Use of Business Model to Analysis Amazon and Comparison with Alibaba

Industry Life Cycle Analysis

Amazon is also known as Amazon.com, Inc. The company was established in the year 1994. It is a multinational electronic commerce company. The company was established in the year 1994. The company is an America based company. It is a public limited company. On the other hand, Alibaba is considered as a popular Chinese e-commerce company. The company is trying to offer differentiated products at the economic price level. Amazon is considered as one of the leading companies within the global e-commerce industry. Amazon is the leading e-commerce organization within the global e-commerce industry. However, the company is facing real challenges and competitive threats from Alibaba. Both the organizations are focusing on the effective business management approaches. However, the industry life cycle analysis will be conducted in this part of the report in order to determine the international trade and strategies adopted by the majority of the companies.

The industry life cycle framework is regarded as an important strategic management tool. This particular strategic management tool can assist the organizations to determine the actual business position considering the business growth and profitability of the companies. The industry life cycle framework is comprised of four important elements, such as introduction, growth, maturity and decline. In the introduction stage of the industry life cycle, the organizations used to face low production volume and low demand of the products. In the growth stage, the organizations generally face characteristics of the low production volume and high demand of the products. In the growth stage, the organizations used to face the characteristics of the high product demand, high production volume and high market saturation. In the decline stage, the companies have the characteristics of the low product demand and low price.

In terms of the industry life cycle analysis, it can be stated that Amazon is placed in the maturity stage due to several important characteristics of this particular stage in this particular stage of industry life cycle, the products, services and brand name of the company are well known among the important stakeholders of the organization (MGrath & O’Toole, 2014). This is acceptable that Amazon has business presence in several countries including the emerging as well as the developed nations across the globe. In addition, the management of Amazon is also focused on the offering and distribution of the differentiated products. The product range of Amazon includes different types of departmental goods, retail goods, electronic appliances home appliances, books, electronic gadgets etc. Previously the organization is focused on the offering of the books through online mediums (Loveridge & Mok, 2012). Now-a-days, the company used to offer different types of products and services. Most importantly, the organization used to follow the B2C process or the business to customer process in order to offer the goods the target customers. In this contemporary era, the company has succeeded in the establishment of B2B approach. The company has improved or increased the level of the offering of the goods and services as the firm is trying to deal with the business clients. The major reason behind the adoption of the B2B approach is to gain positive and competitive advantages over the potential industry competitors. Most importantly, the organization is going to attain a strong business growth in different types of industry markets across the globe through the consideration of the offering of differentiated products and services to the individual customers as well as business customers (Ommani, 2011). However the management of the company also can take some unique approaches in the business operation process to transform its industry position from the maturity level and growth level.

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The Amazon Inc actually can take the reference of the Alibaba Company, which is becoming a potential e-commerce company. Now-a-days, this is becoming a potential challenge for the companies like E-Bay and Amazon that the companies are really suffering from the competitive threats of Alibaba. Alibaba is becoming an emerging player within the global e-commerce industry. This is also acceptable for the company management to ensure that the adoptions of the unique strategic approaches are actually assisting the management of Alibaba to maintain its sustainable and competitive position (Ko et al., 2012). For example, Alibaba has become successful in maintaining the leading market position in the Chinese e-commerce industry for the last two years. Amazon.com was leading the market place, but the uniqueness of the strategy adopted by Alibaba has assisted the company to lead the Chinese market quite effectively. Alibaba can be placed in the growth stage of the industry life cycle due to its business characteristics (Solomon, 2014). Moreover, Alibaba is very few among those organizations, which has adopted the combination of three unique strategic approaches. These are C2C or customer to customer, B2C or business to customer and B2B or business to business approach in the particular aspect. Hence, this can be clearly identified that the management of Alibaba has become successful in maintaining good relationship with its major external customers. These are customers and business clients. Alibaba does not only sell the products to the business clients but also it helps the customers involve them in the buying and selling process. Most importantly, the management of Amazon should have followed this particular process in order to improve the sales as well as market share growth rate. Overall, this is also essential for the company management of Amazon to improve its sales growth rate by adopting new strategic approaches. Consideration of this particular strategic approach can assist the company management of Amazon o maintain its leading market position in different market places across the globe. This is also essential to state that the degree of industry output is quite limited for the management of Amazon comparing to Alibaba due to the consideration of the lack of innovative strategic approaches. The organizational management of Amazon should adopt the C2C approach and involve the customers in the buying and selling process in order to reduce the overall business growth. Lastly, the important external and internal stakeholders also will be involved in this particular process.

Value Cain Analysis

The value chain analysis will also be considered as the important business management strategic framework, which can assist the management of Amazon to determine the overall operation management activities of the company. It also assists the companies to ensure some important strategic approaches in the near future. However, the value chain analytical tool is comprised of two important activities, such as primary activities and support activities. Primary activities consist of five important approaches such as inbound logistics, outbound logistics operations, service and operations. In terms of support activities, firm infrastructure, technology development and procurement can be regarded as the important support activities. 

In terms of inbound logistics the company management of Amazon used to focus on the decentralization in the business process to maintain adequate warehousing. In terms of the operations, the company management has adopted decentralization in order to reduce overall supply chain lead time and overall cost. In this particular case, the management of Alibaba has adopted the centralized operation management process (Helms & Nixon, 2010). Centralization has supported the management of Alibaba to take entire control over the strategy establishment and implication process. In addition, the majority of the companies also focus on the decentralization approach in order to reduce the business cost. However, the company management of Alibaba also has provided effective value to the target customers and other important stakeholders in the strategy establishment and business operation process. In terms of the outbound logistics, the company management of Amazon has significantly implicated the advanced information communication technology approach to maintain effective and strong efficiency in the outbound logistic approach to maintain an effective efficiency and flow in the warehousing process. In terms of marketing and sales, the company management of Amazon has adopted the contemporary marketing activities. In terms of the contemporary marketing approaches, the company management has adopted the digital and social media promotional approach. In terms of sales the company management of Amazon has adopted the direct selling approach apart from the online selling and marketing activities. However, the management of Alibaba has focused on the integration of online marketing and selling activities of the products as it is known to Alibaba that the number of the online social media users has increased significantly. In terms of services, the organization used to follow the B2C process or the business to customer process in order to offer the goods the target customers. In this contemporary era, the company has succeeded in the establishment of B2B approach. The company has improved or increased the level of the offering of the goods and services as the firm is trying to deal with the business clients. The major reason behind the adoption of the B2B approach is to gain positive and competitive advantages over the potential industry competitors. In terms of the comparison, Alibaba is very few among those organizations, which has adopted the combination of three unique strategic approaches (Ghazinoory et al., 2011). These are C2C or customer to customer, B2C or business to customer and B2B or business to business approach in the particular aspect. Hence, this can be clearly identified that the management of Alibaba has become successful in maintaining good relationship with its major external customers. These are customers and business clients. Alibaba does not only sell the products to the business clients but also it helps the customers involve them in the buying and selling process. Most importantly, the management of Amazon should have followed this particular process in order to improve the sales as well as market share growth rate. These are considered as the primary activities and these are cleared that the management of Amazon is lacking of effective competitive advantages comparing to Alibaba due to the absence of the C2C approach. Alternative, it can be stated that the unique C2C approach as assisted Alibaba to gain effective competitive advantages over the competitors.

In terms of firm infrastructure, the management of Amazon used to focus on the integration of the collaboration and decentralization among the accounting, general management and other strategic planning units. The organizational management is strongly focused on the establishment of decentralized approach o ensure adequate and conflict free environment to overcome the possibilities of the workplace conflicts and challenges, which may affect the balance of the firm infrastructure. In terms of the human resource management, the human resource management professionals of Alibaba used to consider some important approaches in the strategy establishment process. The organization tries to ensure transparency and ethics in the human resource management activities to get the support of the important stakeholders. In terms of technology development aspects, the management of Amazon utilizes the advanced technological applications in the business management activities to ensure efficient business outcome. In comparison Alibaba used to get high quality business resources, human resources and technological resources in the low cost comparing to Amazon. This is the major reason behind the profitability (Cleveland, 2011). Lastly, the management of Alibaba also gets advantage in procurement activities comparing to Amazon. This is acceptable that the management of Amazon is strongly focused on the quality raw materials, but Alibaba has the expertise to source quality raw materials in the procurement approaches in the competitive price. In addition, Alibaba also has developed a cost effective supply chain network with full of efficiency. This is the major competitive advantage of Alibaba comparing to Amazon.

From the analysis, this is acceptable that the unique C2C approach and the high quality business resources, human resources and technological resources in the low cost comparing to Amazon is assisting the company management of Alibaba to lead the Chinese e-commerce industry quite effectively.

Stakeholder Management Theory

Stakeholder management theory is regarded as an important strategic management theory. These particular theoretical approaches can assist the organizations to develop effective strategies basis on the analysis of ongoing challenges and issues. This is also essential to state that different organizational leaders of Amazon have adopted unique strategic approaches in the business operation management process, but failed to implement the cost effective and customer centric approaches similar to Alibaba. There are two types of stakeholders, such as internal stakeholders and external stakeholders. Customers, government, distributers, shareholders, creditors, suppliers, society and the community members are external stakeholders. On the other hand, employees, owners, managers and board of directors are regarded as the internal stakeholders of the company (Chan et al., 2010). 

Stakeholder Management Theory on Alibaba

Alibaba is very few among those organizations, which has adopted the combination of three unique strategic approaches. These are C2C or customer to customer, B2C or business to customer and B2B or business to business approach in the particular aspect. Hence, this can be clearly identified that the management of Alibaba has become successful in maintaining good relationship with its major external stakeholders, such as suppliers, customers, investors and corporate business clients. Most importantly, Alibaba has provided huge importance to customers and business clients by adopting all the three business management approaches, such as B2B, C2C and B2C approaches. Alibaba does not only sell the products to the business clients but also it helps the customers involve them in the buying and selling process. It is an important consideration for Alibaba to enhance effective competitive advantages. Overall, strong relationship between the external stakeholders, such as suppliers, business clients and customers has helped the organization to gain potential competitive advantages. Alibaba is becoming an emerging player within the global e-commerce industry. This is also acceptable for the company management to ensure that the adoptions of the unique strategic approaches are actually assisting the management of Alibaba to maintain its sustainable and competitive position. For example, Alibaba has become successful in maintaining the leading market position in the Chinese e-commerce industry for the last two years.

In terms of the internal stakeholder management approach, the company management of the company management of Alibaba is lacking in satisfying the needs of the employees, who are considered to be the major and important organizational stakeholders. The company is only focusing on customer centric approaches and the company is failing to manage the stress factor of the employees. It can affect the performance level of employees due to higher working hours, low salary distribution and high stress. Hence, it is clear that the organizational management needs to adopt the quality internal stakeholder management approach for better sustainable practices.

Stakeholder Management Theory on Amazon

The management of Amazon should have followed B2B and B2C process in order to improve the sales as well as market share growth rate. The Amazon Inc actually can take the reference of the Alibaba Company, which is becoming a potential e-commerce company. Now-a-days, this is becoming a potential challenge for the companies like E-Bay and Amazon that the companies are really suffering from the competitive threats of Alibaba. Amazon.com was leading the market place, but the uniqueness of the strategy adopted by Alibaba has assisted the company to lead the Chinese market quite effectively. These strategies have helped Alibaba to improve the perception, values and respect among the major stakeholders of the company. The sales growth rate of Amazon has decreased in China as the company is not focused on the customer engagement approaches as the company only focuses on B2B and B2C approach. Hence, it is acceptable that the company management of Amazon is lacking of effective external stakeholder management approach unlike Alibaba as the company does not focus on the C2C approach.  The product range of Amazon includes different types of departmental goods, retail goods, electronic appliances home appliances, books, electronic gadgets etc. Previously the organization is focused on the offering of the books through online mediums. Now-a-days, the company used to offer different types of products and services (Bull et al., 2016). In terms of the external stakeholder approaches, the company assists in the satisfying the needs of suppliers, government and distributers, but the company does not include customers in the strategy implication process. 

In terms of the internal stakeholder management approach, Amazon has adopted decentralization in order to reduce overall supply chain lead time and overall cost. This particular aspect has assisted the management of Amazon to get effective support from the suppliers, distributers and other important stakeholders of the company. In this particular case, the management of Alibaba has adopted the centralized operation management process. Centralization has supported the management of Alibaba to take entire control over the strategy establishment and implication process. In addition, the majority of the companies also focus on the decentralization approach in order to reduce the business cost. It can easily dictate that the stakeholder support aspect is higher in case of Amazon comparing to Alibaba. However, the company management of Alibaba also has provided effective value to the target customers and other important stakeholders in the strategy establishment and business operation process (Eliott et al., 2014). The company has developed its own supply chain network in several countries. Hence, the suppliers also can be considered as the internal stakeholders of the company. The company has adopted the decentralization approach to improve the employee and effective internal stakeholder engagement approach. Amazon is lacking of effective competitive advantages comparing to Alibaba due to the absence of the C2C approach. Alternatively, it can be stated that the unique C2C approach as assisted Alibaba to gain effective competitive advantages over the competitors. The management of Amazon should have followed this particular process in order to improve the sales as well as market share growth rate. The company management of Amazon has adopted the employee centric approaches for the better workplace environment and performance level. Hence, it is clear that the management professionals of Amazon have strongly focused on the initiation of values and respect for the internal stakeholders. However, the external stakeholders are unhappy with the business process and sustainable approaches of Amazon, which is affecting the profitability and brand value of the company. Amazon needs to give effective value to the external stakeholders, especially the customers; which will assist the company to get support from other organizational stakeholders.

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