?Executive is not only one of the largest
?Executive summary- 200 words 0Introduction – 400 words 0Analysis 12. Characteristics of business design at brick and mortar shops and Amazon e-retail in India. 12. Amazon service operations strategy to compete India 33. Challenges facing Amazon in India 54. Can present Amazon business model in India be the future model for sustainable success in retail industry? 6Discussion and Conclusions 6?Executive summaryThe purpose of the report is to analyse and discuss Amazon’s business deployment in India in 2013. The report is focused on analysing the case study of Amazon in India: the Road ahead.The report starts with introduction to the case study, it briefly explains Amazon business concept and highlights the reasons why company decided to develop its operations in India. The main body of the report addresses the questions on customer perceptions of physical stores and Amazon online retailing. It also outlines Amazon’s strategy of service operations in India and highlights the main initiatives adopted by the company to compete in the market. Further the report outlines the challenges facing Amazon operations in India and explains if present business model can be used to succeed in the future. The last part of the report includes discussion and conclusions emphasising on successful strategies that worked for the company and helped to achieve the results. Introduction – Today, Amazon is not only one of the largest online stores in the world, but also one of the leaders in sales in general. In addition, to the United States, Amazon operates in Europe, Asia and India. Amazon began with its online bookstore in 1994, the initial business model was focused to sell one type of product through the internet from wholesalers directly to customers. As Amazon started expanded its product catalog the website began to transform into ecosystem based on wholesale purchase of different goods: strategically located logistic centers and contracts with local and foreign carriers enabled the company to ship their products through the United States and to other countries. By 1997 the company became the first online retailer serving millions of customers. To date, Amazon.com offers its customers dozen different product categories including electronics, clothing, sports goods and even food. The case study of Amazon in India highlights the growth of Amazon that was driven by acquisition of e-retails platforms such as Joyo, Audible, Zappos, Avalon books and more. Its expanding product range and continuous innovativeness boomed companies to success in a very short time. Being marketplace number one in the US and Europe, in 2013 Amazon decided to enter India’s retail sector. India is a very promising market for the development of e-commerce, due to young and tech savy populationLack of internet usage across the country and little experience in online shopping opens a huge potential for e-commerce due to the future expansion of India’s internet access. Another advantage for e-commerce business in India is a disorganization of brick and mortar shops, the advantage to acquire small cities and the increased experience of Indians in making purchases using mobile phones. ————2. Business design characteristics from customers perspective. 1000 words https://otherreferats.allbest.ru/marketing/00186085_0.html Analysis2. Characteristics of business design at brick and mortar shops and Amazon e-retail in India.According to Onfrei (2017) customer perception refers to how customers value the quality of service and determines the degree of satisfaction. Perception is always related to the clients expectations of the service.The basic concept of the customer perceptions are focused on the service quality and satisfaction, it is usually centered around the value received by the customer from using the service. Customer requirements are the priority for Amazon and the company is focused to deliver relevant products to meet customer needs. Amazon delivers cost efficient, qualitative goods always on time and offers convenient and secure system of payment. Service concept also assumes the creation of positive impression for the clients, therefore Amazon seeks to maintain good image of the company, constantly updating the website and expanding product range that makes shopping process pleasant and enjoyable.The concept of “product value” combines several factors such as price, quality of goods, speed of delivery, customer service and new technologies. Amazon takes into account all five aspects. The website offers quality products at discounted price, Amazon guarantees fast delivery of goods, regardless of the location. Amazon has made searching for buyers easy; With your “Buy Now in 1-Click” option, for example, Amazon automatically completes the delivery address, billing address and payment details fields using previously stored information.During the shipping, customers can track the parcel from the moment of shipping until the delivery, Amazon offers its customers a tracking code within a few hours of making the purchase, and updates the shipment status if the package is late . Proactive customer service is the key to Amazon’s shipping strategy, and the company ensures that customers are aware of the status of the shipment at all times. If a problem arises, Amazon communicates it to its customers before customers recognize the problem and contact the customer service department.Amazon Service Quality The quality of the service is the difference between the expectations of the service and the perception of the service received Onfrei (2017). Service quality is a major factor that determines Amazon success. Amazon puts the consumer at the center of its strategy and makes its interests more important to those of the company itself. Amazon differentiates customer service and customer experience, Amazon’s CEO, Jeff Bezoz explains that company aims to minimise customer service interaction between consumers and Amazon employees, putting emphasis on providing excellent customer experience when there is no need to contact customer support and rather keep customer service agents available for extraordinary situations (Green 2009). In the report by Green (2009) published in Businessweek, Bezoz said that internally for the company, the shopping experience is a component of the consumer service. Customer shopping experience includes lowest price, fast delivery and reliable service keeping the customer service for really unusual situations. Brick and mortar shops – 500 wordsNowadays in India, as well as many years ago, the predominant retail trading is set abound street vendors and brick and mortar shops, usually these are small, local shops run by private individuals. The largest players in the retail market are the Indian corporations such as Future Group, Reliance, Bharti, Aditya Birla, Vishal and Tata. In the developed economies Internet trade is growing, using the existing bank systems, online stores and logistics services. In India, retail trading takes special attention by manufacturers, distributors, sellers and buyers. India’s retails sector is very promising but yet has to be built. Delivery of the produced product to the buyer is an essential element of the business chain, its completion, a pledge of profit, In India, this becomes a big problem. The country is large, it is the second largest in the world in terms of the length of the road infrastructure, but only half of it can be used year-round. A significant part of rural areas does not have access to fixed communication. At the same time, as recognized by a number of large online companies, a significant part of their cli resides in India outside large cities. In small towns, especially in villages, the delivery of online orders is complicated.Cash & carry sector creates loophole for foreign trade companies seeking to enter the Indian market. However, foreign corporations operating on Cash and Carry basis have the opportunity to supply Indian retailers and thus develop links in this sector. Under existing legislation, foreign investors working in the cash & carry sector have the right to own 100% of the shares in their business. This way has already benefited a few large foreign companies, the absolute leader in the global retail market – American Wal-Mart, which has concluded a strategic alliance with the Indian Bharti Group and British Tesco, who has entered into an alliance with the Tata Group. Now both Wal-Mart and Tesco are developing in India an unusual format for cash & carry. At the same time, both of them are engaged in creating a reliable network of suppliers that will help them to enter the retail sector promptly as soon as the government abolishes existing restrictions on the operation of multi-brand stores.https://www.imemo.ru/index.php?page_id=502=2310 2. Amazon service operations strategy to compete India Amazon decided to enter India and the fact behind that is that India is second world’s most populated country in after China, from which around of population 35% are internet users (Wadhwa, Vashisht and Kaur 2017). Amazon entered India in 2013 and since then it has been multiplying its size. Fearing that the market will be snatched, as it happened in China with Alibaba, Amazon continues to increase its size to face local competitors such as Flipkart and Snapdeal. Case studyTo sustain competitive advantage in online retail, businesses should seek more innovative approaches to attract customer by bringing the value to them. Value proposition indicates how product or service can fulfill customer needs Onfrei (2017)To attract Indian consumers, Amazon joined in partnership with mom-and-pop store to expand its delivery service options. Amazon recognizes that many potential customers living in remote areas without having internet access, mom-and-pop stores allow people to come and use owner’s internet to search goods on Amazon website. Store owners then takes customer orders and pass it to Amazon, collect cash and alerts customers on order delivery. Using technology of acquired e-commerce business such as Junglee.com, IMBD.com, Zappos.com Amazon is able to provide customer values at low costs. Company also uses CRM to capture consumers behaviours and create various offers based on search preferences (Wadhwa, Vashisht and Kaur 2017). Unlike in the US, Amazon India cannot sell its own inventory directly to the consumers due to government regulations on foreign companies, which doesn’t allow to operate retail sales of own inventory. Therefore, in India Amazon adopted different slightly business model and serves as intermediary between sellers and buyers, thereby Amazon helps local retail business with warehousing and shipping. To acquire the market, Amazon adopted several strategies to build customer loyalty.Amazon fulfilment centresTo operate in India, Amazon also had to adopt fulfilment and delivery of orders. To join Fulfilment by Amazon (FBA) and set up an online store, Indian retailers should register as Third Party Sellers (TPS), which enabled registered TPS to start selling their products online across the country and receive professional services such as order processing, customer support services and collection of payments. FBA allows to store and distribute products, so Amazon implemented FBA in India and to date has built almost two dozen warehouses there, the largest in Kothur (Telangana, India). Also, sellers have an opportunity categorise their products for Amazon Sponsored Products, those than can be collected from TPS and delivered to Amazon Fulfilment Centers where items will be stored, packed and shipped from Amazon Fulfilment Centres once TPS will receive an order. One day delivery and free shipping are also available on certain products. Chai Cart and Amazon TatkalAmazon is seeking to attract not only large companies but also small and medium businesses. To ensure business owners learn and get familiar with the concept e-commerce, Amazon introduced “Amazon Chai Cart” program that included mobile carts that travelled the streets and served fresh drinks to small business owners and thus teached them the benefits of online retailing. Amazon Tatkal is a training suite that includes registration and launch services, image, catalog and sales trainings to enable SMB’s to start selling online in just 60 minutes. Easy Ship and Pay with AmazonAmazon introduced Easy Ship program and Pay with Amazon system, Easy Ship allows Amazon courier to collect packed parcel from the seller’s location and deliver it directly to the customer location, then the payment is collected by Amazon courier and seller gets the money on its TPS account within a week. Case studyTo build customer trust in Amazon products, orders are safely packed and timely delivered to the customer. To ensure fulfilment of delivery, Amazon India created partnership with courier services such as India Post and Blue Dart. Amazon NowAmazon Now is another recent initiative that promises two hours delivery service of groceries. Initiative was launched in Bengaluru and Karnataka. The service greatly benefited small and medium businesses and due to its growing success Amazon intend to expand the initiative to other cities. In addition to all of the above competitive strategies, Amazon gives an opportunity to Indian businesses to carry out global sales in 11 countries. Business owners should do special registration and meet quality standards of products to be sold. Currently over 12,000 third-party sellers participating in the program. Case study3. Challenges facing Amazon in IndiaAmazon in India faces complex business challenges such as FDI government regulations, infrastructure, payments, technology usage by consumers and resistance to adoption of online sales platforms. The first challenge for Amazon to operate in India was the entry into the country’s retail market due to government restrictions for foreign companies to sell directly to Indian consumers. FDI regulations allowed 100% of foreign direct investment only in Business to Business e-commerce. To overcome this challenge Amazon entered Indian e-commerce with two categories of products, books and movies. After opening the Kindle books store for Indian consumers, Amazon began to sell its e-readers through the Crona retail outlets. After Indian government eased the regulations of e-commerce Amazon could expand its product range and develop large marketplace for Indian market through Third-Party Sellers (TPS). case studyAnother challenge facing Amazon as an e-commerce business is a limited infrastructure in the country especially in the rural areas. Also, the economy of the country does not propose commitment of online transactions,therefore the use of bank cards is not common in India. According to Wadhwa, Vashisht and Kaur (2017) only 12% of people have credit or debit cards. The use of mobile phones and access of broadband is also vital for e-retail to sustain the business. Beyond that, due to traditional street and market retail Indian consumers are used to sample the products before the purchase, this may act as an obstacle to selling apparel, accessories and home decor (K. Sharma and Misra 2014).Indian consumers are price conscious and seeking for global quality at a low price, this squeezing the margins across sellers. Products sold online are expected to be at lower price than the alternatives sold at traditional markets (K. Sharma and Misra 2014). So far Amazon managed to sustain low price concept, however tough competition comes from the main competitor – Indian Flipkart. Flipkart is the main competitor of amazon in India offering inventory of 40 millions of products, including fashioned goods, branded items and own produced electronics. In addition, Amazon facing competition from the other retailers like the Future Group, Reliance, Birlas and Walmart. Even though Walmart is brick and mortar, it is recognized Indian consumers as lowest price grocery and merchandise shop. Walmart acts as an alternative to online shopping offering a competitive price and large volumes of inventory. If Walmart will enter e-commerce it will be not easy for Amazon to compete. 4. Can present Amazon business model in India be the future model for sustainable success in retail industry?Amazon business model in India differs to traditional model used in US. In india Amazon used more of a “going local” business approach taking into consideration market specific factors. Amazon emphasized on the development of relationships between suppliers and consumers and it’s deemed to be successful and serve as industry benchmark. Amazon well positioned itself as the place selling low cost goods for unique customer experience, such service concept eventually increases traffic to the website and motivates businesses to join Amazon. Amazon used various strategies to get more sellers on the website that led to reduction of bargaining power and initiated competition among suppliers. The indirect suppliers rivalry benefits Amazon with the advantage of low cost sourcing.If Amazon will follow its business model it will be able to re-shape online retail industry to suits its interests and meet long term objectives. Its well planned and managed business model that has all real opportunity to be successful in the future. Amazon investing not only in industry itself but also in its infrastructure, it creates partnership not only with online retailers and digitally advances businesses but also seeking to collaborate traditional retailers such as Big Bazaar and small to medium business who never been into e-retail.Its cash on delivery option, easy ship delivery, variety of products and consistent acquisitions contributed to its success and played as main drivers of strength. Discussion and ConclusionsAmazon made an indirect entry into Indian retail sector through the Junglee.com, the platform allowed Indian customer to search products online but to buy. To purchase them online was only possible through the link that redirects onto the seller’s website. This approach helped Amazon to build a gateway between consumers and suppliers and thus learn consumers behaviours in decision making (Padmanabh B* 2012).Amazon’s competitive advantage strategy uses a combination of low price, quality service and fast delivery. Its distinctive feature is the focus on a high quality customer service. The online store offers a wide range of products at a competitive prices and providing excellent quality of service which is highly valued by the buyers. Internal operations of the company also focused on this strategy which helps to raise trust of external suppliers and increase customer satisfaction. Consumers in India are conscious about spending money and always looking for an alternatives to reduce costs. The launch of Amazon Prime worldwide greatly contributed to increase the number of loyal customers in India. Amazon prime offers one-two days assured delivery for fixed annual subscription costs, in addition to that customers get lightning deals offers every day. Case studyOnline retail industry experiencing a rapid development worldwide, the transformation of retail industry and emergence of online sales platforms bringing together physical shops and their customers over the internet. The arrival of online retailers have been motivated to fill in the gap between the customer and the retailer in terms of product choice and price.Retailing in India is a very sensitive issues as it acts as the main source of income for millions citizens in rural and urban areas. Retail in india is very disorganized and attempts have been made to organize by building supermarkets and malls, which caused the political resistance by local retail businesses. Also, India’s e-commerce experienced growth reaching 38 billions USD in 2016 in comparison to 23 billions in 2015 case study. Yet, the success of an e-commerce rely not only on initial business model but in the ability to develop a customised business approach to suit local economical system (K. Sharma and Misra 2014). Amazon has already well established consumer market in US, however Amazon India is still in development phase and facing different challenges. Marketing by Amazonhelps sellers to reach potential customers by advertising amazon sponsored products, offering initial free impressions and pay per click marketing models.