Still, she noted that Amazon was building dozens of warehouses across the country and hiring tens of thousands of employees for them. “It has all these fixed costs now,” she said. “I think they’ll have to start charging more for shipping.”
Read more at: http://www.nytimes.com/2013/10/22/technology/sales-are-colossal-shares-are-soaring-all-amazoncom-is-missing-is-a-profit.html?pagewanted=2&_r=1&
Albeit its stock is at record high, Amazon lost money in 2012, and analysts anticipated another loss when the company released its third-quarter results last week. Even though its incredibly soaring sales, the company is missing profits.
Thus, do you think that the model of putting down profits for
the sake of growth will be able to pay off for the company in the next
future?
And, if not, what could be Amazon possible alternatives in
shifting and innovating its business model?"
Group: PDF Management
RispondiEliminaWe do not think that the model of putting down profits for the sake of growth will pay off in the near future because we do not think that customers next year will remember what you did for them today. Furthermore, increasing prices of goods/services that were Amazon's main selling points (very cheap shipping) will undoubtedly create dissatisfied customers.
A possible alternative could be having a common price on shipping and try to keep prices of goods low. Furthermore they could be more strict on returning products and reimbursing. Another idea could be to have a smaller array of products and thus decreasing their fixed costs.
Great, those seem to be possible alternatives (more strict policies, equal shipping prices, etc.). However do you really think that customers will not remember tomorrow what you did for them today? I believe they will, at least, repeat the purchase next year, or next time they need to buy, memorable of the prices Amazon set down for them. That is how the company tries to build a trusty relationship with their customers. What do you think about it?
EliminaGroup PDF Management:
EliminaOf course, customers will remember what Amazon is doing today, but we do not think it affects their loyalty as much as the price does. Suppose they give you free shipping for your goods today, but in a year they raise the price of both the product and shipping. Ultimately, customers' main focus is on price, and if you provide cheap or even free shipping today, and change it next year, maybe the customers feel cheated.
Yep, that is what I was arguing: what Amazon is doing today (putting aside profits, that may derive from setting higher prices, for the sake of growth) will be remembered by its customers as price is, for the majority of them, the main driver to purchase ( an anonymous saying states that 'there is no brand loyalty that couldn't be won by an even small price reduction'). Thus each shift (be the one in shipping policies or in reducing the array of products), to avoid creating dissatisfied customers, should be really well managed and strategically planned.
EliminaGroup: ReJa
RispondiEliminaAt the moment, Apple and Microsoft are dominating the mobile phone market. The operation systems Android and iOS are the hypes nowadays. Blackberry missed this train. So it is essential now to see which company will buy Blackberry and how this will influence the IT market.
If Lenovo buys Blackerry, there will be a new rival which the other two big companies hadn't to compete yet. With the name Blackberry, Lenovo will a have a huge advantage entering the western countries as in Europe and the United States, because it is well-known brand. They will profit from the statue Blackberry has requiered until now, and regain the strong posititon it had on the mobile phone market.
The lanscape will be split up, no more in two but in three parts in the american and european market.
That is a good insight about Lenovo rationale; the company's acquisition of Blackberry may contribute to restructure the related industry panorama. Instead, what is your opinion about another giant strategy, Amazon's one?
EliminaAmazon's current strategy is putting aside profits and focusing on growing. It's great for customers that they offer cheap services but Amazon can't continue like this because they need money, make profit to stay in the market and satisfy their investors.
EliminaAmazon has to be very gentle with raising their prices in the future if they want to keep their current customers, or adding more/better services to keep the customers happy.
Of course people will remember the name Amazon, but remembering only the name as being cheap and good may fast be forgotten because at the end the current prices are the ones that count and that will make the decision about the future of this until now successful company.
Amazon's current strategy is putting aside profits and focusing on growing. It's great for customers that they offer cheap services but Amazon can't continue like this because they need money, make profit to stay in the market and satisfy their investors.
RispondiEliminaAmazon has to be very gentle with raising their prices in the future if they want to keep their current customers, or adding more/better services to keep the customers happy.
Of course people will remember the name Amazon, but remembering only the name as being cheap and good may fast be forgotten because at the end the current prices are the ones that count and that will make the decision about the future of this until now successful company.