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Posts Tagged ‘Amazon’

Daniel Pink on Motivation

January 28th, 2011 Comments off

I recently read Daniel Pink’s book, A Whole New Mind, in which he contends that right-brain thinking and those capable of it will rule the world.  Tasks like typical accounting work are increasingly being outsourced or replaced entirely by computers.  I thoroughly enjoyed the book and have even contemplated taking a drawing class of all things to strengthen my right-brain skills.  It was with this mindset that I stumbled upon a TED talk by Pink where he discusses motivation and incentives.  These are areas where companies have failed miserably of late — many contend that the recent economic collapse was really a failure of incentives (read The Big Short for a good summary of these kinds of things or watch the 60 Minutes interview with the books’ author).  Pink reveals that typical carrot/stick rewards system work only in very narrow circumstances and are not applicable to knowledge workers.  In fact, performance drops when higher rewards are offered.

This is fact-based analysis but are businesses getting the message?  Some are…like Best Buy where ROWE (Results-Only Work Environment) has been embraced and the idea of measuring performance by the length of time someone has their butt in their chair is seen as laughable.  Or Google where 20% Time is a tactic to make engineers more engaged but also to allow creativity to flourish that will result in new products. But how many other firms have gone this route?  How many will fail because they don’t recognize the shortcomings (or don’t recognize them soon enough) of their own beliefs about management and incentives.

E-Readers Go Mainstream As Pricing Model Changes

July 30th, 2010 Comments off

One of the most interesting pricing events we have playing out before our eyes right now is in the market of e-readers.  Several weeks ago, Barnes and Noble kicked of a mini-price war by dropping the price of their 3G Nook from $259 to $199 while pricing their wifi-only version at $149.  Within hours, Amazon had responded by undercutting the 3G Nook by selling their 3G Kindle for $189:

Barnes & Noble, the national bookseller, announced Monday that it was dropping the price of its six-month-old Nook e-reader to $199 from $259 and introducing a new version of the device, which connects to the Internet only over Wi-Fi networks, for $149.

Responding rapidly, Amazon.com then cut the price of its popular Kindle e-reader below the Nook, to $189 from $259.

In Price War, E-Readers Go Below $200. By Brad Stone. New York Times. June 21, 2010

As mentioned in the article above, some analysts chalked the price cuts up to the increased threat of the Apple iPad gaining a foothold as an e-book reader while Amazon, in particular, has downplayed that idea.

This week, though, things escalated a bit more.  Amazon announced the next generation of their hardware to be released August 27th.  They are keeping the 3G model at $189 but announced a new wifi-only model for $139; $10 less than the comparable Nook.

Amazon offers $139 wireless Kindle for mass appeal. By Alexandria Sage. Reuters.com. July 29, 2010 7:07pm EDT

Kindle to Go ‘Mass Market’ — Amazon Digs in Heels by Introducing New, Cheaper Version of E-Book Reader. Geoffrey A. Fowler. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 29, 2010. pg. B.6

While all of this has played out, an important shift has happened.  According to the NY Times article linked above, until recently Amazon and Barnes and Noble have sold e-books at a loss while making minimal profits on the hardware.  That has changed now, to where a WSJ piece speculates that the hardware is now selling at a loss with the idea being to make up the shortfall in volume by selling the e-books.  This is more like how printer and cellphones are sold with the “consumables” (ink or minutes, as the case may be) being the profitable item.

Amazon’s price-cutting won’t be cheap. The company said last year that its Kindle manufacturing costs were “significantly higher” than an estimate from iSuppli of $185.49. Costs likely have come down since then, and not offering cell-network access reduces costs as well. Still, it is a good bet the company is losing money at $139 a unit.

The High Cost of a Cheap Kindle. Martin Peers. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 30, 2010. pg. C.12

I’m guessing things will continue to evolve as we head to into the holiday season and some articles I’ve read predict a sub $100 e-reader by then.

I’ve finally made the plunge myself and opted for the $189 Kindle coming out on August 27th but I’m hopeful that even while I have it preordered the price may drop.  Looking at what has happened in the past 5 weeks makes it seem reasonable to expect some price cuts in the next 4, doesn’t it?  Stay tuned…

The Goal, by Eliyahu Goldratt

July 28th, 2010 Comments off

In class I mentioned a great book that reads like a novel if you are interested in learning more about the Theory of Constraints.  That book is The Goal.  If my recommendation isn’t enough, just read the reviews on the Amazon page for this book and I think you’ll be convinced.  If you are involved at all in manufacturing, then my recommendation to you is even stronger that you take a look at this book.  It is a relatively quick read since there is a story — much better than reading a textbook.

Here is the link on Amazon: http://amzn.to/924pYp

One Free Year of Amazon Prime for Students

July 12th, 2010 Comments off

I see that Amazon has launched a new site/product called “Amazon Student” where you can get free Amazon Prime (which give you free 2-day shipping on anything you buy sold by Amazon) for a year.  If you buy textbooks (or anything, I guess) from Amazon this could be a great value.  And it is free so what the heck…

Amazon Student

Categories: Education Tags: ,

Barnes & Noble Plots Strategy to Survive

May 21st, 2010 Comments off

A very timely, front-page article in today’s Wall Street Journal looks at one of the biggest challenges facing an American retailer today: the threat of e-books on the largest brick-and-mortar bookseller in the country, Barnes & Noble.  Having spent years building large stores filled with thousands of titles, Barnes & Noble must now act quickly to turn those assets into a competitive advantage that is not shared by their new competitors.

For 40 years, Barnes & Noble has dominated bookstore retailing. In the 1970s it revolutionized publishing by championing discount hardcover best sellers. In the 1990s, it helped pioneer book superstores with selections so vast that they put many independent bookstores out of business.

Today it boasts 1,362 stores, including 719 superstores with 18.8 million square feet of retail space—the equivalent of 13 Yankee Stadiums.

In the post I made earlier this week about Nintendo, the threat was advancement by competitors in the same market-space.  In the case of Barnes & Noble the forces seem to be more revolutionary as e-books are projected to grab a chunk of market share accelerated by Amazon’s Kindle and, most recently, the Apple iPad.

“By the end of 2012, digital books will be 20% to 25% of unit sales, and that’s on the conservative side,” predicts Mike Shatzkin, chief executive of the Idea Logical Co., publishing consultants. “Add in another 25% of units sold online, and roughly half of all unit sales will be on the Internet.”

Nowhere is the e-book tidal wave hitting harder than at bricks-and-mortar book retailers. The competitive advantage Barnes & Noble spent decades amassing—offering an enormous selection of more than 150,000 books under one roof—was already under pressure from online booksellers.

It evaporated with the recent advent of e-bookstores, where readers can access millions of titles for e-reader devices.

Sometimes in these cases just getting management to acknowledge the threat is half the battle.  It seems Barnes & Noble has at least done that so it will be interesting to see how they position themselves to compete in this new environment.  Like Circuit City (failed) and Blockbuster (on life-support) before them, the very survival of the company hangs in the balance.

E-Books Rewrite Bookselling. Jeffrey A. Trachtenberg. Wall Street Journal. (Eastern edition). New York, N.Y.: May 21, 2010. pg. A.1

Amazon is Buying Used Textbooks

May 10th, 2010 Comments off

This topic is interesting for a couple reasons.  First, the strategy of Amazon getting into the textbook buyback business is an interesting business model.  Second, many people that read this blog are students that can probably make use of this service.  It will be interesting to see how long college bookstores can operated as they have in the past with increased competition on this front not to mention the pressure from Kindle textbooks and the potential of textbooks being replaced by open-source products.

I see that Amazon is paying about $78 for the Horngren textbook we use in Acct 320 and it looks like they will pay the shipping as well.  This might be a good avenue for those of you looking to sell books especially if a book you have is an old edition that the bookstore is not buying back.

Here is the link:

http://amzn.to/bookbuyback

Amazon’s Cash Management

November 14th, 2009 Comments off

amazonFew companies can pay suppliers for goods that they have sold 3+ months after the sale, but it seems that is what Amazon is able to do.  In my opinion, few companies use technology to their advantage to the extent that Amazon does but I’ve only ever considered their use of it to sell things (primarily to me!).  This short article pointed out how Amazon leverages their data to know what to stock and how much will sell and they turn that to their advantage to maximize the time between the date of sale and when they pay their supplier.  It’s no secret how Amazon can charge low prices with little in the way of brick-and-mortar and great use of cash.

Amazon’s Astute Timing. Martin Peers. Wall Street Journal. (Eastern edition). New York, N.Y.: Oct 30, 2009. pg. C.10

Are Amazon, Wal-Mart, and Target engaging in Predatory Pricing?

October 23rd, 2009 Comments off

Some independent booksellers have asked the Justice Department to investigate the recent price-war where certain hardcover bestsellers are being offered for sale by Amazon, Wal-Mart, and Target for $9 or less.  This makes it impossible for independent booksellers to compete according to their trade organization.  The WSJ Law Blog is pessimistic about the possibility of this going very far, but it does make for a current, real-world example of what we have discussed in Chapter 12 with regard to the legal aspects of pricing.

Are Amazon, Wal-Mart, and Target Pricing Like Predators?

Amazon to Launch Kindle for Textbooks

May 5th, 2009 Comments off

Amazon appears to be trying to become for books what Apple is for music.  In seeking to be a one-stop-shop for book buyers, Amazon is expanding their Kindle line to include a larger version that is made for textbooks.
Both the Wall Street Journal and Reuters (piggy-backing on the WSJ story) are reporting that the official announcement will come Wednesday.  It will be interesting to see how supportive students and other stakeholders (like college bookstores and textbook publishers) will be of this venture, but I imagine that at some point electronic books are going to be the norm.  It appears that time might come sooner than I would have predicted just a few months ago.

Amazon Set to Offer Kindle for Textbooks. Geoffrey A. Fowler, Ben Worthen. Wall Street Journal. (Eastern edition). New York, N.Y.: May 5, 2009. pg. B.5

Bigger Kindle e-reader may not be a newspaper fix.  Reuters.  May 4, 2009.

Amazon’s Kindle is Off to College.  BusinessWeek.  May 4, 2009.