After posting your initial response to the question, begin making comments to your peers (at least two responses to at least two of your peers). A minimum of two comments made on two different days must be posted in the discussion for a passing grade

Learning Goal: I’m working on a business question and need guidance to help me learn.

PART B: PEER RESPONSE

After posting your initial response to the question, begin making comments to your peers (at least two responses to at least two of your peers). A minimum of two comments made on two different days must be posted in the discussion for a passing grade. The comments must be early enough before the end of the week to allow for replies. Responses are due on Sunday by 5:00 p.m. CT.

Student 1

The logistics and supply chain industry is one area I am familiar with. The movement of goods from the source to the end customer is very complicated and must be seamless. The two areas within Porter’s Five Forces which affect the logistics and supply chain industry are competition and the threat of new third-party logistics (3PL) providers (Scott, 2022). Porter’s Five Forces comprise different levels, competition in the industry, the potential of new entrants into the industry, the power of suppliers and customers, and the threat of substitute products. The competition within the industry is the number of competitors and their ability to undercut a company (Scott, 2022). For example, Coca-Cola has Pepsi its main competitor followed by other soft drinks such as RC cola, Sunkist, and others. The second is new competitors within an industry that provide better products or services. For example, Aldi (German a small grocery store) offers unique food and household items at affordable prices (Aldi, 2022). The third is the power of suppliers who can drive the costs of raw materials or inputs to an organization (Scott, 2022). For example, Proctor and Gamble raised its prices of laundry and personal health care products and raw material costs rose 44% as of January 2022 (Zimmerman, 2022). The next is the power of customers the number of customers and their significance to the business. In 2022, Walmart averaged 230 million customers weekly and generated 573 billion in revenue (Statista, 2022). The final stage is the threat of substitution of services and products (Scott, 2022). Walmart introduced Walmart+ in 2020 as a substitute for Amazon Prime to compete in food and goods. within the 3PL industry is between UPS, FedEx, C.H. Robinson, and XPO Logistics. Customers seek each company to send products at an affordable rate within a certain time. The second is the emergence of new 3PL service providers who can deliver products however the service or sufficient investments may lack. UPS is one of the largest providers and must stay on top with FedEx on its heels.

UPS began in 1907 with founders Claude Ryan and Jim Casey in Seattle Washington (UPS, 2022). UPS operates in 220 countries globally completing 2,000 flights daily with 582 aircraft. The three environmental technological changes, political regulations, and demographics. Technical change can radically reshape a firm’s landscape and sometimes society with it (Dyer, 2020). UPS competes and maintains two large data centers in New Jersey and Georgia with a mainframe capacity of 117, 422 (UPS, 2022). Additionally, UPS processes 63 million tracking requests daily and which is no easy feat. Secondly, political regulations passed through legislatures may alter the shape of the firm’s operations (Dyer, 2020). UPS only accepts air shipments of UN3090 or UN3480, lithium metal, or ion batteries packed alone (without equipment) as fully regulated shipments. Section II or 49CFR 173.185(c) will not be accepted for air transport (UPS, 2022). Demographics changes in overall people, age, gender, or income distribution (Dyer, 2020). UPS delivers to North America, Latin America, the Caribbean, Asia Pacific, and Canada. UPS mass markets its services globally and reaches many different demographics on different continents.

Lance

References

Aldi, (2022). Aldi Our Mission. Aldi.com. Retrieved from: https://www.aldi.us/en/about-aldi/our-mission/

Dyer, (2020). Strategic Management Concepts and Cases. 3rd Edition.

Scott, G. (2022). Porter’s 5 Forces Explained and How to Use the Model. Investopedia.com. Retrieved from: https://www.investopedia.com/terms/p/porter.aspLinks to an external site.

Statista, (2022). The number of weekly customer visits to Walmart stores worldwide from the fiscal year 2017 to 2022. Statista.com. Retrieved from: https://www.statista.com/statistics/818929/number-…

UPS, (2022). About UPS. UPS.com. Retrieved from: https://about.ups.com/us/en/our-company/global-pre…

Zimmerman, (2022). P&G to hike prices as chemicals, and raw material costs soar. SupplyChainDrive.com. Retrieved from: https://www.supplychaindive.com/news/procter-gambl…

Student 2

Porter’s Five Forces model framework include rivalry among existing competitors, threat of new entrants, power of suppliers and buyers, substitute products and services (Brujil, 2018).

Out of the five listed above the two that profoundly affect the ecommerce industry include:

Threat of new entrants – This is very important as we know, Amazon is currently the biggest internet retailer and internet company by revenue in the world. Amazon currently operates in more than 175 fulfillment centers worldwide in more than 150 million square feet of space. While there is always the risk of new market entrants that can copy Amazon’s business model, new entrants will not benefit from economies of scale at the same extent as Amazon. Thus, economies of scale are considering a substantial barrier for new entrants.

While online shopping continues to grow and continues to attract popularity for new entrants in search for new niches and competitive advantages. However, time of entry is a key factor that can increase the threat of new entrants in global e-commerce.

Furthermore, while Amazon has provided product differentiation since it saw an opportunity in online sales back in 1994, when at the time no other companies took on this opportunity. Now, that may not be the case as other companies can do the same and find unnoticed opportunities in e-retail that can threaten the position that Amazon, eBay and Alibaba amongst others have established. Similarly, global e-commerce can be easily disrupted by new star-ups that have the capacity to find new sustainable source of competitive advantage.

Bargaining power of buyers is also a challenge for the e-commerce industry. For instance, Amazon consumers “possess the highest bargaining power because they are able to switch to a competition or substitute product and services and they are price sensitive to a significant extent” (Dudovskiy, 2022, par. 6). However, those new entrants that are pursuing a cost leadership strategy that are highly price sensitive can easily use this aspect of consumer behavior in retail. This in turn, can fuel buyers bargaining power, as this allows new retailers to enter the market that provide cheaper ways of offering products and services. Thus, taking away customers from such retail behemoths as Amazon.

Also, select one company from within that industry, select three of the eight general environment trends (Dyer et al, 2020), Chapter 2, pp. 31-36 [eBook], including the eight items in the outer edge of Figure 2.3) that are having or could have the most impact on the company. Justify your selection of trends using sources.

Amazon is the company selected from the e-commerce industry. Three of the eight general environmental trends (Dyer et al, 2020) that could have the most impact on the company include:

• Technology change – Although technology is the backbone of Amazon and is what made it the most profitable in the world, it must also continue to focus on technology in terms of cloud computing to satisfy its customers. Additionally, cybercrime is a threat to Amazon, as consumers and third-party sellers have concerns about their sensitive data like credit/debit card and any personal/confidential information stored on Amazons website (Farooq, 2022).
• Legal Regulatory Forces – Amazon must comply with different laws and regulations. Legal factors that affect Amazon include anti-trust laws, discrimination laws, consumer protection laws for e-commerce business and data protection laws.

Additionally, Amazon has used counterfeit product regulations as an opportunity by increasing its efforts to minimize the counterfeit sales on the e-commerce platform. Amazon’s current anti-counterfeit policy ensures that every product offered by sellers must be authentic, and it prohibits the sale of fake products (Farooq, 2022).

Another legal factor and a threat affecting Amazon is the EU GDPR (General Data Protection Regulations), which is the collection of customer data such as name, emails and bank information. Data protected by law. Amazon must be wise and careful as in the past the European Union has launched investigations and fined Facebook and Google for violations of such data, “covered by the e-Privacy Directive, which governs the privacy of communications rather than the GDPR” (Braun, 2022).

• Social/Cultural Forces – Amazon has made it easier for consumers to stay at home as now they can use Amazon delivery to order just about anything on the Amazon marketplace, to include groceries now from Amazon Fresh. Additionally, while younger generations are crazy for online shopping since mobile devices has made it easier for internet access, this is not always the case for older generations that still struggle with technology. Although some older consumers that have difficulties walking and being outside can also use Amazon online shopping to their advantage. Hence, online shopping has made Amazon extremely popular and according to a survey, “20 percent of Americans believe that Amazon has a positive impact on society as compared to any other Tech company like Google, Apple, Facebook or Microsoft” (Molla, 2018, par. 2-3).

References

Braun, E. (2022, January 5). Google, Facebook face big privacy fines in France. POLITICO. Retrieved on October 24, 2022, from https://www.politico.eu/article/google-facebook-face-big-privacy-fines-in-france/Links to an external site.

Brujil, G. H (2018, June 7). The Relevance Of Porter’s Five Forces In Today’s Innovative and Changing Business Environment. SSRN. Retrieved from https://dx.doi.org/10.2139/ssrn.3192207Links to an external site.

Dudovskiy, J. (2022, March 25). Amazon’s Porter’s Five Forces Analysis. BRM. Retrieved from https://research-methodology.net/amazon-porters-five-forces-analysis-2/#_ftnref1Links to an external site.

Dyer, J., Gdfrey, P., Jensen, R., & Bryce, D. (2020) Strategic Management Concepts and Cases. 3rd Edition. [eBook edition]. Wiley.

Farooq, U. (2022). Pestle Analysis Amazon. Marketing Tutor.net. Retrieved on October 24, 2022, from https://www.marketingtutor.net/pestle-analysis-of-amazon/Links to an external site.

Molla, R. (2018, April 22). People think Amazon has the most positive impact on society out of any major tech company. Vox. Retrieved from https://www.vox.com/2018/4/22/17261132/amazon-positive-impact-society-tech-company-surveyLinks to an external site.