Table 4.4 on page 110, assess Amazon’s competitive strengths and weaknesses in c
ID: 364156 • Letter: T
Question
Table 4.4 on page 110, assess Amazon’s competitive strengths and weaknesses in
comparison to two rivals: Walmart and Costco. Follow the instructions below:
A. Use the following key success factors/competitive strength measures that are pertinent to
the discount retail industry.
Customer service
Wide selection
Convenience
Low prices
Distribution
Reputation/image
Market position
B. Assign a weight to each competitive strength measure.
C. Provide a strength rating for each of the following competitors: Amazon, Walmart, and
Costco on each of the competitive strength measures listed in Question 7, part A. Use a
rating scale of 1 to 10 (1 = weak, 5 = average, and 10 = strong).
D. Multiply each rating with the weight of the competitive strength measure to get a
weighted score.
E. Sum the weighted competitive strength scores for each of the following competitors:
Amazon, Walmart, and Costco.
PART 1 Concepts and Techniques for Crafting and Executing Strategy 110 TABLE 4.4 A Representative Weighted Competitive Strength Assessment Competitive Strength Assessment (rating scale:very weak, 10-very strong) Rival 1 ABC Co. Rival 2 Factor/Strength Importance Strength Weighted Strength Weighted Strength Weighted Measure Key Success Rating Rating Score Score Weight Score 0.80 0.50 0.10 0.10 Quality/product performance 0.10 0.80 0.70 0.10 0.10 0.20 10 1.00 0.50 Manufacturing capability 0.05 10 0.50 0.05 3 0.15 Technological skills 0.05 9 0.45 4 0.20 5 0.25 distribution capability 0.05 9 0.45 4 0.20 0.25 New product innovation capability 0.10 0.50 10 1.00 Financial resources 0.30 Relative cost position 0.30 1.50 10 3.00 0.30 Customer service capabilities 5 0.75 0.15 1.05 0.15 Sum of importance weights 1.00 Overall weighted competitive strength rating 5.95 7.70 2.10 For instance, Rival I's 3.00 weighted strength rating on relative cost signals a con- siderable cost advantage over ABC Company (with a 1.50 weighted score on relative cost) and an even bigger cost advantage over Rival 2 (with a weighted score of 0.30). he measure-by-measure ratings reveal the competitive areas in which a company is strongest and weakest, and against whom. The overall competitive strength scores indicate how all the different strength measures add up whether the company is at a net overall competitive advantage or h ral The higher a company's overall weighted strengthExplanation / Answer
Answer:- The main problems which are faced by those firms which are having a physical product as in the case of Dell is that these firms require some kind of storage space. infrastructure for logistics and manpower to manage it. One of the main advantages which is there with eBay is that the firm does not have any physical product and the only resource which eBay can think of outsourcing is related to manpower. For eBay , outsourcing the customer support function specially email enquiries can be easily outsourced to other countries. The prime requirement of this outsourcing is that the people must know the language of English which is an international language so many knows about it. Almost 30% of its total email support is outsourced by eBay and it can be increased up to the scale of 50% with the help of Mrs. Daltons three tire plan.
Answer:- There are many critical issues related to the customer service inquires and the most important are social security numbers and credit card numbers, these activities should not be outsourced. There can be some doubt about the security of the communication infrastructure in some of the outsourcing countries along with the reliability of manpower hired in these countries. The investment which is required to ensure the credibility and security will increase the cost of the outsourcing. It will also require to conduct background check on the employees which is again a costly affair.
Answer:- A three party vendor is required in the process indicated by Mrs. Dalton including Build, operate, and transfer who will need to acquire or establish the operating center, staffing and then properly managing it. The main advantage of this model is that the risk associated with the establishment of assets and developing the manpower pool are confided to third party vendor only. While the unproven utilization of this method can be seen as the main demerit of this model. This option can be treated as the hybrid of two options i.e. implementing the outsourcing with the domestic and international vendors and secondly, elimination of middle man buying or creating the staff outsourcing for the eBay business. There are some amount of risks with the first option but it will reduce cost while the second option is best for cost reduction but has greater risks. When it comes to third party vendors in other countries, some level of opportunism can be seen but with the help of contract negotiation, this can be dealt with.
Answer:- They will decide in favor of BOT. In all the three plans , the best risk to reward ratio is related to BOT. This will allow the eBay to have the control over the outsourced assets resulting in cost reduction and have a better quality control . A good amount of research has been conducted by Mrs. Dalton and she will be able to convince the top management with her data.
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