Essay about Operation Strategy(Dell, Amazon.Com & Ibm)

6169 Words Sep 1st, 2013 25 Pages
NIILM Center for Management Studies 2009-11

Rajesh Kumar Singh
Roll No 29084
Production and Operation Management Assignment

Question: Discuss operations strategies of three companies.
Answer:
Operational Strategy: Amazon.com

Introduction: Amazon.com has become the largest customer friendly online retailer and provides one click purchase facility to its wide range of products including books, music, toys, gifts, electronics etc. For 2011 Amazon’s net sales documented the value of $48077 million to earn net income of $631 million (Annual Report, 2011). Currently, Amazon is serving more than 137 million of its customers with its 56200 employees all over the world. Moreover, International traffic also ranks Amazon at 16th
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This will positively contribute to customer’s loyalty. Moreover, Amazon also made required changes to its fulfillment system when needed especially for huge order fulfillments. For instance Amazon received record advance order of 275000 for single volume of Harry Porter. This challenged information staff at Amazon. During such event Amazon mailed to its customers for confirmation of delivery information. Moreover, before shipment data regarding each package was updated. For Shipment purpose Amazon contracted with FedEx for shipping 250000 orders at released date that scheduled 100 flights to fulfill orders. In this way, Amazon successfully met such huge order fulfillment on released date.
2. Low Cost Strategies: Porter (1980) argued that firms can gain sustainable competitive advantages through adopting differentiation, cost leadership or focus strategies. While on the other hand Loudon & Loudon, (2006) argued that firms can gain cost leadership through online operations as it reduces ordering and inventory cost. Mass customization at Amazon also augmented its profitability through high activity with low variable cost. Fixed cost per unit decreases with the increase in activity as compared to variable cost per unit (Drury, 2006). While in case of Amazon fixed cost of system dominates as compared to nominal variable cost. Cost of technology, many parts of fulfillment

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