Key Learning from last session: Entry of Amazon in India (Relating it to Egg Model)

Dear Sir

Please find below the write-up for blog based on the discussion of Egg Model in the last session. I could relate this to the localization and changes made by Amazon in its business model to enter India recently.

The model describes the impact of outside forces,namely the government policies and the internal forces, namely partners and the capabilities on a business model.

 

Impact of outside forces (Regulation and society):

·         Impact of Regulatory forces:

Indian regulations prevent international e-tailers from making direct sales. Thus, Amazon India currently follows Marketplace model by adding sellers from the pool of small and medium enterprises in India which have something to sell. Also, to avoid shipments getting delayed at toll booths or held up by police demanding bribes, Amazon gets all the documents and permissions required for it along with extra permits.

·         Impact of Society:

Indian customers are focused upon low prices, wider product range and reliable delivery. A seller on Amazon can deliver directly or through the logistics network setup by Amazon in India wherein it also adds an FBA (Fulfilled by Amazon) tag which not only serves the purpose of creating trust in the minds of customer for the brand but also ensures that the delivery is reliable and creates an experience for the customer. This helps Amazon achieve more control over the product quality and earn customer trust which is an integral aspect in online retailing in India.

It has also addressed the problem of unstable Internet Banking system in India by using a made-for-India system that keeps orders active and allow customers to try again once their payments fail along with the option of cash on delivery.

Impact of internal forces (Assets and capabilities):

Amazon is building up an expansive logistics and supply chain that will support its operations once the Indian regulations change. It gives the sellers a choice to access to Amazon services like payment gateways, shipping and logistics. It is working with local vendors to ensure goods are packaged properly and training local couriers so as to reduce the delivery time. It is building its own logistics network which can be leveraged upon when it is allowed to sell directly to customers.

Submitted By:

Tanvi Baranwal

12FN-144

Section- A

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Regards

Tanvi Baranwal

Alumni Relationship Committee

Institute of Management Technology, Ghaziabad

Ph: +91-7503139227