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1. Describe the history and core business of each company.
In a world where anyone can purchase just about anything online, it can be difficult to start and maintain a business selling goods online. Media such as CDs, books, and movies is a common ware being sold on the Internet. Over the last decade, online stores have come and gone so often, many people scoff at their inception. But Amazon.com is not such a company. It is one of the largest Internet sellers of media in the world today, and has expanded its selections to include clothing, beauty products, house wares, and thousands of other items.
Jeff Bezos founded Amazon.com in 1994. Originally the business was based out of his garage in his Bellevue, Washington home. A businessman by the name of Nick Hanauer believed in Bezos' idea and decided to invest $40,000 in the venture. When Amazon first decided to go online, its layout was not as flashy as it is today. In fact, the site looked very plain and unattractive to most visitors, causing the business to start out on shaky ground.
At the end of 1999, Amazon had raked in over a billion dollars in sales. It seemed as though the profit would never cease. However, in 2001, Amazon reported a fiscal loss of $1.4 billion, and had laid off over 200 workers in the last year. The beginning of 2001 found Amazon laying off even more workers, totaling over 1000. Instead of giving up, Bezos had an idea: recruit other companies to sell their products online through Amazon as well. The idea worked. Companies such as Target, Toys R Us, Old Navy, and many others have agreed to sell their items through Amazon. Although Amazon is not directly responsible for inventory through these companies, they do get part of the sales, creating a profit for all involved. Since the inception of the idea, Amazon is now back on its feet and remains one of the most popular online vendors in the world today.
Brothers Tom and Louis Borders opened their first bookstore in Ann Arbor in 1971, while they were students at the University of Michigan (Ann Arbor continues to be Borders Group's headquarters). The Borders brothers opened additional stores in Michigan, Atlanta and Indianapolis, and developed a sophisticated system that enabled them to track bookstore sales and inventory. In addition to using it in their own bookstores, they sold their Book Inventory Systems (BIS) to other booksellers, as well. In 1985, they opened their first "superstore," a large-scale bookstore (with a coffee bar) that was to become the prototype of many that came afterward. In 1988, they hired Robert DiRomualdo, a Harvard MBA with retail experience, to help expand the business. Under his leadership, the Borders bookstore chain grew rapidly in the next four years.
The Borders Group expanded internationally beginning with a store in Singapore 1997, then opening more than 40 stores in Europe, Asia and Australia/New Zealand and buying a 35-store chain called, appropriately, Books.
As it became clear that online book retailing, begun by amazon.com, was changing the bookselling business, Borders created their own online presence. But after their initial e-retail efforts resulted in losses for investors, Borders scrapped its website. Due to less-than-expected profits overall, some of the bookseller's private equity investors agitated about poor decisions and poor management and in 2001 DiRomualdo was replaced as CEO.

2. Compare and contrast the management approach each took to Internet marketing and sales.
Amazon.com used the system of supplies chain management. Supply Chain management is the process of managing the movement of goods from suppliers to buyers.
Supply Chain Management (SCM), also known as supply chain integration or supply chain optimization, is the process of optimizing a company's internal practices in interacting with suppliers and customers in order to bring products to market more efficiently.
SCM functions encompass demand forecasting, sourcing and procurement, inventory and warehouse management, distribution logistics, and other disciplines.
Meanwhile, Border treated the Internet like a passing trend rather than a transformative phenomenon.
Borders might have survived if it continued to focus on its core competency as a retail bookseller, while developing new core competencies as an online merchant, and perhaps expanding into other online markets such as music. Borders realized this, but it came too late, when the company was too deeply in debt and a vicious recession was just beginning. The takeaway for individuals and other companies is that being good at one thing often isn't enough these days. What's better is remaining good at one thing, while becoming good at something else, and making sure your entire skill set is something that's in demand.
Your competitors may not be who you think. Borders maintained a traditional mindset almost until the end, focusing on rivals it was familiar with. As the book industry consolidated over the last couple of decades, for the most part that meant Barnes & Noble. But discounters like Wal-Mart and Target now sell books, and deep price cuts (usually matched by Amazon) left Borders in a quandary: It could take a loss to match the discounts, or try to justify higher prices by convincing customers they'd enjoy a premium experience at Borders. Neither worked. Then Google started selling e-books in 2009, bringing yet another huge competitor with low prices into the market. Borders never saw it coming and was poorly equipped to compete.
3. Analyze 3 reasons for Amazon’s success despite not turning a profit for the first five to six (5-6) years.
a) The Management: Only way to manage as large distributed system is to keep things as simple as possible. Amazon keeps things simple by making sure there are no hidden requirements and hidden dependencies in the design. Amazon cut technology to the minimum it needs to solve the problem it might encounter. It does not help the company to create artificial and unneeded layers of complexity.
b) The value and trust: Amazon works from the customer backward. IT focus on value you want to deliver for the customer. Amazon forces developers to focus on value delivered to the customer instead of building technology first and then figuring how to use it. Start with a press release of what features the user will see and work backwards to check that you are building something valuable.
c) Strategy and believe: Amazon.com uses measurement and objective debate to separate the good from the bad. Amazon.com uses deep seated ethic to expose real customers to a choice and see which one works best and to make decisions based on those tests.
4. Discuss 3 reasons Borders, although initially successful and profitable
a) Innovation in books selling business: Borders bookstore feature books as well as special events, including live music, story times, and appearances by artists and authors. The Borders Group subsidiary, Waldenbooks, leads all other book companies in the world in the mall-based book business. The goal of Borders Group, Inc. is to be the best-loved provider of books, music, video and other entertainment, as well as educational and informational products and services.
b) The Expansion: In addition to the US market, Borders Group's efforts at international expansion has led to the establishment of Borders bookstores in the United Kingdom, Australia, Singapore, New Zealand, and Puerto Rico. Borders Group, Inc. also has 32 bookstores in the United Kingdom operating under the name Books Etc.
c) The Inventory Management: The Group's overall sales for 1994 skyrocketed reaching $1.5 billion. With what some analysts have called the industry's most sophisticated computer inventory management and sales system, Borders not only possessed the highest sales per foot ratio in the industry, but was able to track popular titles by selling season. Borders had identified as many as 55 separately defined seasonal patterns and programmed these into the computer system to keep better track of seasonal and regular bestselling titles, and to help maintain a supply of such titles with little or no interruption in prospective sales (Answer.com).
5. Discuss the extent to which the management of each company adapted to changing market conditions.
The Amazon experiment has been under way since 1995, and its core business is taking a good while to fulfill its promise. It has grown from books to products in 35 categories, but most of the original elements of the business model are intact: attract customers with a deep inventory that no retail store can match, offer discounted prices, provide easy navigation and whisk customers through a trouble-free checkout process that is the best in the business.
One important assumption has fallen by the wayside: unburdened by the weight of a network of retail stores, the company was supposed to enjoy low operational costs and good margins. Geography turned out to be a spoiler. A single centralized distribution center in Seattle meant that many customers found that a speedy one-click purchase online would be followed by a frustrating wait offline for the order to arrive. To reduce delivery times, Amazon had to make colossal investments building a network of distribution centers, 15 in North America alone. In order to drive significant business improvements, enable technology deployment and cross-channel experiences, Borders developed its own Borders.com e-commerce Web site. The new proprietary Web site, which was developed in fall 2006, rolled out in early 2008. It allowed Borders to extend successful in-store programs like Borders Rewards to the Web and give customers a live, e-commerce solution using existing in-store Borders Search computer stations when they want to special-order items. In addition, the existence of the new Borders.com also allowed the company to enable key partnerships that built incremental revenues and margins and facilitate other technology and cross-channel opportunities that benefit Borders customers.
6. Recommend 3 ways a company should build in flexibility to back up its decision-making process so as to adapt to changing market conditions.
a) Economically profitable; to maximize a company’s profits, it’s clear that online businesses or e-Commerce are not doing good and are the major sources of losses. Example: Borders has lost a substantial amount of market share to its competitors and was not doing well and went to bankruptcy.
b) Cost of Staff: the cost of staff is sometime one of the controlled expenses. The company management has to make sure to contain that but at the same the company needs trained and efficient, committed and motivated workers to deliver quality customer service.
c) Access to Markets; the third criteria would also boost my point to regulate strictly the online businesses and focus on how to make that new venue in business, accessible and profitable for each entity. There are opportunities for everybody in that business field. Businesses owners should concentrate on finding new markets and make it easier to access those markets

7. Use at least 3 quality sources to support the content of the paper.
Valerie Peterson (2010) Borders’s Group History - The History of the Borders Group Chain of Bookstores. The Borders Group in the 21st Century. http://www.dmnews.com/amazon-deal-lets-borders-focus-on-core-business/article/72269/ Gordon Smith (2006) A history of the worldwide media retailer Amazon.com. Amazon's Core Business.
Stephen Wunker (2011) Barnes & Noble's Smart Strategy. Retrieved (10/25/2011) from http://blogs.hbr.org/cs/2011/06/barnes_nobles_smart_strategy.html…...

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