Competitive Strategy LB5206 Amazon.com “Live” Case Study Table of Content Table of Content 2 Executive Summary 2 Corporate Culture 3 Industry Analysis through Porter’s Five Forces 5 Competitors for amazon.com 8 SWOT Analysis of Amazon 9 Difficulties faced by Amazon.com 12 Competitive Strategies 12 Recommendations 14 General References 15 Executive Summary Amazon.com is a customer centric company. They put more effort in improving their system to make the experience of customer more comfortable so that he keeps on returning to the website. Jeffery Bezos who is the founder of the Amazon.com started this company after seeing the use of internet increasing rapidly. The company was started in year 1994. Bezos started operating the …show more content…
According to Bezos, the company tries to solve a very hard problem by understanding how can they serve the consumer better and thus try to convert the problem into straight forward problem. When Bezos started his business, there were different reviews about this business like they say that they don’t have their own products but they sell other companies products, so they are a hindrance to innovation for other companies. There were many negative reviews about the company being posted on their website but Benzos wasn’t concerned about those comments. Acc to Bezos, amazon.com doesn’t make money when they sell, but they make money when they help customers in choosing the product they want to buy. According to Bezos, as the company grew from nothing to a successful organization you not only figure out how to do but what to do. And this happens as the company grows from a one many company to large company. So as the company grows bigger you figure out different ways to convince consumers. (Gregory T. Huang. (2010)) Industry Analysis through Porter’s Five Forces Porters five forces will help us in analyse the industry amazon.com is in. Five Forces which will be analysed will be • Threat of new entrants • Bargaining power of suppliers • Bargaining power of buyers • Threat of substitute products • Intensity of rivalry among competitors Threat of new entrants Threat of entry is either low or
Another aspect of the Amazon's strong and steady success was that it devoted itself to becoming the most customer-centric online marketplace. Amazon always believed that shopping and searching for items had to be the simplest and easiest experience for customers and that via this ease and simplicity customers would continue to shop at Amazon. This philosophy has by and large been an enormous reason for Amazon's rapid growth and expansion. For example, the founder Bezos
The Amazon.com mission is one that has a centric value to hold very close for all operations involved, the Amazon.com online customer is first and foremost. Amazon has a clear focus and a solid mission that has imprinted since the beginning. Founder and CEO Jeff Bezos has multiple times referred to the Amazon mission statement as the force that guides his powerful leadership decisions multiple times within the Amazon.com history. The success of Amazon is confirmed as one of the top internet retail companies in the world is due in part of the commitment to their mission and the way top leadership executes. The mission and vision of Amazon is, “Our vision is to be earth 's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon.com is a worldwide American-based electronic company founded in 1994 by Jeff Bezos, the actual chairman and CEO. At the beginning, Amazon was just a small online book retailer, but thanks to the development of Internet at the end of the 90s, it grew quickly into a huge online retail store. Today, in the United States, one out of three online sales are made through Amazon’s website.
The company’s business strategy is as simple as a napkin sketch (Exhibit B) drawn by Bezos 15 years ago. As seen in the diagram, Amazon’s strategy is a closed loop. They are focused on the customer experience, not the profits. This means that what really matters in a company structure like this is cash flow. Amazon’s cash flow numbers are so impressive that they list operating cash flow and free cash flow as the two first figures in their earnings press release. An analysis of Amazon’s free cash flow (Exhibit C) indicates that their operating cash margin (OCM) has been rather stable throughout the decade but free crash flow (FCF) has fallen because of the increase in capital expenditure (Capex). (Evans, 2015) With rapid revenue growth, Amazon has become a business that is capex intensive. From 2011 to 2015, the company has increased its capital expenditures by 250% to 4.59B. For every dollar of revenue more is spent on capex, which goes back into the business to makes investments in
The analysis of the Porters five forces are very important to business entities. Based on the analysis a business can evaluate their current position and positions that they plan to progress towards as it relates to the industry they are operating in.
Amazon is an online retailer focused on selection, price and convenience. Incorporated in May 1996, Amazon.com offers programs that allow sellers to sell products on the website and have the fulfillment performed by the seller. In addition to the online marketplace, Amazon also manufactures and sells Kindle devices. Through the different programs offered by Amazon, the company has the edge over their competitors. They are able to secure the lowest price, fastest shipping and offer incentives to the customer, such as Amazon Prime (Amazon, 2014).
Amazon.com, from a strategic approach, is dominating the world-wide-web. They have become the world leader in online sales of books, music, videos, movies and other products and services. Amazon knew that the Internet could be used as a distribution channel, thus reducing their supply chain relations. By making these strategic advances, Amazon was able to achieve and sustain their competitive advantage.
Amazon.com has been a great resource for online shopping. The popularity of Amazon.com has grown over the last 21 years and continues to offer new innovations that lead to the company’s continuous success. Amazon offers most products held in stores usually at a lower price. Over the years, Amazon has become the go-to site for shopping. Amazon prime with free 2-day shipping has made it convenient to shop from the comfort of your home, with a guarantee on when the items will be delivered. Amazon.com is one of the leading online retail websites around the globe. Amazon.com was founded in July 1994 by Jeff Bezos in Seattle, Washington and strives to be “the most customer centric company where people can find and discover virtually anything they want to buy online” (amazon.com). The website started in 1995 with only one target market in mind, book lovers. Jeff Bezos wanted a place for book lovers to browse millions of books in one convenient place. The company was a huge success just after 30 days, fulfilling orders in all 50 states and 45 countries around the world. Amazon.com’s warehouse started in a Seattle-area garage. Now, “Amazon operates retail websites and offers platforms that enable third party sellers to sell their products on the Amazon.com website” (amazon.com). Amazon has grown so much in the past 20 years with warehouses in 18 states and 15 countries. The wide range of services and goods lead to the company’s success. Some of
Amazon is a Fortune 500 e-commerce company based in Seattle, Washington, the company being one of the first largest to sell goods over the internet. In 1994, Jeff Bezos launched Amazon, the next year the business took off. Amazon originally started out as an online bookstore quickly diversifying its self by adding music, DVD’s, video games and clothing. These days’ amazon sells everything you can think of, including groceries and delivers right to your door. Amazon considers itself a customer centered company, Jeff Bezos believes if they don’t listen to customers the company will fail. As Bezos stated, “Amazon puts the customer experience at the top of their short and long term to-do list” (Penhollow, N.D.).
Amazon is consistently ranked as the premier E-commerce business, an achievement that stems from their use of the Web to conduct and facilitate the sale of products online. Amazon’s mission of “Earth’s most customer-centric company”, is reflected through its core competencies of revolutionizing and streamlining the vending business, by becoming the most effective and high-quality producer of online services. Innovation through advanced technology and a great customer experience, are the main core competencies of Amazon and that has place the company at the top. Amazon delivers value to their customers by creating interactions within its individual business units. They also utilize the use of supply chain partners. They have used their
Amazon is an American commerce company based in Seattle, Washington, USA. The company used to be only a bookstore, but now it diversified into difference type of products. The goal of Amazon is to provide one stop shop experience where the customer can find everything on Amazon as earth’s biggest selection (Warman 2012). Amazon operates as a pure internet retailers that does not have retail store at all while the delivery will be done through Amazon’s networks of distribution centres. This operation makes the company is able to provide wider range of goods and lower cost of products with high quality. Moreover, it is also increase customer satisfaction as it supports customer convenience.
Launched by Jeff Bezos, the Amazon.com website started in 1995 and is today considered as one of the most prominent retail website on the internet with a record turnover of US$ 14.87 billion in 2007. Jeff Bezos’s intention was to create an internet based company with the most dedicated product portfolio on the internet where customers could find anything they might want. Amazon’s success is based on technology, services and products (Jens et al., 2003).
Amazon is a high-tech company. From the very initial design Amazon nearly extinguish the bookstore business. When amazon first started, one of its first products was books. The initial forming of amazon was simple, but it had a strategy with online shopping that help consumers get the books they were looking for. The design caused many bookstores to go out of business and to include Barns & Noble. When Barns & Noble was on the verge of losing consumers they introduce the Nook for eBooks to compete with Amazon. Amazon introduces the Kindle Fire that was similar to Nook in the forms of reading eBooks but had more feature for media.
Successful business partnerships are the driving force behind competitive online retailers. Innovated strategies, business techniques, and customer relations management (CRM) will further enhance Amazon’s customer satisfaction and loyalty. Amazon uses e-business, e-commerce, and data management to gain competitive advantages against other online retailers. “No company exemplifies a new business era of the internet more than Amazon.com. What started out as a book company emerged as a serious competitor to dozens of industries” (Pearlson & Saunders, 2005, p. 189). Amazon’s pursuit to become the e-commerce leader world-wide will require continuous
The importance of Porter’s five forces is to identify and analyze the market or industry. Porter (Michael E.) identifies five such forces that can affect the future of company.