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Internet is one of the modern technologies that have revolutionized businesses globally. The internet has led the establishment of more companies in the online market. It brought fourth online marketing. Reasonable number of people relies on online stores, rather than buying products from shopping malls and retail stores. Amazon.com and Borders Group are examples of competitive and large online companies. This paper illustrates the history, business approach, management, and marketing of both Border Book and Amazon by comparing and contrasting the above features.
History of Amazon
Amazon Inc., headquartered in Seattle, Washington, is the world’s largest online trader. Founded in 1994 by Jeff Bezos, it began its online operation in 1995 as an online bookstore, but later varied, selling music, video games, furniture, food, and toys among others. The perfect sales liable to online store led to its establishment by Jeff Bezos (Clay, Ramayya & Wolff, 2002). Having being included in Washington State, the company commenced its business operation selling the first book, named Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought via Amazon.com. The company was reincorporated into Delaware in 1996. Grant, (2005) points out that, it first traded in the stock market, Initial Public Offering in May 1997 under NASDAQ stock exchange. It experienced a slow growth that disappointed shareholders, since the company was not making the expected profit. Many online firms performed poorly, while Amazon persevered and managed to make its first profit in the late 2001. This proved that the online business was profitable and worth venturing. By 1999, the company had gathered enough awareness, leading to acknowledgment of Jeff Bezos as the person of the year.
History of Border Books
Border Group Inc. had its headquarters in Ann Arbor, Michigan. Tom and Louis Borders, undergraduate students of the University of Michigan, established it in 1971. They had a customized book inventory system for every store’s portion to its community. Border Books began with used books, situated in two-roomed building. Later it moved to small ground floor in the Maynard apartment. Kmart acquired Borders ownership 1992 and merged it with his Waldenbooks (Mc Guigan, Moyer & Harris, 2010). The reason behind this merger was to save the already Waldenbooks from collapsing with the aid of Borders senior management. Other rivals such as Barnes & Noble and Crown Books were surfacing, posing competition to Kmart and his company. Previously, the company was named Borders-Walden Group but changed to Borders group.
According to Mc Guigan, Moyer & Harris (2010), Singapore had the first largest store, associated to Border books in Wheelock place. The company registered a market growth by establishing 41 extra branches in the UK and New Zealand among other countries. In 1998, the UK branch was promoted as a Borders Group supplementary. The UK branch was closed down for some time due to stiff competition from other firms that were also emerging in the online trade. In 2009, the Border (UK) Ltd. was subjected to administration similar chapter 11 bankruptcy in the US (Grant, 2005). Subsequently, other branches of Border bookstores ceased business. Border UK later alternated to liquidation referred to as chapter 7 in the United States. All stores were terminating business by the end of the year.
Marketing approaches to internet marketing and sales
Amazon and Border group had their marketing approaches that were different towards the competitive online marketing. Amazon approached the internet marketing by concentrating business growth and through expansion to increase their economies of scale. Amazon Company provided its clients with an outstanding online shopping experience. Other marketing approaches, employed by Amazon, entailed relatively lower prices to attract clients, and a varied range of products to choose from and convenience (Shepard, 2006). Additionally, it offered free shipping on purchases above 25 dollars. This attracted more clients and put them at the forefront of the competition. A wider variety of consumer goods enabled customers to compare products prices; therefore, coming up with the best choice. The site offers a faster search to products since online clients tend to get impatient fast. The key problem that faced Border Books was the slower search and its marketing approaches were way below Amazon’s approach. It emphasized more on becoming global by opening branches globally without efficient marketing approaches, which later collapsed (Shepard, 2006). Border group offered products at relatively higher prices and covered no shipping costs.
Amazon had incurred losses from the commenced of its online business up to 2001, when it registered profits. The noteworthy success of Amazon is attributed to diverse factors. Amazon had designed their e-commerce website to enable online buyers to evaluate its products; hence, buyers had a motive to check on Amazon during the buying process. The content strategy enabled it to achieve search engine traffic due to the best website content.
Clay, Ramayya & Wolff (2002) affirm that, affiliate market strategy contributed to the success of Amazon. Amazon associated its business with various businesses both online stores and physical stores. The company paid publishers affiliated commissions upon recommending clients to purchase from Amazon.com. The company’s move was a way of advertising. In the present hyperactive competitive online market, pricing is a key factor that should be noted by firms. Amazon may not offer the lowest prices to its clients but provides a surety that clients have not been ripped off. Consumers have a tendency of comparing prices from competitor upon realization that those prices are not fair on some products (Shepard, 2006). Charging more than the competitors results in less or no clients at all and a business without customers is failing business. The relatively cheaper and fair prices attracted new clients and maintained the current ones, leading to Amazon’s success.
Reasons for Border Books failure
Border Books ceased its business operation after a decade of commercial activities, despite being established earlier than Amazon Company. It expected to have a larger market share and register high market growth due to the accumulated profits. The closure of Border Books had several factors, linked to it.
Overinvestment in music contributed to the downfall of Border Books (Shepard, 2006). The company had devoted many resources to meet the high music demand, which was highly significant at that time. It was recognized as the best music store in the United States from the design of their stores. Overinvestment consumed much of Border Books capital, which was hard to recover from upon the decline. The decline in the music business led to a drastic fall in sales in other products since music attracted most of its clients.
Emphasis on products, instead of concentrating on effective business operations, led to the downfall of Border Books. Border Books provided various products, though music business dominated much of their commercial activities. The wide range of goods was profitable before Amazon’s establishment. The emergence of Amazon and other competitor, facilitated by the internet era, terminated the Border Books’ monopoly; hence, it requires efficient business strategies to influence its operation. Most of its clients moved to other online stores, leading to immense losses, which were unbearable to the company (Mc Guigan, Moyer & Harris, 2010). The changing market condition was so disadvantageous that it failed to adapt. Other firms such as Barnes & Noble devoted their resources in the process and systems. They tried to implement some systems in the early 2000s, but proved futile. Investment in failing projects, such as system upgrade, consumed a lot of money and human resource, leading to losses.
Shepard (2006) point out that, Border Books failed because it was unable to cope up with the technology and e-commerce. The company lagged behind time and was overtaken by technological advancement and failed to seize opportunities, associated to it. Border Books liaised with Amazon.com to manage its online sales and instigate its own e-commerce website in 2008, which clearly indicates its inability to keep pace with the vibrant technology. Having created the Kobo e-book reader in 2010, it still failed. Border Books was forced to abandon its website management and stress on the significance of e-books that eventually affected its online presence and sales.
Adaptation to changing market conditions
Adapting to varying market conditions is an indispensable business behavior by the management. Market conditions describes the general market characteristics such as competitors available, markets growth rate and the level of competition. Market condition can be favorable or unfavorable (Grant, 2005). Amazon reacted to these market conditions, especially with regard to competitors and level of competition by offering products at relatively cheaper prices and free shipping costs upon purchase of a product, whose price is higher than the stipulated value. This action was beneficial since many customers preferred Amazon to other online companies. On the other hand, Border Group preferred offering a wider range of products to its clients to have an upper hand in competition, but this proved disastrous, leading to its downfall. With regard to market growth, Border Group resorted to opening many worldwide branches that were closed in 2009 (Mc Guigan, Moyer & Harris, 2010).
Recommendations for Flexibility in decision-making
To avert the adverse effects that are vulnerable to any business due to changing market conditions many firms to deploy flexibility in decision-making. Market condition refers to the number of incoming competitors, level of competition, and the rate of market growth, which have an influence on the decision, made by a firm.
Openness in decision-making is an essential tool in flexible decision-making (Grant, 2005). Decision makers should have an open mind to new ideas, information sources, and roles. Openness can provide a wider variety of alternatives for decision makers to select from and increases flexibility. A flexible decision-making process is open to varied information from inside and outside the business (Shepard, 2006). To react to changing market conditions, it is crucial for firms to consider outside sources, regarding recent technological innovations and market trends to ensure business sustainability. In the case of Amazon and Border Books, the latter should have reacted by embracing modern technology to cease from collapsing.
Innovative thinking is another way companies should deploy in backing flexibility in decision-making. Prior to implementation of change, it is significant to consider the future needs of the company. Examining a problem in wider perspective instead procedural steps enables flexibility in decision-making. To adapt to changing market condition company managers should think innovatively to introduce a new product or initiate a new trend to put them ahead of the competition. Flexibility, being the solution to varying market conditions, entails information interpretation, drawing conclusions and considering implications (Shepard, 2006). Company’s innovativeness is allied to critical thinking of managers, hence, enables the company to become accustomed to changing market conditions.
Firms need to make a decision, when market conditions change. This is beneficial, when the change is unfavorable in order to maximize profits. Companies should also invest in advertising, when competitors are many to increase their sales. In order to reduce operational costs, when competition is less stiff, firms should reduce advertising and concentrate on efficient operation.
In conclusion, Amazon and Border Group portray the characteristics of the online market. Companies such as Border Group become inefficient and opted to quit the business because of the available stiff competition. Amazon and other companies that have adapted to the changing market conditions have continued gaining grounds. Amazon began business with immense and persistent losses, but later picks up to be among the best online retailers. The similarity between them was that they all had marketing strategies to sustain them in business. Some factors that led to the success of Amazon include diversity in market products, adapting to changing market conditions and affiliate market strategy. Border Books failed because of overinvestment in music and failure to cope up with technology.