Electronic Business and Commerce


Classes 11-12


Topic:
E-tailing: Amazon.com; B2C challenges
Class Plan:

In this class we consider the evolution of the premier B2C retailer, Amazon.com, and study some of the challenges of online retailing.

Required Reading:
Amazon.com: Marching To Profitability (Stanford Case)
Study Questions
1. What are the advantages and disadvantages of online B2C vis-à-vis traditional bricks and mortar retailing?  With your study group, prepare a table that summarizes these tradeoffs.  You may want to compare Amazon.com to the traditional Borders as a starting point.

Your table should consist of 6-10 measures or criteria, and for each you should state what are the advantages of Web-based selling over bricks and mortar retailing and vice versa.  Sometimes the answer is "it depends," in which case you should specify what it depends on and in what way.  Then, provide a short example for each measure or criterion.

Use your table to analyze the desirability of selling three product groups online. Start from books and continue with two other product categories of your choice.

Hand in your answer to question 1. This is a group assignment.

  1. Analyze Amazon's "Cash-to-Cash" cycle (timing of cash flows, similar to the analysis we did for Dell). Can you quantify the associated annual value to Amazon.com?   

  2. What were the three major periods in Amazon's evolution?  What data in the case best delineate them?

  3. Should Amazon do its own order fulfillment?  Why or why not?

  4. In January 2002, Amazon offered free "super-saver" shipping for orders of $99 or more; the buyer agreed to wait 3-5 additional days for the order to ship.  The "super-saver" order threshold was then lowered in June and August, 2002 to $25.  Does "super-saver" shipping make sense for Amazon.com? 

  5. What should Amazon’s pricing strategy be?  Should it use dynamic pricing?