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How did Jeff Bezos build Amazon?

In 1995, former investment banker Jeff Bezos had the idea of using the internet to sell books directly to customers online via a website. At the time, there were approximately three million titles in print, (Laudon. 2007) and any bookstore could only stock a fraction of them. Whereas, an online, or “virtual” bookstore could offer a much larger selection of titles. Bezos believed consumers did not need to actually “touch, or feel” a book before buying it. Although there are many psychological triggers that can influence a consumer, Bezos felt that an online synopses, tables of contents, and reviews would be enough to help with selection and purchase. In addition to the broad selection, Amazon was able to charge lower prices than traditional High Street bookstores, as it carried very little of its own inventory, relying instead on distributors, and did not have the expense of maintaining physical storefronts or a large retail sales staff. In 1998, Amazon started selling CDs, videos, and

How does Amazon competes?

The most widely used model for understanding competitive advantage is Michael Porter’s competitive forces model. This model provides a general view of the firm, its competitors, and the firm’s environment. All firms share market space with other competitors who are continuously devising new, more efficient ways to produce by introducing new products and services, and attempting to attract customers by developing their brands and imposing switching costs on their customers. In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industry’s environment: new market entrants, substitute products, customers, and suppliers. Value chain is a tool that charts the path by which products and services are created and eventually sold to customers. The term value chain reflects the fact that, as each step of this path is completed, the product become

How does resource provide competitive advantage?

“The resource-based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes (discussed in the next question), the resource enables the firm to gain and sustain competitive advantage” (Jurevicius, 2013). RBV became popular in the ’80s and ’90s after some authored publishings on the subject. The theory has been redefined and refined through research with evidence supporting its basis. The foundation of philosophy about RBV says companies should be looking to use external factors to achieve competitive advantage. These external factors are referred to as resources and are the major reasons organizations get to a place where they operate on a higher level of performance. The two types of resources are tangible and intangible. As just discussed there are two types of resources within the RBV framework: Tangible - These resources can be seen, touched, and quantified (Dejmal, n.d.). They are physical things like land, buildings, eq

How does information systems provide competitive advantage to organizations?

The Resource-Based View (RBV) is a theory developed by Wernerfelt in 1984 that analyzes and interprets a firm’s internal resources, its capabilities in formulating and implementing unique value-creating strategies through increased knowledge, increased motivation, increased engagement which are not currently or would not be potentially in use by competitors to improve business performance and achieve sustainable competitive advantages (Pankaj, 2010). Some of these resources are the firm’s assets, efficient organizational procedures, processes, attributes, culture, information, or knowledge controlled by the firm, brand names, technological abilities, human resources (Barney, 1991). What makes the firm achieve sustainable advantage is the fact that its resources cannot be easily transferred or purchased, are immobile, require an extended learning curve or a significant change in the organization climate and culture. The resources are costly in terms of developing or using it. Because

Does IT provide any competitive advantage?

In the increasingly competitive business world, many organizations tend to neglect what the value of human capital management can be in building a competitive advantage. To be more competitive, a company must create value for its future customers using new technologies, and other gadgets, and then maintain that value through a dynamic, motivated, competent team, full of innovating ideas. According to Jurevicius (2013), "The resource-based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain competitive advantage". As per Eric D. Brown (2007), "Out of the many theories of organizational behavior, one aligns itself well with the human capital view of people within an organization. " He is explaining that the theory, called the Resource Based View (RBV), suggests that the method in which resources are applied within a firm can create a competitive advant

How to gain resource based competitive advantage?

The Resource based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO (Valuable, Rare, Inimitable, and Organized) attributes, the resource enables the firm to gain and sustain competitive advantage (Jurevicius, 2013). It analyzes and interprets internal resources of the organizations and emphasizes resources and capabilities in formulating strategy to achieve sustainable competitive advantages. Resources may be considered as inputs that enable firms to carry out its activities. Internal resources and capabilities determine strategic choices made by firms while competing in its external business environment (Madhani, 2009). The Resource Based View (RBV) takes an ‘inside-out’ view or firm-specific perspective on why organizations succeed or fail in the market place. According to RBV, firm’s abilities also allow some firms to add value in customer value chain, develop new products or expand in new marketplace. The RBV draws upon the

How to gain advantage out of data?

Since information is processed, interpreted, organized, structured or presented data that gives meaning to facts and figures so as to make them meaningful or useful, the terms information explosion and data explosion are interchangeable when discussed as being rapid increases in the amount of published information or data and the effects of that abundance (Wikipedia, n.d.). This information or unprocessed data has become so plentiful and abundant that the management of it becomes more difficult which leads to an overload. The term was first used in April 1961 in article at a biological conference, then again during the same month in a publication by the New York Times. Since the initial use of the phrase, a lot has transpired since the 1960s later experts making the following predictions (Frew, 2018): a 4300 % increase in annual data production by 2020, 7 billion people and businesses will be connected to the internet by 2020, 30 billion devices will be connected to the internet by 202

How data analytics help companies?

In recent years, we have witnessed the success recorded by corporations who have employed the ideas of bid data and analytics to grow revenues and create an unbeatable competitive advantage to remain market leaders. This is made possible through data and its analyses found in the daily operations of businesses. Data are now inter-connected into every function and segment in the world economy, and a lot is dependent on it, just like other factors important production like human capital without which economic activity will collapse (Maggo, 2014). Over time, this data is becoming massive growing at a super-linear rate, if not exponentially, hence, leading to the data explosion, a remarkable success in database management and database technology. Currently, it’s really not easy finding ways on how to collect, process and analyze all that data, leaving us with the up-task on how to ascertain the right set of tools, architectural decisions, facilities and skills to enable different organizat

How to gain copetitive advantage in the age of data explosion?

Data explosion can be explained as the continuous steady increase in the volume, and the variety of all types of data. With today's invasion of information technology and information systems, the whole world is turning into a digital world. Computers and massive storage devices enable and facilitate keeping vast amounts of data. Humans are putting all their efforts to store all data available for future reference. This is done everyday through everyday use of computers, smart devices and other forms of technology. Organizations and businesses might find it difficult to store such data; however, with cloud computing being introduced, everything is getting possible and accessible at any time with no limited storage capacity. It is a software interpretation of Moore's theory which predicts an exponential increase in the speed of technology as time goes by. i can say technology overgrowth leads to increased human use and as a result "data explosion!" (Marr, B., 2016) Ac

Describe Data Explosion

In the last 20 years, companies have realized that technological advances can enable them to collect information about customer behavior to better understand them, create more targeted offers, and determine more direct business strategies. This quest for information of all kinds on the clients' side has allowed companies to stunt huge amounts of data with more than half that seem to be often useless as James Longworth confirms by saying: "By piling up more and more data, it becomes increasingly difficult to determine what is useful and what isn’t. It also racks up the IT costs for storage and back-up. In fact, research has shown that of all the data many businesses are storing, on average 52% of it is considered “dark”, meaning there’s no real use for it and in effect, it’s a waste of resources."(J. Longworth, 2017) The data we are talking about here are emails, phone calls, information collected during campaigns, and other information related to customer behavior. With

What is data explosion?

Most of the companies think that information is a valuable commodity and its one of the things that deserves storage (the more information we have, the more we can learn, and the changes that drive business success). But, it is important to remember that data collection and storage costs money - data requires storage and electricity to run, and if the information is sensitive, attention must be paid to security and data compatibility (Marr, 2016). Of course, the problem becomes bigger when we consider the expected growth in data companies that will produce; experts expect an annual productivity increase of 4,300% by 2020. But companies use only a fraction of the data they collect and store. Therefore; if companies and individuals want to avoid drowning in data while thirsting for insights, they have to develop a smart data strategy that focuses on the few things they really need (Marr, 2016). Data collection and extraction is a crucial step in big data management. If there is no data i

What is the value proposition of Netflix?

According to Pogue (2014), “Netflix, Inc. is an American media-services provider headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company's primary business is its subscription-based streaming OTT service which offers online streaming of a library of films and television programs, including those produced in-house.” It is obvious to recognize how Netflix has and is still influencing the market of online movie streaming, as state Pogue (2014), “ As of April 2019, Netflix had over 148 million paid subscriptions worldwide, including 60 million in the United States, and over 154 million subscriptions total including free trials.” We can state that their value proposition has been very effective and its very simple ‘See what’s next. Watch Anywhere. Cancel Anytime’ As we can see, Netflix made a simple and a great strategy with this value proposition, because it gives all the customers the freedom that any consume

Why Netflix is a disruptive Innovation?

Founded in August 1997 in Scotts Valley, California, Netflix is a US entertainment company created by Reed Hastings and Marc Randolph, whose mission is to stream media, video-on-demand and DVD-on-demand online . It was during the year 2013 that has made an extension of its portfolio of projects, including the film and television production, as well as the online distribution, so in 2017 it could have its headquarters in Los Gatos, in California. Regarded as one of Netflix's leading competitors and internationally known in the 1990s, David Cook's blockbuster is a company whose main business is the provision of home film and video game rental services through retail stores. rental of videos, DVDs by mail, streaming, video on demand and cinema-theater. According to Akshay et al. (2017), Blockbuster employed 84,300 people worldwide, including approximately 58,500 in the United States and approximately 25,800 in other countries, and had 9,094 stores at its peak in 2004(Akshay et a

How Netflix drove Blockbuster out of business?

Netflix had started the business by the end of the 90s. At the beginning, Netflix had two huge competitors: Wal-Mart and Blockbuster in the DVD rentals, however by 2004 Wal-Mart decided to leave this business since it was not one of its core businesses. Netflix, then, had to deal with the US largest video-rental chain, Blockbuster, for which video rentals was its sole business (Newman, 2010). In the following, a discussion will be carried out in order to emphasize how Netflix succeeded in gaining a sustainable competitive advantage, getting Blockbuster out of the market, and utilizing advanced technology to fortify its market position. Netflix was able to gain a competitive advantage over its chief rival Blockbuster. Discuss the Netflix value proposition and how it successfully gained and advantage over Blockbuster. Netflix’s success was mainly about identifying the weaknesses exist in Blockbuster’s business model. Identifying these weaknesses, along with the futuristic insight toward

Netflix and Disruptive Innovation

Introduction The name Netflix didn’t come out of wishful thinking, it came from an uncomfortable and unsatisfied customer. The CEO of Netflix, Reed Hastings was charged $40 for returning the movie Appolo13 six weeks late (Zarafshar, 2013). This motivated him to start Netflix – a DVD rental-by-mail business with no subscriptions in 2007 with a partner Randolph. In 2009, the company launched the subscription-based DVDs rental by mail with multiple plans depending on the number of titles at a time. Subscribers were provided with extensive DVD library with over 120,000 titles for unlimited monthly DVD rental with free shipping as well as zero late and per title rental fees to choose from (Netflix Case Study, 2016). Customers were allowed to make subscriptions on the spot and subscribers of other competition found Netflix’s offers more appealing and it was easy for them to make the switch (Netflix Case Study, 2016). Netflix also enabled its subscribers to watch movies, TV-episodes, document