Amazon com value chain model

Forrest Burnson In the span of two decades, Amazon has gone from a lowly online bookseller to the most formidable and dominant force in retail.

Amazon com value chain model

Inbound logistics include the receiving, warehousing, and inventory control of input materials. Operations are the value-creating activities that transform the inputs into the final product.

Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc. Service activities are those that maintain and enhance the product's value including customer support, repair services, etc.

Any or all of these primary activities may be vital in developing a competitive advantage. For example, logistics activities are critical for a provider of distribution services, and service activities may be the key focus for a firm offering on-site maintenance contracts for office equipment.

These five categories are generic and portrayed here in a general manner. Each generic activity includes specific activities that vary by industry. Support Activities The primary value chain activities described above are facilitated by support activities.

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Porter identified four generic categories of support activities, the details of which are industry-specific. Procurement - the function of purchasing the raw materials and other inputs used in the value-creating activities. Technology Development - includes research and development, process automation, and other technology development used to support the value-chain activities.

Human Resource Management - the activities associated with recruiting, development, and compensation of employees.

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Firm Infrastructure - includes activities such as finance, legal, quality management, etc. Support activities often are viewed as "overhead", but some firms successfully have used them to develop a competitive advantage, for example, to develop a cost advantage through innovative management of information systems.

Value Chain Analysis In order to better understand the activities leading to a competitive advantage, one can begin with the generic value chain and then identify the relevant firm-specific activities.

Process flows can be mapped, and these flows used to isolate the individual value-creating activities. Once the discrete activities are defined, linkages between activities should be identified.

A linkage exists if the performance or cost of one activity affects that of another. Competitive advantage may be obtained by optimizing and coordinating linked activities.


The value chain also is useful in outsourcing decisions. Understanding the linkages between activities can lead to more optimal make-or-buy decisions that can result in either a cost advantage or a differentiation advantage.

The Value System The firm's value chain links to the value chains of upstream suppliers and downstream buyers. The result is a larger stream of activities known as the value system.

The development of a competitive advantage depends not only on the firm-specific value chain, but also on the value system of which the firm is a part. Recommended Reading Porter, Michael E.Apr 01,  · Since speed, convenience and the lowest possible prices define the core strengths of Amazon’s business model, having ownership or control of all elements in its value chain .

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The Health Care Value Chain: Producers, Purchasers, and Providers [Lawton R. Burns, Wharton School Colleagues] on *FREE* shipping on qualifying offers. Written by Lawton R. Burns and a panel of expert contributors, fromthe prestigious Wharton School, The Health Care Value Chainanalyzes the key developments and future trends in the UnitedStates' health care supply chain.

Nov 08,  · amazon also adds value because its service gives the consumer a bill and allows them to pay in a variety of simple ways adding a value of convenience and security.

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amazon also handles, packages, and ships the item to the location of the end consumer therefore adding value of Resolved. Case study on 5 Intensive Strategies (Intensive Growth Strategies) 6 User Reference Strategies 7 Supply Chain Management (SCM) Strategies 10 4.

Discussion 12 5.

Amazon com value chain model

Amazon Prime overlays the subscription and all you can eat business models with the retail model to provide additional customer value. Unknown to. Value Chain, Digital Transformation, Digital Business, Digital Disruption, Business Model Innovation, Digital Industry, Digital Insurance Related Articles Fordlandia .

The purchasing model may help providers as they continue to streamline their businesses for value and efficiency to lower overall costs, he said. Amazon’s foray into the business marketplace could continue to expand in health care, as well.

The Value Chain