On the whole the office supplies industry could have been dominated through this strategic alliance. By bundling the resources and competencies in a joint effort both firms can increase their market share. Both companies will have achieved mutually beneficial outcomes through this strategic alliance as resource and technology gaps could be breached (Osterwalder & Pigneur, 2009). For Amazon, Office Depot already had a huge retail base, so it might have benefitted from the large product line of Office Depot. The business model of Amazon focused on combining physical and informational elements, this would have served useful for Office Depot. Office Depot could have greatly benefited from Amazon’s operational and technology knowledge (Porter, 2001). For instance, Amazon was very strong in e-tailing. Amazon expanded its business beyond its signature item and succeeded at it mainly as a result of its focus on offering its customers convenience, price, customer service, and selection.Ī strategic alliance between Office Depot and Amazon might have strengthened each firm’s competitiveness as they complement each other’s strategic initiatives. Amazon offered high quality customer service over the internet, which was a whole new concept back in the 2000s (Business Week, 2000). Such a business model was scalable, so Amazon increased its market reach. The business model of amazon combined physical elements or operations with informational elements that is virtual store fronts. Amazon sourced its products from wholesalers and retailers.
In the early 2000s which was a pure online book retailer began expanding its services and product offering by entering into fulfillment service partnerships with traditional retailers. After the launch of its website revenue came from both its retail outlets and its ecommerce website. Office depot had a high cost structure as it sold its products at a cost lower than its competitors (Osterwalder & Pigneur, 2009).
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By 1998 office depot could reach customers through two channels, online (through internet) and offline (through its stores). To deliver value for a complete customer experience office depot utilized its key resource that is its ability to change its business model from brick and mortar to e – business. The value proposition of office depot was to ‘stay ahead of what is expected of the firm and drive value to its customer’ (Khosrow-Pour, 2006). Apart from its retail corporate customers and individual buyers, there was a marked increase in ecommerce customers. The main marketing channel was through its retail stores before 1997. During this year, office depot launched a public website, thus increasing its market presence. A planned merger between office depot and staples was blocked by blocked by the Federal Trade Commission in 1997.
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