eCommerce Case Studies
Case Study 1: Amazon
Amazon, originally called Cadabra, was launched by Jeff Bezos in 1995. It was set up during the dotcom boom of the 1990s with an unusual business model - it did not expect to make a profit until after at least four years of business. While other dotcom businesses grew rapidly, Amazon slowly built strong foundations. Finally, at the end of its fourth year, it made a $2.5 million profit. In 2005, it made a profit of $359 million and in 2006, $190 million.
Amazon's most famous for selling books, but the company also sells a wide range of products from CDs to small kitchen appliances such as coffee machines. Sales in ...view middle of the document...
5 To what extent do you think it is Amazon's responsibility to consider traditional book stores?
6 What other factors could explain the decline in book sales?
Case Study 2 :Tesco
Tesco is a UK-based international supermarket chain - the core retail area is groceries but Tesco has expanded into other retail areas such as clothing and household goods, as well as finance, insurance and telecommunications. It is the largest retailer in the UK and the third largest worldwide.
Tesco was founded in 1919 at the end of World War I
by Jack Cohen, who operated as a one-man trader in London's East End. At that time, food was scarce and Jack bought damaged goods from other businesses and resold them - he learnt the skill of knowing what was in a tin by just shaking it. The first Tesco store was opened in 1929 in Edgeware, London. From these small beginnings, Tesco has gone from strength to strength, with an annual profit of over £3 billion in 2006.
Tesco took advantage of new technology very quickly and began trading on the Internet in 1994. In 2003, Tesco's Chief Executive Officer, John Browett, received an award for the innovative systems which supported Tesco's e-commerce site.
When purchasing online, customers select the products and quantities they want and are given a running total so they know exactly what they will pay, although discounts are only taken off the final bill. Then, a two-hour delivery slot can be booked. The information is sent to the most local store where, on the appropriate day and time, the products are packed and delivered to the customer's house. If any products could not be included in the delivery, a substitute may be included or an apology will be made at the door. The customer signs to confirm they have received their goods.
As Tesco moves into more areas and becomes a bigger organisation, it has been criticised for trying to create a monopoly (which means it would become the only business providing these products).
For more information visit the Tesco website, especially the Talking Tesco section. A link to this website has been made available at www.heinemann.co.uk/ hotlinks. Enter the express code 2315P.
1 Describe Tesco as an e-commerce entity
2 How has Tesco...