Books Online
One might say that the business world is moving at a fast pace, a pace that is almost impossible to keep up with. This could be the result of the almighty Internet and the world of technology. In today's society, technology has revolutionized how we as consumers make decisions and procedures regarding the process of consumption. The Internet has made many vast improvements within our culture, both online and off, which is allowing the average consumer to buy retail by using little to no effort. Online retailing is a fairly new industry, and new companies are jumping on the bandwagon at a very fast pace. This is causing competition to come into play, which is forcing online retailers to change their initial goals. Amazon.com was one of the first online retailers to introduce online book selling. Amazon started strictly as an online bookseller; however, through time they have evolved into the largest online retailer, offering over 16 million items for sale on the Internet. Only a few online retailers are a threat to Amazon; they are Borders.com and Barnes and Noble.com. The purpose of this paper is to focus on the online booksellers and how they are homogeneous within their market.Online booksellers are booming within the
Amazon.com consists of Jeffrey P. Bezos, CEO, 3000 employees, and an ever-changing web site. Their web site is updated daily, adding best sellers to the site and also informing consumers with book reviews, which can be the critical point for a purchase. The goal of Amazon.com is for it to be the most customer-focused company ever, both online and off. With decreasing obstacles involved in the purchasing process, Amazon created the "one-click" ordering, which lets buyers store credit cards and addresses after the first purchase. They have also installed software that assesses what past customers have bought and suggests other purchases. The result: Repeat purchases account for 66% of sales. (Article): Cover Story, 1999. "Amazon.com vs. E-bay." Business Week, May 31, 1999. P128-140. The idea for releasing customers' opinions and suggestions can reduce a risk that one might uphold regarding the purchase of a book. They also have a "star rating system" which gives 5 stars for a book that was well liked, and 1 or 0 stars that was either boring or poorly written. These procedures put relevant opinions and information in perspective for future customers; therefore, can influence a sale. Amazon.com is in coordination with Yahoo! , one of the Internet's largest distributor of information, to feature its online book-selling and other items using direct links and advertising banners. This alliance brings together the web's leading information provider and largest online bookseller to provide users with access to information on the Internet. The companies involved will also benefit by sharing distinctive competencies that will improve the strategic position of both companies. Yahoo! competencies include specialty programming, content distribution and networking of globally branded properties. As being the first online guide to the web, Yahoo also has brand recognition that will help to further expand the visibility of Amazon.com and broaden its customer base. Amazon brings to this business relationship core competencies such a reputation as the leading online bookseller, efficient distribution channels that allow for fast delivery to customers, and brand loyalty. These benefits can be attributed to Amazon.com's first mover advantage. As the innovator in the online book selling industry, Amazon.com has gained brand loyalty and key resources that play an integral part in its domination of this industry. Consumers that purchase items from Amazon.com that are satisfied with the service they receive will most likely buy from them again. This is indicative of how high psychological customer costs are associate with using another online bookseller, though the switching cost associated with changing vendors is low. This brand loyalty that customer exhibit is also a factor affecting rivalry in the five forces model. It reduces Amazon.com's probability of losing customers to competitors such as Barnes and Noble.com and Borders.com. Key resources such as the location of distribution sites have also helped in securing Amazon.com's position as industry leader. The editor-in-chief for Amazon.com also was quoted, saying "Suddenly the Internet is revitalizing the critics role as online opinion leaders sway shopping habits to a degree that almost no one expected" which continues to support the theory that online booksellers will continue to grow at a rapid and steady pace. As mentioned before, the three main online booksellers today are Amazon.com, Barnes and Noble.com, and Borders.com. Of the three, Amazon is the clear leader with Barnes & Noble and Borders in the background looking for ways to catch up to Amazon. In order to fully understand the situation we need to evaluate each company's strategies and look at relevant performance measures for each of the three (and compare them). One useful performance level for stakeholders is stock price. As of June 29, 1999 Amazon's stock price was 116 and 1/16, Barnes & Noble's was
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Approximate Word count = 4768
Approximate Pages = 19 (250 words per page double spaced)
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