Amazon versus Webvan

Why Amazon Succeeded?

Amazon’s success was not just because of good luck. In short, there are several reasons that made this web site successful. First, it has a very clearly defined purpose: to provide quality online customer service. It automates tasks normally handled by a human customer service representative. Lastly, they have spent money on marketing their website so the public knows who they are and how to find them online easily. 

This website is a prime example of successful, intelligent websites that utilize database information to create dynamic web content. Making an interactive website will keep people coming back to your website again and again so you can give them new advertising information and offer new products and services.

Another reason customers like buying from Amazon.com and its associates because they provide a unique and quality service as well as security in credit card transactions. Amazon.com undertakes that every transaction made “will be 100% safe”. 

According to Amazon.com, customers pay nothing if unauthorized charges are made to credit cards. In the US, the Fair Credit Billing Act, a bank cannot hold a cardholder liable for more than $50 of fraudulent charges. Customers are given the option to phone or fax in their full credit card numbers. In the UK, Amazon.co.uk, covers liability up to?

An important ethical crisis that an e-Business face deals with how they handle their customers? data. It involves questions about what information they should collect (in addition to what is required to complete a transaction), how much of it they store, where they store them, how they secure the data etc. 

Another thing that most e-Businesses do is sell their customer lists to other vendors who sell related products. Many customers would be rightfully concerned about who their information is being sold to. Data like their contact information, purchasing habits etc. could be used in a damaging way (identity theft is a major concern) by unscrupulous people. So e-Businesses have to be really careful in protecting their customers?data and who they sell this information to.

E-Businesses like Amazon.com spell out their security and privacy policies in detail on their web sites. Amazon.com’s privacy statement details what information it collects from custom college papers users when placing an order or signing onto a specific service. 

Customers can choose not to provide certain information, but then they might not be able to take advantage of many of Amazon.com features. They use the information that customers provide for such purposes as responding to customer requests, customizing future shopping, improving their stores, and communicating with the customers.

Why Webvan Failed?

Also, Webvan’s failure was not just contributed to the bad luck. It’s possible that Webvan’s failure was probably pre-ordained from the day it was formed. It had at least three systemic flaws:

High critical mass threshold.

Webvan’s high-tech order-picking centers were so expensive that the company was upside-down financially from the day the first one was built. The centers might have performed efficiently at scale, but the company did not survive long enough to prove it.

Low “route density.”

In the Bay Area, at least, Webvan had a hard time managing the number of miles traveled per delivery. Long bridges, congested roads, and a widely spread customer base meant delivery costs never came close to their theoretical efficiencies. Covering the entire local media market (i.e. the “Bay Area”) meant some vans would have to travel an hour or more from the D.C. before returning empty.

Poor understanding of consumer needs and behavior.

Penetration projections assumed that customers would be won over by their initial Webvan experience and that they would thereafter purchase most of their grocery needs online. In fact, consumers warmed slowly to the service, and many used them only for occasional stock-up shopping. Users were enthusiastic, but they didn’t stop using conventional supermarkets too.