Amazom.com is clearly one of the true successes of the at times faltering dotcom phenomenon. The value chain that the firm has created depends upon several factors: 1) Amazon has no bricks-and-mortar retail outlets and is entirely virtual; 2) the firm began business with its own warehouses to increase the speed and reliability of order delivery; 3) the company provides an online selling venue for other businesses that supply the company with goods and services that expand those that Amazon.com possesses; and 4) the firm uses economies of scale to discount pricing on a wide range and variety of synergistic and no-synergist products or services, thus undercutting competitors (E-Business Strategy - Virtual Value Chain, 3). The firm has optimized its value chain by moving products directly from manufacturers in such diverse fields as publishing, film and music, apparel, and consumer electronics to consumers who use the Internet to obtain desired goods or services at a competitive price (Shatzkin, 1).
Further, Amazon.com has improved its value chain by allowing frequent shoppers to obtain almost unlimited shipping for $79 per year. This feature adds significant value to the shopping experience. Fowler (B1) noted that in response to this feature, several dozen retailers including shoemaker Rockport and consumer electronics firm Radio Shack have banded together to offer reduced shipping costs for items bought online. This is a direst response to Amazon.com which demonstrates the enormous influence of this particular firm in virtual retailing.
Amazon.com's competitive advantages from the value chain perspective include: strong technological infrastructure with a single platform; high investments in technology development such as its Kindle to leverage digital products; great product forecasting system; print on demand; easy, fast, and safe payment systems; a 24 hour operation with no downtime; and
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