Amazon Company

Amazon

Goal of amazon is to give the option of the same-day delivery

All companies need to be in constant change, no matter how good their business idea is. According to this statistic companies in 1958, remained on the S&P 500 was 57 years; by 1983, it dropped to 30 years and in 2008, it was just 18.

One of the thing amazon did and the why they have been successful since 1999, is that they identify new areas of potential growth by finding new costumers, like IT community, and extracts value of existing business.

They transformed its business from direct sale to a sales and service model, aggregating many sellers under one virtual roof and receiving commissions from other company’s sales.

But the key is their distribution strategy; order processing, warehousing, inventory management and transportation

Their fulfillment distribution strategy is based on their facilities, have them all around the world, from Canada to china. The characteristics of this facilities are the following.

• Big sortable fulfillment centers generally house items that can fit into one box/ one shipment.

• Small sortable fulfillment centers. House items.

• Non sortable fulfillment items that cannot be sorted into a box with other items. House items.

• Replenishment centers, receive products from vendors and move the products to fulfillment centers.

• Costumers returns.

• Specialty sites, items such as jewelry and clothes.

• Grocery sites delivery.

Their fulfillment locations have been made based on proximity to costumers in concentrated areas and state tax implications.

Amazon as mention before has based on this for their success, and if companies like Walmart and best buy, their main competitors, want to be better they have to start working on their network optimization, effective distribution order management and their order cutoff times. Finally, for companies to build a good business strategy they have to concentrate on what costumers need and want, and get good at those things. Costumers are all.

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