Compare And Contrast Two Successful Global Companies Commerce Essay

equalize And Contrast Two Successful Global Companies Commerce EssayIn this paper we shall evaluate, compare and contrast two favored world(a) companies UPS and Amazon.com. UPS is the worlds largest software system deli real companionship and a leading global provider of vary transportation and logistics services (UPS, n.d.). It continues to diversify in its product offering. UPS is the third largest employer in the US and has been operating for the last 103 days. On the other hand, Amazon.com is atomic number 53 of the successful survivors of the internet boom in the late 90s. By 2008 Amazon had p subaltern a global brand with other 76 million active agent customers accounts and had earned itself the reputation of offering earths biggest selection of books.Being a conjunction that was founded in 1995, it is not surprising that Amazon.com is still led by its prestidigitator founder Jeffrey Bezos. Amazon.com has a small counselling core that co-ordinates a realistic/bou ndary less memorial tabletal structure that has been necessitated by the nature of its backing. UPS on the other hand is run by a highly centralized management committee that is mostly organized into functions. At the global level we catch out business units. Both organizations though are structurally organized to erect efficiency along their supply chains. According to Lambert and Cooper (2000) matchless of the most significant paradigm shifts of modern business management is that idiosyncratic businesses no longer compete as solely autonomous entities, besides rather as supply chains (p.65).Further, in this emerging matched environment, the ultimate success of the single business will depend on managements ability to integrate the companys intricate network of business relationships (Lambert Cooper, 2000). The two companies disaccord here in that whereas UPS owns most of its supply chain operations as epitomized by its 400,000 employees, 600 plus airplanes, more than 90, 000 delivery trucks and 72,000 retail outlets Amazon.com manages its supply chain through a network of partnerships with companies such as Toys R Us and Borders in the US, and Waterstones in the UK etc.Indeed, as new technologies provide opportunities to radically change business and industry economics, the need to frame strategy and its slayinghas become increasingly importantfor executives and entrepreneurs who are searching for opportunities to create and campaign game-changing innovations (orchard apple treegate, 2008, p.21).Information Technology (IT) has been central to both organizations though manifested differently in their strategies. For UPS, IT has been the potential change factor for the last decade. By building up their IT network and database capacity through such innovations as eLogistics and UPS OnLine Tools the company was adapted to redefine its core business through what Varian (2003) refers to as new combinations of rich means.The case for Amazon.com is diff erent because it is an e-business where IT is a fundamental component. Nevertheless, Amazon.com has been able to develop proprietary technologies with the functionality and features that simplify and improve there customer shopping experience. It is this that made the organisation to prosper while other dot-coms failed. Amazon.com has been able to achieve awareness, customer commitment and repeat purchases, a form of customer lock-in According to Varian (2003) this tact by Amazon.com skips dispersion of willingness to commit, which is a form of price discrimination and increases barriers to ingress.When we look at the effect of ostiarys five forces to these two companies we are enabled to understand their strategic intents better. In the case of UPS we see a highly agonistical industry with good brands to compete against such as FedEx, DHL and US Postal Service. The few powerful brand names, high fixed cost, trade tariffs and international regulations make entry into this in dustry difficult thus reducing threat of new entrants. emptor power is moderate in spite of the low switching costs for customers because individually they are too small to have an impact. Threat of substitutes is low considering that few competitors can match UPSs airfreight. The biggest threat for UPS comes in the form of intemperate supplier power. This is manifested through labor problems, fuel costs and capacity constraints for physical exertion UPS reported a fourth-quarter 2007 net loss of $2.58 billion mainly repayable to a $6.1 billion pension-related charge.For Amazon.com industry rivalry is in like manner high in particular with such competitors care eBay, Barnes Noble and Wal-Mart, high threat of substitutes from specialist e-commerce sites e.g. Apple iTunes store for music downloads and low power of suppliers such as publishers who husking competition with online companies so expensive and challenging that they prefer entering into partnerships. though the capi tal expenditure required to enter into e-commerce is low Amazon.com has been able to reduce threat of new entrants through demand side benefits of scale, development of proprietary technologies, brand identity and effective and efficient distribution channels. According to Porter (2008)Demand side benefits of scale arise in industries where a buyers willingness to pay a companys product increases with the number of other buyers who also patronize the company (p.4)The future performance projections for UPS for at least the next five years should be high considering that the company has been able to successfully transform itself from one oriented towards becoming the leading package delivery company into an enablers of global e-commerce. In spite of this the company has also successfully maintained its steady culture that has made it have a low rate of employee upset throughout its history. The firms commitment to continual development of game changing business models e.g. leasing i ts call center capacity to a customers, supporting and managing entire back-end systems for corporations like Nike etc, and its quick embracing of new technologies are bound to keep UPS very competitive for the near future.Amazon.com though is in a less sure industry where disruptive technologies have the ability to change the entire industry overnight. Moreover, e-commerce aspiring entrants armed with new capacity and hungry for market care could easily ratchet up the investment required for Amazon.com to stay in business (Porter, 2008) which is not the case for UPSs industry. Customers in this industry are also more fickle as their online experience evolves and could easily be emaciated to substitute offerings. Nevertheless, we cannot take away Amazon.coms relentlessly focus on customer experience and customer loyalty which enabled them survive the dot-com bubble burst. With the chimerical founder till at the helm we should expect Amazon.com to maintain its competitive edge.