Financial Management Cash Management Techniques

Cash rebates, though may look deceptive in some manner to the consumers, they worked well. Special offers like zero down payment, buy now and pay later strategies made by the retail companies look suspicious but when it seen under the viewpoint of businessmen these are the tactics they rely upon to survive in the market. So, it can be said that their strategies are ethically correct.

Amazon.com has become one of the biggest online retailers of the world. Amazon was a small company that used to sell books on the Internet. Slowly with precision planning and goal oriented strategies they were able to become one of the biggest online retailers. One of the important strategies to study is the feasibility study.  Feasibility study is an important phase in the development process. It enables the developer to have an assessment of the product being developed. It refers to the feasibility study of the product in terms of outcomes of the product, operational use and technical support required for implementing it.

Feasibility study should be performed on the basis of various criteria and parameters. The various feasibility studies are (1) Economic Feasibility,        (2) Operational Feasibility and (3) Technical Feasibility.

Their strategies include low price and free shipment. This factor played an important role in the long-term development of the company. The cheaper prices of goods with high quality and further free shipment attracted many. Another factor is the customer service. Customer plays an important role in the development of the company because it is the customer who uses the product that was developed by the companies and Amazon’s services were good at it.

To stay and hold the position in the present competitive market Amazon has planned to expand its business outside US like Eastern Europe and Far East Asia.  Amazon is encouraging other companies to advertise their product on their website. A study has shown that Amazon would make more profit in diversifying than expanding.

TOWA matrix (Threats-Opportunities-Weaknesses-Strengths) has been used to develop feasible alternative strategies. The matrix consists of four quadrants. They are (1) using strengths to overcome weaknesses,

(2) Using strengths to overcome threats, (3) overcoming weaknesses to take advantage of opportunities and (4) overcoming weaknesses to address threats.

First quadrant concentrates on possible strength-opportunity strategies. Important factors are to hire highly skilled workers, wide brand recognition, customer satisfaction, effectively and efficiently raising capital resources, etc.

Second quadrant concentrates on possible strength-threat strategies. Important threats that have to overcome are changing government regulations, seasonal shopping, and competition from ebay and Wal-Mart, protect business and customer information, currency exchange, etc.

Third and Fourth quadrants concentrates on Possible Weakness-Opportunity Strategies and Possible Weakness-Threat Strategy. Third quadrant looks at reviewing product, develop standards up to the customer satisfaction, etc. Fourth quadrant looks at implementing backup systems, implementing policies to protect and avoid security risks.

Since these strategies give a wide range of choices to the customer they can be supported.

References

Chevalier, Judith, Goolsbee and Austan. (2003, April). Measuring prices and price competition online: Amazon and Barnes and Noble. Retrieved Sep 28, 2006, from http://gsbwww.uchicago.edu/fac/austan.goolsbee/research/amzn.pdf

Frey, Christine, and Cook, John. (2004, January 8). How Amazon.com survived, thrived

and turned a profit. Seattle Post-Intelligence.  Retrieved Sep 28, 2006, from

http://seattlepi.nwsource.com/business/158315_amazon28.html?source=techdirt

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