Amazon.Com's European Distribution Strategy
Amazon
Amazon is one of the biggest and most famous online stores in the world. It is divided into several independent organizations like Amazon Europe, Amazon US and Amazon Japan. Amazon was founded in 1995 by Jeff Bezos. At the beginning it was just a platform for selling books at soon it became the world’s biggest bookstore with up to 2,5 million different titles. Their strategy was clear and easy: hold modest inventories and rely on wholesalers. The wholesaler can fulfill the order quickly while Amazon employees pick and pack the order and ship it to the customer. In 1996 Amazon grew really quickly by expansion of their distribution center, increasing number of titles and software development. In 1998 they were not longer a bookshop any more but expanded their product lines to music and videos.
However, they had to face tough competition, especially in 1998. So remain the leader of theonline stores Amazon decided to pursue a “get big fast” strategy to increase their revenue. Therefore they added new product lines and adapted its supply chain and distribution network. One big decision was also where they should locate their distribution center and how many they should build. Amazons pick was a distribution center in Nevada, Kansas and Dallas. Soon also three more centers were added to serve the Midwest and the Southeast. The next step was to choose which product types each of the distributions centers should carry. After that they had to make a decision regarding the equipment in the new distribution centers and the technology used in their warehouses. Finally, to maintain high levels of quality and productivity in its distribution centers, Amazon developed key metrics to measure worker performance, including number of items picked per hour, free replacement rate, inventory accuracy, number of hours from order confirmation to shipment, and cost per unit shipped. Performance information was routinely shared with individual workers.
In 2000 the new
Amazon is one of the biggest and most famous online stores in the world. It is divided into several independent organizations like Amazon Europe, Amazon US and Amazon Japan. Amazon was founded in 1995 by Jeff Bezos. At the beginning it was just a platform for selling books at soon it became the world’s biggest bookstore with up to 2,5 million different titles. Their strategy was clear and easy: hold modest inventories and rely on wholesalers. The wholesaler can fulfill the order quickly while Amazon employees pick and pack the order and ship it to the customer. In 1996 Amazon grew really quickly by expansion of their distribution center, increasing number of titles and software development. In 1998 they were not longer a bookshop any more but expanded their product lines to music and videos.
However, they had to face tough competition, especially in 1998. So remain the leader of theonline stores Amazon decided to pursue a “get big fast” strategy to increase their revenue. Therefore they added new product lines and adapted its supply chain and distribution network. One big decision was also where they should locate their distribution center and how many they should build. Amazons pick was a distribution center in Nevada, Kansas and Dallas. Soon also three more centers were added to serve the Midwest and the Southeast. The next step was to choose which product types each of the distributions centers should carry. After that they had to make a decision regarding the equipment in the new distribution centers and the technology used in their warehouses. Finally, to maintain high levels of quality and productivity in its distribution centers, Amazon developed key metrics to measure worker performance, including number of items picked per hour, free replacement rate, inventory accuracy, number of hours from order confirmation to shipment, and cost per unit shipped. Performance information was routinely shared with individual workers.
In 2000 the new