Scenario 8-2
Following the announcement that the world's largest e-tailer, Amazon.com, made a profit for the first time since it started business in the early 1990s, the company saw more than 90 percent of its market value disappear as part of the dot-com collapse.It is questionable whether or not Amazon figured out a profitable business model after changing its tune several times over those early years.Then it began circling back somewhat to an earlier focus on becoming the Walmart of the Internet.It said it wanted to sell huge volumes of merchandise cheaply, and in the process eke out enough of a profit to satisfy Wall Street.Although investors had to wait some time for the e-tailer to work out the kinks, and it's uncertain how much longer they'll remain patient, Amazon's mainstay retail business may see further improvements as it grows.As we all have now witnessed, unlike brick-and-mortar retailers who must build new stores, stock them, and hire people to staff them, Amazon has been able to open new stores with minimal additional cost.Some years ago, it reported turning over its inventory 17 times a year-close to double that of traditional retailers at the time.And on average, it reported having gotten paid 32 days before it must pay its suppliers-in essence, providing millions of dollars in cash flow.Information updated for 2011, based on the following initial articles:
(David Shook, "Can Amazon Turn Baby Steps Into Strides?," Businessweek Online, February 13, 2002.)
(Rob Hof, "Why Amazon Could Keep Flowing," Businessweek Online, January 5, 2005.)
-(Scenario 8-2) Amazon.com began by facing a myriad of problems since its inception, with perhaps the biggest obstacle being the demise of hundreds of dot-com companies in the late 1990s and early 2000.Those dot-com companies that did survive initially had a difficult time making a profit, and over time a few began to face new competition.The issue as to who will supply online consumers has been continually evolving and changing since then.This type of information would most likely be noted in the ____ section of an ad plan.
A) historical context
B) industry analysis
C) market analysis
D) competitor analysis
Correct Answer:
Verified
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