsy, SellSimple, and Threadflip, along with e-commerce veterans such as Amazon or Alibaba, eBay has to continuously work to improve its services to maintain its sellers and continue to attract a larger consumer base. (Thomas) Using information technology and improved information systems has helped eBay achieve their goals and differentiate the platform in an increasingly competitive market.