The Impact of Internet on Supply Chain Industry: Amazon vs. eBay

The Impact of Internet on Supply Chain Industry: Amazon vs. eBay

Introduction

Internet has brought revolution in different sectors of the economy, especially in the supply chain industry. Internet is the fastest growing medium in the current business environment. Many organizations are able to gain benefits by using internet in order to achieve economies of scale by reaching new customers for the present products, new markets for the products and also able to launch new products in the market. Internet has made the supply chain industry highly competitive and thus it has made it easy for many organizations to increase their customer base by attracting more customers from all the over. Many organizations have used internet in order to enter in the e-commerce business. There are many competitors in the supply chain industry among them are Amazon and eBay who have the oldest rivalry in the history of this industry. Internet has enabled both the companies to offer their services in all parts of the world. The following research report will take into consideration the market and financial performance of both the organizations in order to find out that among these two companies which one is highly profitable and which organization has the greatest share in the market. On the other hand in order to analyze the financial performance data will be extracted from the financial statements and financial ratios of the firm during a period of last 5 years.

Market Analysis of eBay and Amazon

The year 2008 was a disastrous year for all the organizations in UK, US and all parts of the world, as recession affected the financial performance of each organization in different parts of the economy. Later on the year 2010 and onwards have become the years of revival for many organizations in different parts of the world. Similarly Amazon and eBay are in the phase of revival and are able to use internet technology in order to regain their position in the supply chain industry.

Amazon Market Overview

Amazon is one of the largest retail organizations in the supply chain industry of US. The company uses internet in order to sell variety of products to the customers in not only US but in other parts of the world as well. The core products sold by Amazon through their website includes: books, electronics, home use products, devices, magazines, cellular phones and several other products. Internet has affected the operations of Amazon and has enabled them to manage and effective and efficient supply chain management system through which the organization is able to provide the products on right time and at the right place. Amazon in the year 2008 was having 7.5% of market share and since then the e-commerce business of Amazon has gone through different phases of growth and decline. Since 2003 the company started to earn its annual profits and since then it has able to run its business profitably. In the year 2008 Amazon was able to ...