Business & Marketing Case Study: IS 650 Final Case

IS 650 FINAL CASE
Name:
Institution:
Course Code:
Date:
What are the primary advantages that Pedalspark could capitalize on, if they decided to partner with Amazon and FBA their new bike? Build the case for how these advantages would outweigh going direct channel.
At the moment, Pedalspark products take up to two weeks to ship to the consumer. Amazon logistics engine is well oiled and efficient. FBA has helped cut shipping time to hours in some cases. Amazon has spent billions of dollars to build its efficient delivery system which has many warehouses in different countries and states, a large fleet of planes to move products faster from manufacturers to consumers and many strategic partners to help the company deliver products faster and more efficiently. Leveraging on Amazon’s efficient system to deliver products to the consumer in a shorter time span would not only increase sales, but also improve the customer experience and satisfaction. Customers need their products delivered fast, and at the moment Pedalspark is not in a position to do so. Therefore, it can take advantage of Amazon’s supply chain network to deliver products to its consumer faster.
Secondly, Amazon is likely to increase sales and increase Pedalspark’s market share. Gideon noted that if they “put the new bike on Amazon, they can reasonably expect to sell 10,000 units a year” CITATION Tha19 \l 1033 (Teixera, 2019). The last year the company had only sold 2000 units and the prospective chance of increasing the number of units sold 5-fold would significantly increase the company’s market share CITATION Tha19 \l 1033 (Teixera, 2019). As a small company, it is wise to leverage on Amazon’s marketplace to claim a larger market size. The more units sold, the higher the profit margins and the more the Pedalspark product brand grows. More sales would also translate to higher customer feedback which would help the company to reflect customer preference in future product designs.
As Aarstol noted, Amazon will also give Pedalspark a ‘ton of exposure’ CITATION Tha19 \l 1033 (Teixera, 2019). The retail market is constantly evolving and keeping track of it requires a lot of resources. The easier way around it is to leverage on the global market place, Amazon, to help adapt to the evolving market. Amazon equips sellers with a lot of tools to help them make strategic decision about their products to increase sales. Amazon tools are also backed by big data collected by the company about consumers over many years of operations hence they are effective and reliable. Developing similar products inhouse or using purchasing them would be expensive for a small company like Pedalspark.
Using the readings from above, and with additional support from the readings from our class, describe the main informational edges and competitive advantages that Amazon has over 3rd party or FBA sellers using their marketplace. Can you make the case for if any partnership with Amazon could be long term, or will Amazon eventually move to the "recoup" phase?
First, Amazon owns and controls the customer relationship. The costumers interact with the sellers through the Amazon platform and therefore Amazon ultimately controls ...