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Advantages Of Amazon.Com Being The First Mover In E Commerce.

1301 words - 5 pages

E-commerce (electronic-commerce) refers to business over the Internet. With the growth of commerce on the Internet and the Web, e-commerce often refers to purchases from online stores on the Web, otherwise knows as e-commerce Web sites. The e-commerce marketplace is intensely and savagely competitive. Mellahi and Johnson (2000) noted that major sustainable competitive advantages are almost non-existent. That means that firm's market advantage such as economies of scale are no longer enough to make a firm secure in the e-commerce marketplace. According to McCrohan (2003), the e-commerce market has raised the level of market dynamics such that firms face constant challenges, disequilibrium and change. This also means that firms must adapt accordingly by providing superior customer satisfaction and shifting the rules of the game constantly.Amazon.com was the first company to move book retailing from the bricks and mortar industry on line (Machlis, 1998; Munk, 1999). In addition, no company so far has done more to show how the Web overturns conventional assumptions about distribution than Amazon.com. (Fortune, 1997). The Economist (2000) noted that the name Amazon.com has become synonymous with e-commerce and it is one of the few Internet brands recognized world over. It added that the company is the most visited e-commerce Website in the USA, and one of the top two or three in the UK, France, Germany and Japan. Rapid and continuous innovation in the electronic commerce area has been Amazon's heritage (PC Week, 1999). For instance, in 1995 Amazon was the first company to truly harness the power of the rapidly expanding Internet to provide an online book retailing service to consumers. Amazon has also been the first company to enable consumers to search for, and order, hard-to-find books as easily as best sellers (Postrel, 1996). Amazon followed up this innovation rapidly by offering its customers "one-click". The "one-click" programme streamlines the buying process by storing detailed customer information, including credit card numbers.Furthermore, Amazon has been the first online company to use collaborative-filtering technology, which analyses a customer's purchases and suggests other books that people with similar purchase histories have bought. Such valuable information has proven very effective in capturing new markets online and mass customization. In addition, Amazon has been the first online company to introduce two innovative processes to facilitate customer purchases. Through its acquisition of Junglee Corp in August 1998, Amazon has developed comparison-shopping that gives customers a way of finding products that Amazon does not sell directly. Reciprocally, Amazon's affiliates programme, which numbers over a quarter of a million participants, directs customers from other sites to the Amazon store site. In this programme, participants receive a commission for each referred purchase made from their site (Warner, 1999). Amazon has also been...

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