We already defined the importance and features of a successful business network, through the necessity of 5 key cornerstones – Fire-Aim-Ready Innovation, $eed-to-$tore Efficiency, Transaction Optimisation Profitability, Advanced Product Phasing, and Results-focused Outsourcing and Modularisation – in the previous article. Now let us prove it by taking an example, which reflects their necessity. Amazon is a perfect example of company applying these five characteristics efficiently, which led the company to an undeniable success. Jeff Bezos, Amazon’s founder, knew how to use them to its benefits. This success enabled Jeff Bezos to “build the largest online retailer in the world, where customers can acquire anything that they desire over the Internet”, said Vivek Sood in The 5-STAR Business Network, when exposing Amazon’s success. The company, through a very efficient and smart strategy, managed to achieve low prices, a wide inventory choice, convenience, and customer satisfaction. This was possible because Amazon’s strategy was based on the 5 cornerstones of successful business networks. The main advantages for customers provided by Amazon were low prices and quick delivery. In fact, customers could get their product very fast by ordering on Amazon.com than any other website. Then, Amazon was far beyond its competitors, and this has been made possible thanks to its thoughtful strategy. First, innovation was very important, especially in terms of designs, and especially at this time because there were only the first fruits of the e-commerce. In fact, online commerce was kind of innovation itself for Amazon, because it enabled people to get whatever they wanted online. Besides, the fast delivery was a result of $eed-to-$tore efficiency: by using efficiently the supply network, Amazon could give satisfaction to customers faster than competitors, which pushed the company towards the leaderships, about the online commerce. Jeff Bezos once said, “Life’s too short to hang out with people who aren’t resourceful”, a sentence that speaks for itself. It shows that Amazon knew how to choose the right partners and benefit from all the resources of its supply network. In fact, there is no point in collaborating with suppliers that do not offer the best results. Provider selection is very important despite the number of them available on the market. Then, Amazon is very good at Transaction Optimisation Profitability, and this is what made the company so profitable, and created a virtuous circle. About Advanced Product Phasing, it is obvious that Amazon was also very good. In fact, if you look at the evolution of the products sold by Amazon, you can easily notice the logical evolution, which follows the innovation and product life cycle. Finally, Results-focused Outsourcing and Modularisation have also played an important role in Amazon’s success. In fact, according to Vivek Sood, “Outsourcing and Modularisation form key underpinning of Amazon’s ability to act”. Services are outsourced in a very efficient manner for the company to achieve better results. In effect, this is a results-oriented outsourcing. Besides, IT services and logistics services are both chosen according to a result-oriented process and they work in a results-oriented environment too. The data driven approach is mainly responsible for that, and it was very helpful to have this approach for Amazon. Indeed, data are very important when building a global business network, and it will be the basis of provider selection especially, so data collection cannot be neglected. by Anais lelong
Amazon and the 5 STARS
TIME TO READ
January 8, 2019
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Our Quick Notes On Five Flows Of Supply Chain Management
Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.
- What are the five flows of SCM?
- Why are they important TO YOU?
- How can you map, track, and optimise these flows to serve YOU?
- What is the importance of difference between "Supply Chain" and "Value Chain"?
- What are the stellar case studies of each of the five flows?