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Word Count: 630
Situation Submarinocom is a leading e-retailer in Latin America that offers products in multiple categories Books Rare and Imported Books CDs MP3s Video and DVDs Toys and Games Software and Computer Supplies Cell Phones and Consumer Electronics TVs DVD Players etc The company is headquartered in Brazil with virtual stores in Argentina Mexico Spain and Portugal Submarinocom was launched in June 1999 by Antonio Bonchristiano Bonchristiano obtained backing from GP Investments and acquired BookNet with the concept of replicating the Amazoncom business model Between November 1999 and September 2000 Submarinocom launched online stores in Brazil Argentina Mexico Spain and Portugal Submarinocom is challenged with achieving aggressive sales targets set by investors in 2001 and profitability in 2002 KEY POINTS 1 Economy in 2000 - NASDAQ fell 50 from mid-March through the end of 2000 Investment banks and other institutions started reappraising Internet Business Models They realized that the same rules applied to e-commerce as to brick-and-mortar companies and that financial statements and credit ratings of most Internet companies looked dreadful 2 Challenges of the Latin American Market - Although the Internet sector in Latin America was growing Latin America presented several challenges for continued growth the average income per capita was low PC and Internet access was low credit card usage was low inflation was high and capital was scarce In addition economic and cultural differences prevented standardizations within the market 3 Business Model - Key capabilities and assets include the management team blue-chip investors and strategic partners warehouse and fulfillment operations and technology infrastructure There was a heavy emphasis on the cooperation between local countries country managers and headquarters 4 Financial Model - Revenues are generated from selling merchandise purchased from suppliers held in inventory and shipped to consumers Financial support from investors equaling US1081 million including seed capitol provided by GP Investments was generated from June 1999 through February 2001 5 Marketing Strategy - Submarinos mission is to be the preferred online
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