Ordering gifts online is getting more popular every year; it is certainly convenient, however, except for the disappointment of recieving the actual present after the special day. After years of dealing with refunds and customer complaints, Amazon is finally taking a new approach to improve on what is described as the “cardinal sin of online retailing” by Stone in his Business Week article.

Previously, Amazon has been heavily reliant on the UPS, its largest partner, to handle a large portion of its packages. This eventually became a serious a problem as demand expands. Recently, Amazon turned to Postal Service to expand on its key partners list. At the same time, U.S. Postal Service is also adjusting their service rates to better compete with its major competitors, UPS and FedEx. In addition to lower prices, USPS also have the competitive advantages in parking as well as providing more services on holidays/week ends. On the other hand, building more fullfillment/sortation centers across North America will also allow Amazon to have more flexiblity in shipment options. In other countries such as China, Amazon is already offering direct shipping with its own channel that typically deliver goods in less than a week.

These two changes made can potentially solve the biggest problem that the company faces: late shipments is not only costing the company money, but also its brand image and buyers’ trust. Fortunately, Amazon’s management was able to identify the source of issue and make correct operational decisions (discussed in Class 6) to fix the problem. It is vital for online sellers like Amazon to strengthen its customer relationship, and that brand promise can only be established by more efficient services, thus they can use their value proposition to their best advantage.

Article Links:

Amazon’s Grand Plan to Avoid Holiday Delivery Snafus Again

Amazon Casts Its Vote With the Postal Service

The Postal Service’s Biggest Advantage Over FedEx: Free Parking

Citations:

Leonard, Devin. “Amazon Casts Its Vote With the Postal Service.” Bloomberg Business Week. Bloomberg, 11 Sept. 2014. Web. 28 Sept. 2014.

Stock, Kyle. “The Postal Service’s Biggest Advantage Over FedEx: Free Parking.” Bloomberg Business Week. Bloomberg, 05 Sept. 2014. Web. 28 Sept. 2014.

Stone, Brad. “Amazon’s Grand Plan to Avoid Holiday Delivery Snafus Again.” Bloomberg Business Week. Bloomberg, 26 Sept. 2014. Web. 28 Sept. 2014.

Image: http://goodereader.com/blog/uploads/images/amazon-may-start-charging-sales-tax__oPt.jpg

An August 2014 report by Kantar revealed that Target has adjusted its pricing strategy to offer the same goods for almost 4% lower than what Wal-Mart charge. I still remember when Target first entered Canada, a majority of customers (including my own family) complained about its high prices. In spite of its new pricing strategy, Target Canada still can’t completely erase its impression for selling household items at a higher price than its U.S. stores. However, what was more shocking to me was that Wal-Mart is losing its price competition against Target.  With its efficiency, short inventory period and policy of cutting down the manufacturers’ profit to a bare minimum, Wal-Mart is known for having a competitive advantage in its network and channels.

In Class 6, we learned about the importance of operation decisions and how that is linked to the accounting aspects of the firm. From looking at the example of big retailers, we can see that an efficient distribution channel with quick inventory turnovers can ensure a company’s steady cash flow as well as reduce its costs and depreciation for goods sitting idle. Ultimately, the nature of retail industry forces the retailers to compete in pricing, on top of convenience and efficiency for customers. Although Target may be behind, it is still the correct decision because price and convenience is what keeps retail stores survive in this age with more and more direct sellers.

Article link:

http://www.theglobeandmail.com/report-on-business/target-canada-winning-price-battle-with-wal-mart/article20730395/

Strauss, Marina. “Target Canada Winning Price Battle with Wal-Mart.” The Globe and Mail. Theglobeandmail.com, 22 Sept. 2014. Web. 22 Sept. 2014.

Cool new features of the iPhone 6? Wait, first of all, where’s the classic looks? In terms of both size and design, the new model is almost an exact copy of its rival brand, Samsung. The so-called “new” payment feature is actually a fairly old technology that already exist/is widely used in Asian countries for several years. The concept of a “phablet” is neither new nor original, just look at with the dozens of smart phones on the market. As a result, Apple’s stock prices actually fell by almost 40 cents on the same day it launched the iPhone 6. With its lack of innovation and creativity in design, it wasn’t surprizing to see the industry’s responses and disappointment among speculators.

In spite of all the negative comments, many Apple fans still pre-ordered/lined up outside the stores for hours before the launch; in fact, the new iPhone already sold out on the day it went on sale. This is a very interesting phenomenon, and we can certainly see this as an example of how successful branding can save a company from losing its customers. Even though the product itself does not meet up to the public’s expectation, the company will continue to make profit by focusing on its brand and marketing strategies. This explains why it will be difficult for smaller companies to compete with corporations like Apple, even with far more powerful/innovative/high-tech products.

Article Link:

http://www.forbes.com/sites/rebeccafannin/2014/09/13/launch-of-apples-iphone-payments-fails-to-dazzle-chinas-more-advanced-mobile-market/