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Publish Date: 2024-10-04

Harvard Case - Selling on Amazon at Tower Paddle Boards

"Selling on Amazon at Tower Paddle Boards" Harvard business case study is written by Thales S. Teixeira, David Lopez-Lengowski. It deals with the challenges in the field of Negotiation. The case study is 14 page(s) long and it was first published on : Nov 1, 2016

Amazon is the world's largest online retailer, with a vast global reach and a sophisticated logistics network. The company has a strong track record of partnering with other businesses to enhance its product offerings and expand its market share.

3. Analysis of the Case Study

**Strategic Analysis:*** A partnership with Amazon would provide TPB with access to Amazon's global customer base, allowing it to reach new markets and increase its sales volume.* Amazon's logistics infrastructure would enable TPB to improve its delivery times and reduce shipping costs, enhancing customer satisfaction.* The alliance would allow TPB to leverage Amazon's brand recognition and marketing expertise to increase its brand visibility and generate leads.

Financial Analysis:

  • The partnership is expected to generate significant revenue growth for TPB, as it will gain access to new markets and increase its sales volume.
  • The improved logistics and reduced shipping costs will result in increased profitability for TPB.
  • The alliance will also provide TPB with access to Amazon's financial resources, which could be used to fund future growth initiatives.

Marketing Analysis:

  • Amazon's vast customer base and marketing expertise will provide TPB with a unique opportunity to reach new customers and promote its products.
  • The partnership will allow TPB to leverage Amazon's marketing channels, such as its website, social media, and email marketing, to increase its brand visibility and generate leads.

Operational Analysis:

  • Amazon's logistics infrastructure will enable TPB to improve its delivery times and reduce shipping costs, enhancing customer satisfaction.
  • The partnership will also allow TPB to access Amazon's inventory management and fulfillment services, reducing its operational costs and improving its efficiency.

4. Recommendations

**Phase 1: Establish a Strategic Alliance*** TPB should negotiate a strategic alliance with Amazon that outlines the terms of the partnership, including revenue sharing, product distribution, and marketing collaboration.* TPB should ensure that the alliance aligns with its strategic objectives and long-term vision.

Phase 2: Integrate Operations

  • TPB should integrate its operations with Amazon's logistics and fulfillment services to improve delivery times and reduce shipping costs.
  • The company should also leverage Amazon's inventory management capabilities to optimize its inventory levels and reduce waste.

Phase 3: Develop Joint Marketing Campaigns

  • TPB should collaborate with Amazon to develop joint marketing campaigns that leverage Amazon's marketing channels and customer base.
  • The campaigns should focus on promoting TPB's products and generating leads for the company.

5. Basis of Recommendations

**Core Competencies and Consistency with Mission:*** The partnership with Amazon aligns with TPB's core competency in manufacturing high-quality paddleboards.* The alliance will also support TPB's mission of providing customers with the best possible paddleboarding experience.

External Customers and Internal Clients:

  • The partnership will benefit TPB's external customers by providing them with access to a wider range of products, faster delivery times, and lower shipping costs.
  • The alliance will also benefit TPB's internal clients by reducing operational costs and improving efficiency.

Competitors:

  • The partnership with Amazon will give TPB a competitive advantage over its competitors by providing it with access to Amazon's global reach and logistics infrastructure.
  • The alliance will also allow TPB to leverage Amazon's marketing expertise to increase its brand visibility and generate leads.

Attractiveness:

  • The partnership is expected to generate significant revenue growth for TPB, as it will gain access to new markets and increase its sales volume.
  • The improved logistics and reduced shipping costs will result in increased profitability for TPB.
  • The alliance will also provide TPB with access to Amazon's financial resources, which could be used to fund future growth initiatives.

Assumptions:

  • The partnership will be mutually beneficial for both TPB and Amazon.
  • Amazon will provide TPB with the necessary resources and support to achieve its growth objectives.
  • TPB will be able to effectively integrate its operations with Amazon's logistics and fulfillment services.

6. Conclusion

The strategic alliance between Tower Paddle Boards and Amazon will enable TPB to accelerate its growth, expand its international presence, and enhance its e-commerce capabilities. The partnership will leverage Amazon's vast global reach, logistics infrastructure, and customer base to provide TPB with a significant competitive advantage.

7. Discussion

**Alternative Options:*** TPB could consider partnering with other e-commerce platforms, such as Shopify or Etsy.* The company could also consider expanding its international presence through its own distribution channels.

Risks and Key Assumptions:

  • The partnership with Amazon could lead to TPB becoming dependent on Amazon for its sales and distribution.
  • Amazon could potentially use its market power to negotiate unfavorable terms for TPB.
  • The integration of TPB's operations with Amazon's logistics and fulfillment services could be complex and time-consuming.

Next Steps:

  • TPB should conduct due diligence on Amazon to assess its financial health and operational capabilities.
  • The company should negotiate a strategic alliance agreement that outlines the terms of the partnership, including revenue sharing, product distribution, and marketing collaboration.
  • TPB should develop a plan to integrate its operations with Amazon's logistics and fulfillment services.
  • The company should launch joint marketing campaigns with Amazon to promote its products and generate leads.

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Case Description

By June 2012, Stephan Aarstol felt that he had successfully passed the first critical stage of his ecommerce business. As the founder and CEO of a standup paddleboard (SUP) business, he had built a strong relationship with Asian manufacturers, built a small warehouse and fulfillment center, designed an innovative line of inflatable SUPs, and built an ecommerce website that sold boards and accessories to consumers. After the rising trend in interest for the sport provided a strong wave of growth in sales, Aarstol contemplated the next stage at Tower Paddle Boards. Should he partner with Amazon to sell his full line of boards--manufactured under his brand--and accessories--manufactured by other brands? Should he sell to Amazon? Should he sell on Amazon marketplace? Or should he avoid the powerful online retail giant altogether?

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