Assignment GSCM 3
Group 7
0053006
0 053011
Q1: why is Amazon building more warehouses as it grows?
How many warehouses should it have and where should
they be located?
1. Amazon has continued to expand the set of products that is sells
online. Besides the books and music, Amazon has added many
product categories such as toys, apparel electronics, jewelry, and
shoes. As a result, Amazon need more warehouses.
2. Location: Amazon has heavily promoted its Prime service, which
provides customers two-day shipping for $79 a year. As a result, the
warehouses should be located with the transportation advantage.
Numbers: it should expand in the new markets, developing countries
and the high sales market. However, in the current market, Amazon
should develop better supply chain system and develop better
relationship with suppliers (publishers) to deliver products to customers
directly. Hence, this would help Amazon reduce inventory level and
inventory cost.
Q2.1 What advantages does selling books via the Internet
provide over a traditional bookstore?
Cost reduction for example, rental for a physical bookstore,
utility expenses, labor cost and so on.
The business is borderless customers from all over the world
can purchase the product anytime without worrying about the
customs because Amazon will deliver the product to you wherever
you are.
Less time consuming this is a win-win situation for both the
Amazon and customers. For example, Amazon just needs to
update all the product categories online and it is less time
consuming. While customers only need to spend some time
visiting Amazon.com and go through all the products by using a
computer and if they need to buy any product just press the button.
Cheaper books Amazon offers cheaper books compare to the
Q2.2 Are there any disadvantages to selling via the
Internet?
Cant get the book on the spot - customers will need to wait for
the book to be delivered.
Not a physical product all the books displayed online cant be
touch, some customers may want to touch and check the book
before they want to buy it.
Not convenience for old generation - Online bookstore is only
available for those who has computer but for old generation that
dont know how to use computer may feel not convenience.
Q3. Should Amazon stock every book it sales?
Amazon put preview of all books on its website
do not need to prepare stocks as samples.
Amazon has good relation with publishers, which means publishers
can accept Amazon order books after it receives customers order
(pull process), especially for books those are rank outsiders.
Amazon has a complete logistic system that can let it send both books
from warehouses and publishers to customers fast and cheap
Unless the books are very popular, It is not necessary for Amazon
to stock every book it sales.
Q4.1 What advantage can brick-and-mortar players derive
from setting up an online channel?
Provide information to its customers (e.g., access to product
brochures and price lists)
As a marketing tool (e.g., allowing a customer to contact
bookstore in different area)
As a sales channel (e.g., on-line ordering of products)
As a service support line (e.g., frequently asked questions and
answers).
Q4.2 How should they use the two channels to gain
maximum advantage?
Identify
need
Find source
Arrange
terms
Purchase
Use
Product
promotion
Information
deliver
Time to
market
New sales
channel
Customer
relationship
s
Rich
information
Online contact with
customer
Quick deliver
information to
customers
Instant
inventory
check /record
24/7 Online
purchase
Customer
feedback
Poster and
in store
recommend
ation
phone,
postage, and
printing costs
can be
reduced
online shop will
force
companies to
quickly adapt
new
processes
-Recommend
additional
purchase
-Store area
distribution
Refine
customer
services
Buying
process
Brick
&
mortar
Q5. Should traditional booksellers like Barnes and
Noble integrate e-commerce into their current supply
chain or manage it as a separate supply chain?
Upstream
Downstream
As the figure shows:
Upstream supply chain should be integrated , since it doesn't
have to do any change to support its new e-commerce.
However downstream supply chain cannot be integrated ,
because of the different frequency of order processing between
physical bookstores and individual online customers.
Q6.1 For what products does the e-commerce channel
offer the greatest advantage?
Downloadable products get the most benefits from e-commerce
channel for both customers and suppliers.
(Downloadable products: Music, Movies, Software, E-books, and
other
Digital contents)
Advantages for customers: Customers can get the products anytime
or anywhere they want to buy, and they enjoy the products
immediately.
Advantages for suppliers: They can save the inventory and
warehouse cost for not stocking the physical packages. They save the
rents and decoration fee of stores, but using websites to provide
various products and promotions. They save the transportation fees,
because the products are delivered via internet spontaneously.
Q6.2 What characterizes these products?
The products should be downloadable, which means most of them are
digital contents.
Some physical products that have low-demand and are not easy to be
found in common retail stores.