319 Tutorial 1

Tutorial Activity 1
CASE 1.1 AMAZON REPORTS RECORD CHRISTMAS SALES

(source: The Gaurdian, 28 December 2005)
http://www.gaurdian.co.uk/technology/2005/dec/28/news.shopping
The online retailer Amazon was today celebrating record Christmas sales after its UK arm delivered up to
480,000 gifts a day in the run-up to the festive weekend. On its busiest day, Amazon.co.uk shipped more
than 256 tonnes of goods, with a Royal Mail truck leaving one of its three distribution centers every 15
minutes.
December 12 proved to be the busiest day for orders across the company’s worldwide business, with
customers buying a total of 3.6m items – 41 items every second. More than 108m orders were placed
globally during the whole of the holiday season. The retailer’s bestselling book in the UK was Does
Anything Eat Wasps and 101 Other Questions, which sold more than double the number of copies of last
year’s top-selling title.
Other top titles included Is It Just Me Or Is Everything shit? By Alan McArthur, and Jamie Oliver’s latest
cookbook, Jamie’s Italy. Madonna led music sales with her Confessions on a Dance Floor album,
followed by now that’s What I Call Music! Volume 62 and Intensive Care, by Robbie Williams. Amazon’s
consumer electronics division was dominated by sales of MP3 players and accessories, with the Illogic
docking station for iPod music players the bestseller. The company has delivered gifts and products free
of charge when customers spent at least £15 on its UK website – down from £19 last year – in a bid to
combat tough competition among retailers.
In October, the group warned that sales growth across its global operations in the final quarter of this
year could be as low as 13% – well below the 31% recorded in the same period of last year.
Amazon.co.uk, which began life as Book pages in 1996 and was acquired by Amazon.com in early 1998,
is unlikely to be the only online retailer to report a bumper Christmas. In the run-up to the festive
season, IMRG, a body representing retail sites, reported a 50% year on year rise in sales in the 12months
to November 2005. UK internet sales reached a record £2bn during the month, while high-street sales
for the same period grew by only 0.9%
Questions
1. Can you think of any reasons (social/technological/market) that led to the increase of online sales?
2. Do you think that Amazon will continue to dominate the e-tailing market? Why or why not?
CASE 1.2 SONY CHIEF OUTLINES NEW STRATEGY BY ANDREW EDGECLIFFE-JOHNSON AND PAUL
TAYLOR (Source: Financial Times 5 January 2006)
Sir Howard Stringer, Sony’s chairman and chief executive, on Thursday set out a plan to integrate the
company’s video and music content more deeply into its technology, as he outlined four entertainment
‘pillars’ on which the group would focus.
He defended fiercely Sony’s ownership of both content and the technology used to capture, store and
distribute it. ‘No other content company has such a complete understanding of technology and no other
technology company has Sony’s insight into content,’ he said. ‘Content and technology are strange
bedfellows but we are joined together,’ he added. ‘Sometimes we misunderstand each other, but isn’t\
that the nature of a marriage?’ he asked. Sir Howard’s speech to the Consumer Electronics Show in Las
Vegas marked his most detailed strategic announcement since he unveiled a restructuring plan in
September. While that announcement focused on financial targets, including plans to reduce costs by
$1.72 billion and cut 10,000 jobs, Thursday’s speech highlighted new products that would reflect the
changing relationship between content and technology. He expressed strong backing for Blu-ray, the
Sony-backed high-definition DVD format competing with HD-DVD, backed by Toshiba. In spite of fears of
a format war, Sir Howard insisted: ‘Blu-ray has momentum and it is happening now.’ Sir Howard – Sony’s
first non-Japanese leader – said it would concentrate on four categories in pursuing the changing
consumer entertainment market: high definition video and audio technology; digital cinema; video
gaming and ‘e-entertainment’. Sir Howard defined e-entertainment as products reflecting consumers’
desire for more choice and convenience in how they access entertainment.
‘Content is no longer pushed at consumers, it is pulled by them,’ he said. He said the advent of ‘higher
definition’ screens could be more profound than the shift from black and white to color television, and
said Sony was best placed to benefit from consumers upgrading their technology. Sir Howard, who was
promoted to his current job in June, is expected to give more financial detail on the progress of its
restructuring later in the month. Analysts hope he may elaborate on which businesses Sony intends to
sell as it focuses on fewer activities.
Questions
1. Discuss the pros and cons of the new strategy being adopted by Sony.
2. Is the new initiative triggered by internal or external changes? Defend your ideas.

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CASE 1.1 AMAZON REPORTS RECORD CHRISTMAS SALES

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