Primary Causes of Problems at Amazon.Com and their Remedies Case Study

Primary Causes of Problems at Amazon.Com and their Remedies - Case Study Example Question 4 If Amazon buys products from other firms and simply ships them to customers, why does it need so many of its own distribution centers Amazon.com needs many distribution centers of its own because doing so enables it to make product deliveries to customers quickly and also helps the company to save on costs. In addition, the distribution centers were already in operation and therefore just had to be used by Amazon.com in the partnership deals with other companies ("Amazon.com"). Question 5 Will other retailers buy or lease the Web software and services from Amazon Can Amazon make enough money from selling these services Other retailers will buy or lease software services from Amazon.com because the company has immense infrastructure. Although Amazon.com has been making losses for many years due to the high initial costs and intensive promotion activities, it can still make enough money from selling the services it deals in. This evidenced by the fact that the company's financial position has improved somehow since the year 2000 (Post & Anderson, 2006). Customers' confidence in the company put it in a position to make profit. Question 6 Write a report to management that describes the primary cause of the problems, a detailed plan to solve them, and show how the plan solves the problems and describe any other benefits it will provide. Running Head: PRIMARY CAUSES OF PROBLEMS AT AMAZON.COM Primary Causes of Problems at Amazon.Com and their Remedies Abstract This report evaluates the problems faced by Amazon.com since its inception in 1994 and its current status. A detailed plan to solve the problems is given together with an account of how the... In the year 2000, Amazon.com on overhauled its entire system in order to give it a more customer-appealing look.The company spent $200 million on new systems such as software from Epiphany, logistics from Manugistics Company and a new database management system (DBMS) from Oracle. Furthermore, the company signed more contracts with companies such as SAS for data withdrawal and appraisal. All these services of course came with additional costs to the company. In spite of the additional costs, the biggest and perhaps most expensive deal was between Amazon.com and Excelon as a form of business-to business (B2B) integration. In the same year, Amazon.com linked with HP in a deal that would see the company offer information technology services to Amazon’s customers. Despite, Amazon’s desire to expand and dominate the online market, the company was criticized over its activities in 2000. For instance, that year the company conducted a price experiment by quoting different prices on DVDs to different customers. However, customers who logged in to Amazon.com web site at different times discovered that different prices were being offered at different times. Although Amazon.com later confirmed that it was offering random discounts of between 20 to 40 per cent, this never augured well with some of its customers. Among the customers’ sentiments were that they were being charged more when they shopped more and that the exercise was awfully sneaky and unscrupulous. Other customers referred to Amazon.com as a shyster.