This report looks into Amazon.com through it inception, rise, and how it has rose from one development to another. It shades some light into how it has, over a period of time, diversified its products and services for its wide range of customers’ tastes and preferences. This paper also, highlights the recent instance where consumers have been confused by availability of almost similar products and services. To distinguish the difference between Amazon.com and BornesAndNoble.com, a table drawing a line between the two along different factors. Finally, this report looks into the prospects of BornesAndNoble.com extending its market scope similar to Amazon.com, as well as what Amazon.com would require in expanding its chain of distribution.
Amazon.com started from the year 1994 in the state of Washington only to receive a redo of the same in 1996, in a different state which was Delaware. The progress it has made of late dictates that the cash flow relies on increasing the operation of income as well as efficiently managing the working capital, as well as the capital expenditures. In essence, the company is a leading company that deals with sales over the internet. It directly sells to the public and acts as a platform for a broad range of products in the market. As a result, it has diversified itself in a multitude of fields in products.
These include music, books, electronics as well as household products. As a result, of the diversification the company now boasts of a client base reaching into hundreds of millions of customers with about 2 million merchants with a large international market. Through the annual reviews of their expenditures and management techniques, the company has come up with ways of improving on their performance, which they record, periodically through reviews. These include the increase of operating income which would result in the increase of sales of various products and services.
Cons and recommendations
They also improve on every aspect of the consumer experience and which further helps in sales. There are not many cons that could be said except when analyzing the reviews that are a feature with Amazon’s online product. In the past, there was a bit of freedom given to the reviews. At the present especially with the report option present, there is little freedom now as a result of the strict laws on speech used in the reviews (Dolan, 2010). It would be better if the company advocated for a lift of the gag order if it cannot do something that is. This is because it would be better to have an honest review column to save the company the trouble on market research.
Risk factor if the company split
The impact that would result if the company split into several companies to each handle their department would be both catastrophic and reliving at the same time. The risks would be enormous, but the relief would come in terms management as of late the company has been experiencing significant growth in terms of expansion in many departments. These have become quite a handful to handle over the years and have caused a strain on the running of things. This would help them diffuse the stress to different compartments.
However, this may be overwhelmed by other factors that would cause even more stress. These are such that the ongoing business may become disrupted, and management may lose focus on the existing business. There may be loss of personnel from one sector as they are re grouped and taken to another sector. This would cause impairment of some relationships as there is no guarantee that the transition would be smooth. Another thing is that there would be variability in the income or revenue that would be the company’s cash flow as a result of the disruption.
The renewed bureaucracy would be inconceivable as a result of the split and it would be difficult for the company to act as a unit. This would represent the new difficulty integrating under commercial agreements. The trouble in getting all of the new departments to work as a whole may take a long time to push through which might result in losses. The other thing is that the company will split the market in several directions, which might not, be good. The market psychology may become disrupted, and they may not have the same perspective of the market that they had before.
Potential for Barnes and Noble, and Borders
There are many competitors in the same field as Amazon such as Barnes and Noble or Borders. The question for today is if the company has what it takes to become a contender with Amazon. Recently Borders was in a near bankruptcy state although it has since shown signs of a comeback and can still rival its peers in the industry. Recently the number of investors taking a short position in the company doubled and the confidence fell. In short, the market seemed to foretell the bankruptcy of the company in the company (Cassady, 2010).
‘Borders’ seems to be going in the wrong direction unlike competitor Barnes and Noble. The interesting bit is that there is still room for book sellers like Amazon. Thus, the company should not be struggling at the rate that it is now. In the case, of borders it does not have the variety that Amazon has and also cannot keep pace with the consumer demands and technology advancements. Barnes on the hand responded quickly to Amazon’s latest development. According to some analysts it seems that Borders sold the Kobo e-readers customers instead of just developing their own product in the first place (Cassady, 2010).
The two companies do not seem to have a fighting chance of keeping up with Amazon. Barnes and Noble are at a good place but still is progressing too slowly to compare with Amazon. Borders, on the other hand, seems to be suffering heavily from management and technical issues. By the time that a company cannot take care of the customer demand in an open market that is far from saturation, then it shows the level of inefficiency. This is the reason for revision of management technique or personnel. The marketing department can only do so well in a disorganized environment.
Verdict for transition to brick and mortar for Amazon
The word is out that Amazon is looking forward to opening some brick and mortar outlets particularly in the United Kingdom. This is interesting because it seems that the company is taking its business into the world of the physical realm. The reason is that it has had success before in this aspect by beating quit a few bookstores due to the internet when selling books. While the idea, for Amazon to go into the business of mortar and the building is a good one. It is simply technically not probable to do so at the current state.
What is holding the company back is the financial backing to go through with such a project. The brick and mortar chain is quite expensive, and this is just what they might not want to invest. For one, there are perspectives that would suggest that going into this venture would not reward the company as expected which would become a loss in essence. The CEO claims that the company has massive reserves to finance the project but yet it still needs those reserves to meet the goal of profitability at the end of the year (Mahoney, 2001).
At the same time, Wall Street may not take the movement of the company into the market very kindly. Thus, could reconsider at all of the resistance before long resulting in massive losses. There are a lot of road blocks to the procedure although many see the idea as quite juicy (Mahoney, 2001). The variety of products that it offers would warrant such an interest in the transition into that direction. However, for now the idea would too risky to endeavor.