Amazon.com is a multinational ecommerce company

Amazon.com is a multinational Ecommerce company, which was founded by Jeff Bezos who is considered to be one of the world’s top innovative executives. Amazon.com started as an online bookstore and expanded with time to sell almost everything. The role of information system in this company is a leading role, because the company is an online retailer. The company started as an online store for books to rapidly expand to sell everything such us beauty items, auto parts, apparel, electronics and groceries.

Amazon has started as an online book retailer and later on has grown to sell products such as VHS, DVD, Computer software, furniture, food, music CDs and toys. The company has also been able to launch websites in different countries such as United Kingdom, Canada, France, Japan and Germany. By 2001 the market place of Amazon has been launched to enable Amazon’s customers to sell used books, DVD’s and CD’s

Amazon’s logo shows an arrow that stretches from A to Z, which also forms a smile to indicate Amazon’s care for customers’ satisfaction.

eBay on the other hand is one of Amazon’s rival online companies. Amazon.com has been an innovative company in its domain; therefore it attracted lots of competition from different companies. eBay as an example is a very strong competitor. It is the number one online auction website. It recruited more than 15000 employees. Just like Amazon, eBay provides customers with comprehensive web services such as:

Search via keyword or phrase.

Submit new items.

Re-list items.

Provides information about certain seller or bidder.

eBay is considered to be the largest online trading company in the world. It was founded in 1995 to become one of the most popular online shopping sites in the world. It has over 100 million registered users internationally. It allows buyers and sellers from the around the word to facilitate sales of services and products and form a diverse international community.

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In order for users to be able to transfer money to sellers, eBay started up Pay Pal, which became the world’s largest online bank. Until 2005, eBay has enjoyed a decade of online auction monopoly. Right now it is challenged by google and it is no longer the world’s only online auction community.

Information system:

Amazon uses an information system (MIS) that focuses on the customer supplier relationship. It focuses on increasing intimacy between customers and suppliers. Amazon uses a sophisticated Information system and sophisticated techniques that allow Amazon to standardize the processes it uses in order to give customers high satisfying experiences. The website opens up with a search bar where customers can type down their desired item and then be able to sift through the data base where the item and similar items can be found. The customer once finding the desired item can give the option of ordering the item and buy it through credit card or gift vouchers that can be purchased through cashu. Once the item is shipped, the customer can receive it within few days up to few weeks depending on the destination required. Unlike its competitors, amazon.com does not ship items through warehouses owned by the company. Books for example are shipped directly from publishers; therefore, warehouses are not needed. These systems are managed by different technological applicants in order to help Amazon’s employees work with efficiency. Once a customer places an order, the management system would start working on reserving the item, schedule the shipment, make invoices and update the customer’s account and record. Amazon uses TPS (Transaction Processing Systems) in the process of the transaction done, as in once picking up the number of items needed the website calculates the total amount. It can also be seen in the preparation of invoices. DSS (Decision Support System) in Amazon can be seen in how Amazon presents its customers with the chance to choose items from a best selling list added to the home page. It is also implemented in a service provided by the website called “Look inside the book”. Customers are left with the choice to make a decision in buying a specific book or not by taking a look at random pages of the content of the book. It can also be seen in the type of shipment that is considered appropriate for the customer. ESS (Executive support system) is seen in the executives handling of queries and answering questions of customers. Amazon uses its own customized database called Amazon S3 (Amazon Simple Storage Service). It is predicted that with time, this system will take the place of Oracle databases because it is simple and less expensive.

On the other hand, eBay uses Business 2 Business (B2B) information system. eBay works through a person 2 person process. Customers can search for items via eBay and then directly contact the seller by negotiating the price with other buyers. B2B can be seen through the way processes are made. Customers are in direct contact with buyers and the transaction and money transfer occurs through PayPal, which is an individual website by itself-though it is fully owned by eBay-. eBay has a massive oracle database that includes over 200 million registered users, two petabytes of data,

ECRM:

Amazon takes the privacy of its customers very seriously. It is true that it keeps a profile about its customers according to what they buy and what items they are interested in, but it does not sell information about its customers to other companies. It also verifies the price of the item ordered to ensure items are not mispriced. This is done to ensure the satisfaction of the customers.

Amazon manages knowledge through allowing customers to be able to see pages of the books desired for purchase. On the other hand, customers cannot review a whole book nor can they print the pages. Customers are only allowed to review pictures of the reviewed pages and not the actual page. This method has been used by Amazon to prevent violation of copyrights as well as manage knowledge.

E-CRM (E-Customer Relationship Management) can be easily seen on Amazon.com’s webpage. Amazon uses E-CRM by suggesting items to the customers based on previous purchases. As an example, previously I have bought the Kindle reading device through Amazon.com. This picture shows recommended items other customers with similar purchases have bought. The second part also shows books that I might be interested in. Amazon.com. 2010. Today’s Recommendations For You. [ONLINE] Available at: https://www.amazon.com/gp/yourstore?ie=UTF8&ref_=pd_irl_gw&signIn=1. [Accessed 05 May 10].

Amazon has also provided its customers with special features. They are:

• Products and pricing information retrieval.
• Customer reviews.
• Wish lists retrieval.
• Performing simple and advanced searches.
• Updating Shopping carts.

eBay’s reputation of being the biggest online auction house in the world has attracted hackers and fraudsters who find it easier to access illegal information about customers and their accounts. This led criminals to sell fraud and sell knock-off and fake items. eBay works hard on detecting fraud activities on its website and considers this as its core activity of its business in order to provide its customers with safety and security. eBay uses whois domain in order to provide its customers with the highest security system. wikipedia. 2010. WHOIS. [ONLINE] Available at: http://en.wikipedia.org/wiki/Whois. [Accessed 23 May 10]

eBay uses whois to fight scam and phishing issues because of an epidemic scam that occurred few years back. The scammers used phishing emails that seemed to come from a trustworthy companies asking for customers’ financial information. With whois system, eBay was able to detect thousands of phishing attacks (1125 in 2005).

Management challenges:

Amazon has a competitive edge that shows its concern with its customers. This can be seen through making the shopping experience fun and easy for Amazon’s customers. Most of the online shopping standards were innovated by Amazon. One of the most obvious examples is the 1 click system, which allows returning customers to shop using one click instead of being forced to re-enter their information and payment method.

Amazon.com has thought of a very intelligent idea to increase sales on the website. This has been done through inventing Kindle. Customers can purchase books for their kindle only through the website, and this can increase the sales of books sold on Amazon.com.

eBay has a famous issue with “glitches” on its website. Many customers have been complaining about this issue for years. In 2009, the website had a whole day glitch and sellers suffered from losses. What these glitches do is that they disable search for items for a period of time. At some point, a glitch was responsible to delete an 11 years old account of a reliable user. Dan Goodin. 2007. The Register. [online] Available at: http://www.theregister.co.uk/2007/11/12ebay_glitches/. [Accessed May 25th 10]

Online/offline communication:

It seems that Amazon.com takes it customers’ needs and satisfaction very seriously. Amazon controls all operations between customers and vendors. Customers order the required products through Amazon, while Amazon contacts the specific vendor for the product, the customer does not have a direct connection with the vendor. This type of communication is an online communication, because the customer’s whole transaction occurs through Amazon.com. Customers are not transferred to the vendor’s homepage. The transaction does not occur through the vendor’s homepage as well. The whole process is done fully via Amazon.com, even the final payments and delivery systems. Even though shipments are done through vendors, Amazon.com has given instructions that all packaging happens in a specific way. Hence, the Amazon.com packages and boxes. Shipments can also be tracked through Amazon instead of communicating with the vendor directly. This proves that Amazon.com uses in online communication service with its customers, because it controls all the transaction starting from giving the customer choices for a product and ending with the product’s delivery, exchange and refunding.

eBay works as a broker between sellers and buyers. Buyers and bidders can place their orders via eBay. Sellers ship items to the highest bidder, which means that eBay does not control the process of shipment or money transaction. Money is transferred directly to the seller through PayPal. This means that eBay is not involved in the process, because sellers control the process starting from deciding the price of the product and ending with the shipping of the product.

Knowledge Management:

There are two types of knowledge management, the usual knowledge management and Customers’ knowledge management. Amazon uses Customers’ knowledge management, because it is more efficient and innovative. Managers in Amazon.com are aware of the fact that customers are more knowledgeable than the company can realize. Knowledge is a key to competitiveness. Knowledge is managed through Amazon by motivating customers to share their knowledge by providing products reviews, customers order histories, suggestions based on customer’s prior orders. Amazon allows knowledge to be exchanged through its customers rather than keeping it within the company. The knowledge does not get lost this way because the more customers the company has, the more knowledge it gains.

eBay manages knowledge through providing managers with the playbook concept and providing eBay customers with Whois. Playbook concept is about knowing the steps needed for success. It allows managers to take the necessary steps that would allow eBay to grow as fast as the managers want. Playbook works in setting the suitable conditions of electronic trading in order to allow certain areas to flourish and grow. Playbook consists of hundreds of web pages that include information that are considered to be a collective of wisdom for all eBay managers worldwide. It consists of updated topics about online marketing and management categories.

eBay has also provided its customers with free available Whois data base so they can check the legitimacy of websites that are forwarded to them that may be part of a phishing scam. This database provides them with information about websites, if the information is incorrect, then it means that this website is part of a phishing scam. This comes under both eCRM and knowledge management, because it is a service presented to the customers that allow them to identify scammers while at the same time it provides them with the knowledge about which website is secure and which website is a fraud.

References:

Junnarkar, Sandeep, (2010) eBay taps business-to-business boom, [Online] Available: http://news.cnet.com/2100-1017-238000.html [March 15th 2010]

Keith Regan. 2003. ecommerce times. [ONLINE] Available at: http://www.technewsworld.com/story/20603.html?wlc=1275082118. [Accessed 29 January 03]

Schoenfeld, E, 2005. The World According to Ebay. Enterprise Information System, [online]. 13, 2-4. Available at: http://money.cnn.com/magazines/business2/business2_archive/2005/01/01/8250238/index.htm [accessed 17th May 2010]

wikipedia. 2010. WHOIS. [ONLINE] Available at: http://en.wikipedia.org/wiki/Whois. [Accessed 23 May 10]

Dan Goodin. 2007. The Register. [online] Available at: http://www.theregister.co.uk/2007/11/12ebay_glitches/. [Accessed May 25th 10]

Gosnell, Denise. (2005) Professional Web APIs: Google®, eBay®, Amazon.com®, MapPoint®, FedEx®, Indianapolis, Indiana:Wiley publication, inc.

Shanahan, Francis. (2007) Amazon.com® Mashups, Indianapolis, Indiana: Wiley Publication, inc.