Marketing essay assignment help: Amazon – Success and Failures
Amazon has been delivering great services to its customers when compared to Borders. Borders had low management strategy in the organization, because of less interaction in the company. The company Borders did not have any idea about the taste and preferences of the customers and also talented, skilled and expert people were lacking in the company, while on the other hand, Amazon tried to know the feedback of its consumer and created strong online presence in the minds of the consumer. Thus, the reasons for Amazon’s success, and Borders failure and the change adaptations are discussed further.
History and Business
Amazon, which is the most customer centric organization, started its journey in 1995. Amazon used e-commerce business model to run its business worldwide successfully and came to be known as the world’s largest retailer. In the beginning, Amazon started their business in the name of Cadabra.com and today it is operating the whole of its business in the area of selling books. With time, Amazon expanded its business by diversifying strategies and began selling everything as per customers’ requirements online. Currently Amazon has 24,000 employees and generates $ 24 billion revenue in the year 2009. During the whole journey of success, Amazon faced numerous logistics problems but at the end due to least expensive place for shopping and due to its better management strategies, Amazon achieved success which was second to none. Amazon started its journey as “Earth biggest bookstore” where in as per customers, the requirement the e-commerce company entered into other media, including DVD, CDs, VHS and many other varieties of products like electronics, toys, furniture and apparel (Chacha.com, 2012).
Borders group Inc. was founded in 1971 by Brother Tom and Louis Borders in Ann Arbor. In the initial phase, the Borders bookstore, established its first shop with used books stock in two rooms above 209 state streets. In the year 1988 Borders group Inc. recruited Robert DiRomualdo to lead and execute the business expansion plan. In 1991, Borders started integrating music and movies into some of their stores. In 1994, Borders was acquired by the Kmart Corporation and created Borders-Walden group. Borders also expanded its business drastically and in the year 1995, the bookstores were renamed “Border group Inc.” In the year 1998, the Borders group inc. launched its website “Borders.com” for online presence. Later on, the Borders group signed a deal with the Star Buck that is the best coffee chain. With time, Borders also entered into non book products like toys and games. But, at the end, due to huge losses in 2010 the CEO of Borders group Inc. declared bankruptcy in May 2011 (Bomey, 2011).
The management approach each took to Internet marketing and sales
Amazon’s marketing strategies are based on six main concepts:
– To use eco-friendly interface for better enhancing the services.
– The company offers great products and services to its customers.
– The company deals with small to large scale industries in its field.
– There is an affiliation in its products.
– The communication and interaction system is good in the company.
– The behavior of the company in responding to the customers is good.
– Amazon focuses on its customers with the help of better talented people and always applies new concepts to make them happy and satisfied.
The main focus of the company has always been customers. Amazon is always finding new customers and has strong online presence for its existing customers; whereas, Borders were very slow in terms of approach and online presence. Amazon has built high reputation and strong network whereas Borders did not have strong reputation with its customers. Borders group Inc. launched its website “Borders.com” in the year 1998 for creating an online presence. In the year 2001, CEO Greg Josefowicz of Borders group Inc. had to make the contract with online retailers Amazon to sell its products in the market as Border was unable to meet the customer needs, maintain strong reputation and execute strategies that were beneficial to it (Marketingplan.net, 2012).
To analyze, there were different reasons for Amazon’s success discussed below:-
Amazon was successful with certain key parameters such as:-
- Amazon controlled the internal retail market and thus they were also able to control the purchasing power of the online customers which was the reason of great success for the company.
- They focused on customers and tried to maintain the good relationship with their customers. Thus they also added high variety of products to their online store. This created great presence of the company, added high value, and maintained strong reputation around the whole world.
- Amazon focused on every aspect to deal with the solutions and customers effectively.
- They had a strong vision and strong leaders for their company.
- They provided easy accessibility and availability to their customers which proved advantageous for the company.
- Best services, strong support and network, good processes created high level of awareness, good reputation among customers and also there were no complaints because the response system of the company was very fast and the staff members of the company dealt with everyone positively and with positive behavior.
Border’s reasons for failure
Three main reasons why Borders, which although initially was successful and profitable, ended up in failure, which is mentioned in Chapter 11 is as discussed below:-
- They had no particular goal and vision for the company. There was no stability of leadership in the company and also the leaders of the company were directionless, so that they were not able to decide, how to lead the company.
- The company outsourced their online operations to their competitor named Amazon.com. The company opened its stores in different locations and never tried to look for the needs of the consumer. They were very slow in terms of responsiveness to the customers.
- They were too much focused on increasing the profitability and thus, they never believed in maintaining a good relationship with their customers.
Change adaptation from market conditions
The extent to which the management of each company adapted to changing market conditions is discussed below:-
When comparing both the companies in terms of changing market conditions, the management of Amazon successfully adapted to the changes in the market conditions.
- The company wanted to make the profits by selling the books online and thus their values and vision were flexible. Innovation and creativity was the major focus of Amazon. Thus they were successfully able to change their vision and strategies as per the market conditions.
- On the other side, Border was struggling with the decision of management to react through the market conditions and changes in the market trends.
- For their physical outlets, they were bound to leases and other expenses.
- They were also not able to understand the needs and preferences of different types of culture and used their business model of United States, worldwide.
- Their level of competition did not allow them to adapt through the market changes for flexibility.
- Borders were stuck in the previous methods and previous strategies and they were not at all proactive in terms of leading the industry whereas Amazon was really active in terms of strategies and other decisions. (Kary, 2011)
Amazon was flexible in their decision making, skills and power. They were participating in “Pay per click” advertising that described about the number of customers that have searched and reached through the website of Amazon.com. In the year 2009, Amazon had terminated its practices and strategies and re-evaluated the investment made for advertisements. New form of advertisements was released through the help of some software that is linked with their websites. Borders experienced changes in management but they were lacking in terms of knowledge and creating the vision to grow the company effectively and efficiently. They were not flexible in terms of their decisions and they were also not up to the date. The company Borders made the changes which was not at all useful and special to create the attention of the customers.
To recommend, the company could have inculcated high flexibility through proper goals and proper decisions. There are different ways to build the strategic flexibility for decision making and those are as discussed below
- Options should be kept open, for implementing better decisions in the organization.
- There should be proper strategy made for promoting the goals and outcomes of the organization. Continuous strategy should be developed for effectiveness. Strategy should be modified according to the plan.
- There should be alternative strategies to measure the expected results and to modify the transformation of the decisions. (Kelley, 2011)
The core business has been discussed for both the companies and also there has been the comparison on management approaches of two different companies with respect to internet sales and marketing.
The three reasons has been related to the success of Amazon in the first five to six years in which there has been the focus on the creation of attraction by Amazon to its customers and also the reasons for Border’s failure with respect to its outdated and old strategies, have been stated. The next part describes about the adaptation of changes with respect to market changes and there has been a discussion on recommendation for both of the companies.
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