Best-Practice Companies in Electronic Commerce

Best Practice Companies

By: Craig W. Roggow

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Abstract

This article is written as an assignment in E-Commerce Models and Its Applications, MKT 640, Case Analysis, Week-6, Option 1—Web Research;from the course study guide (identified on pg 197) and text book, E-Commerce, Business, Technology, Society, 8/E (Laudon & Traver, 2012).  In this report, I conduct a thorough internet search to identifying two companies noted for their best practices in e-commerce, then analyze those two companies, addressing (5) specific discussion questions. In this review it is the thesis of this article that Yahoo and Amazon.com are two examples of best practice companies in electronic commerce. We identify Amazon.com as the world’s leading company in the electronic commerce sector. Whereas, Yahoo offers a wide variety of electronic services such as emails, news alerts, financial outlooks and search engines among others. In addition to emails, Yahoo also provides chat tools for users. These tools serve as platforms for instant messaging. Currently, Yahoo users can also communicate using videoconferencing. Furthermore we learn that the difference between these firms is also evident through revenue generation.

Keywords: best-practice companies in electronic commerce, e-commerce, amazon.com, yahoo, content delivery, instant messaging, innovative strategies

Introduction

Best-Practice Companies in Electronic Commerce

Thesis

Yahoo and Amazon.com are two examples of best practice companies in electronic commerce.

Purpose of post

This case examines two companies that have had exemplary practices in electronic commerce (e-commerce). These companies are Yahoo and Amazon.com. Although both companies specialize in different products and services, they are trendsetters in terms of electronic commerce. Yahoo offers a wide variety of electronic services such as emails, news alerts, financial outlooks and search engines among others. In contrast, Amazon.com offers online retail services as well as consumer electronics. Although these companies offer different electronic services, they are comparable from numerous angles. This post will highlight these similarities, encompass a critique of the best practices within these firms, and also provides an implementation framework for best practice evaluation.

Overview of post

Amazon.com is the world’s leading company in the electronic commerce sector. With its headquarters in Seattle, this firm had more than $48 billion worth of revenues in 2011. Since its establishment in 1994, this firm has become a global powerhouse in electronic commerce. Its services are available in almost all countries in the world (Kalpanik & Traphagen, 2011). Leadership and strategic management have been crucial in enhancing the performance of the company. Extensive investments have also played a crucial role in enhancing the company’s performance. With its headquarters in Sunnyvale, Yahoo is another global giant in electronic commerce. Since its establishment in 1995, it has become a leading provider of internet services like emails and search engines (Hill & Jones, 2009). During the 2011 financial period, the company had close to $5 billion in revenues. Content delivery and communications have been essential in enhancing the performance of Yahoo as a powerhouse in electronic commerce. Marketing has also been an instrumental factor behind Yahoo’s success.

Objectives of the post

    • Identify and explain what these best-practice companies do in the field of e-commerce.
    • Define the similarities between Yahoo and Amazon.com.
    • Describe major differences between Yahoo and Amazon.com.
    • Critique Yahoo and Amazon.com best practices.
    • How to implement best practices.

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Discussion

Question 1 (identifying two best-practice firms in electronic commerce):

Yahoo is a company whose popularity stems from email services. In recent decades, communication has virtually been re-invented by technological advancements. Through the platforms from Yahoo, internet users can communicate with other users effectively. In addition to emails, Yahoo also provides chat tools for users. These tools serve as platforms for instant messaging. Currently, Yahoo users can also communicate using videoconferencing. News and financial updates are also notable features of Yahoo as a firm in electronic commerce. On the company’s website, users can access recent data from leading bourses like NYSE and the London Stock Exchange among others (Souders, 2009).

Consequently, the company provides useful information for investors and shareholders in different companies. On its part, Amazon.com is recognizable on the global front as the premier firm in electronic commerce. This firm specializes in online retail services and boasts of a global client base. Even in the wake of competition from other online retailers like eBay, Amazon.com is by far a market leader in electronic commerce. In addition to digital content, Amazon.com also offers consumer electronics. Diversification is a key pillar for the performance of Amazon.com. There are various perspectives that would help in justifying the relevance of Amazon.com and Yahoo in relation to this study. Firstly, both companies have unique systems for electronic commerce (Hill & Jones, 2009). These systems might form effective models for other upcoming companies in electronic commerce. Both firms have exemplary management frameworks for electronic commerce. This is a crucial perspective with regard to this study.

Question 2 (similarities between Yahoo and Amazon.com):

As players in the electronic commerce sector, Amazon.com and Yahoo have numerous similarities. Both firms derive a lot of revenues from advertising. On a daily basis, millions of internet users access both websites. Internet traffic is among the most critical aspects of online advertising. Consequently, companies prefer to place online adverts on such websites. Apart from online advertisements, another similarity between these companies pertains to their innovative strategies (Weber, 2008).

In order to enhance income, these firms employ innovative tactics like the establishment of new products and services. In electronic commerce, innovativeness is an essential factor towards the performance of firms. Content delivery is another platform that would help in demonstrating the similarities between Amazin.com and Yahoo. In essence, both companies have invested heavily towards the enhancement of content delivery on their respective websites. As a result of this strategy, users can easily access content from the websites of Yahoo and Amazon.com. Diversification of products and services is another attribute that would help in demonstrating the similarities between Yahoo and Amazon.com.

In order to remain relevant electronic commerce, companies must develop sufficient strategies for diversity. Such diversity helps in maintain clients as well as attracting others. Additionally, diversity is a vital element for branding in electronic commerce. Both of these firms have exemplary frameworks for diversity. Yahoo offers communication as well as advertising. Similarly, Amazon offers electronic books, online retail services as well as consumer electronics. These perspectives highlight the notable similarities between Amazon.com and Yahoo with regard to electronic commerce (Gosnell, 2005).

Question 3 (differences between Yahoo and Amazon.com):

The principle difference between Yahoo and Amazon.com results from their products and services. Whereas Yahoo specializes in email services, Amazon.com specializes in online retail. In addition to emails, Yahoo offers social networking services such as chats, videoconferencing and instant messaging. Social networking services are not available on Amazon.com. The company’s other products include consumer electronics and content delivery (Hill & Jones, 2009).

The difference between these firms is also evident through revenue generation. During the 2011 fiscal period, Yahoo’s revenues were just below $5 billion. On the other hand, the revenues collected by Amazon.com during the same period were more than $48 billion. This presents the gulf in revenues between the two electronic commerce firms. It is also vital to note that Amazon.com enjoys a greater market share than Yahoo. Whereas Amazon.com has a workforce of more than 65,000, Yahoo’s workforce is slightly above 12,000 employees. These statistics serve as indicators of Amazon.com as a market leader in electronic commerce. Whereas Amazon.com has had stable leadership, Yahoo’s leadership has been so fragile. Since 2005, Yahoo has had more than six chief executive officers. This is different from Amazon.com which has only had one CEO since its establishment (Kalpanik & Traphagen, 2011).

Question 4 (critique of Yahoo and Amazon.com best-practices):

Amazon.com. As a market leader is electronic commerce; numerous perspectives are evident in the company. Firstly, the company’s management team has made significant investments in innovative strategies. Through innovation, the company keeps developing unique products and services that conform to demands. Additionally, the innovative strategies have helped in strengthening the company as a global brand. In electronic commerce, innovation almost comes out as a fundamental requirement. Content delivery is another best practice for electronic commerce from Amazon.com. Users do not encounter difficulties while trying to retrieve information from Amazon.com (Weber, 2008).

The firm integrates exemplary interfaces on its websites in order to boost content delivery. Despite these positive attributes, Amazon.com also has some undesirable aspects of electronic commerce. For instance, the company has violated privacy rights for some authors as it attempts to enhance its business. This does not conform to best practices in electronic commerce. Some of the firm’s marketing strategies have also been more or less controversial. For instance, the company has been involved in illegal spying of rivals’ strategic plan. Some of the company’s advertising applications are also dubious in that it relies on tarnishing the image of competitors. Amazon.com also uses its extensive dominance to offer cheaper products and services as compared to competitors (Gosnell, 2005).

Yahoo.Yahoo has taken advantage of new technology waves by investing in social networking. Although the company is not an exclusive social networking website like Twitter, it generates extensive traffic from social media. This innovation has been instrumental towards enhancing Yahoo’s profitability. Another perspective of electronic commerce from this firm pertains to online advertisements. As a result of heavy online traffic, Yahoo generates millions of revenues from advertisements (Hill & Jones, 2009).

However, the company’s management has been relatively unstable in comparison with competitors. The company’s hierarchy has deployed more than five CEOs in six years. This has not been helpful in enhancing the company’s financial stability. The company’s marketing strategies are not aggressive. This undermines Yahoo’s capacity to maximize on its potential in electronic commerce (Souders, 2009).

Question 5 (implementing best-practices):

The first consideration while implementing best practices pertains to the evaluation of available resources. It is vital to develop an implementation framework that conforms to the available resources. This approach helps in strengthening financial stability in the organization. Apart from resource availability, another consideration pertains to the technology framework. Technology forms the basis of electronic commerce. However, not all technological frameworks might be effective in the organization. Compatibility is thus a critical perspective of consideration with regard to the implementation framework of best practice. It is also vital to assess the implications of different practices. After the assessment, the most effective practices are implemented (Laudon & Traver, 2012). As a manager, it is vital to implement practices that have minimal costs but maximum efficiency. This is also an effective approach towards strategic planning (Hill & Jones, 2009).

Conclusion

Summary of main points

Yahoo and Amazon.com are examples of best practice companies in electronic commerce. Amazon.com is the world’s leading company in the electronic commerce sector. Yahoo offers a wide variety of electronic services such as emails, news alerts, financial outlooks and search engines among others. In addition to emails, Yahoo also provides chat tools for users. These tools serve as platforms for instant messaging. Currently, Yahoo users can also communicate using videoconferencing.

Lessons learned and recommendations

Even in the wake of competition from other online retailers like eBay, Amazon.com is by far a market leader in electronic commerce. Both firms derive a lot of revenues from advertising. On a daily basis, millions of internet users access both websites. Internet traffic is among the most critical aspects of online advertising. Diversification of products and services is another attribute that would help in demonstrating the similarities between Yahoo and Amazon.com. The principle difference between Yahoo and Amazon.com results from their products and services. Whereas Yahoo specializes in email services, Amazon.com specializes in online retail. The difference between these firms is also evident through revenue generation.

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References

  • Gosnell, D. M. (2005).Professional development with web APIs, Hoboken, NJ: John Wiley & Sons.
  • Hill, C. and Jones, G. (2009). Strategic management theory: An integrated approach, Mason, OH: Cengage Learning.
  • Kalpanik, S. and Traphagen, P. (2011). Inside the giant machine: An Amazon.com story, North Charleston, SC: CreateSpace.
  • Laudon, K. C. and Traver, C. G. (2012). E-Commerce, business, technology, society, 8/e,New Jersey: Pearson Education, Inc.
  • Souders, S. (2009). Even faster websites, Sebastopol, CA: O’Reilly Media
  • Weber, S. (2008). Sell on Amazon: A guide to Amazon’s market place, Weber Books.