Amazon : A Competitive Market

Also, Amazon has emphasized on building “several distribution centers around the world to hasten deliveries”(Hof and Himelstein, 1999). Coupled with its software it provides a “laser-like focus on the buying experience”(IT Business Edge, 2012). Such a system and service is what draws customers towards Amazon and subsequently retains them.

Due to Amazon.com building their business model around their customer 's ever-changing tastes and preferences, they were able to avoid the dot-com bust - a period between 2000-2002, where many dot-com companies went bankrupt (Dot-com bust, 2012).

Amazon’s fulfillment centers are valuable, rare, costly to imitate, and organized to captured value. Thus, they attribute to Amazon’s competitive advantage. Amazon Prime and 1-Click are also valuable to the organization. However, they can be replicated. Walmart launched a membership program to compete with Amazon’s Prime Service. With Walmart’s membership program customers receive free two-day shipping when they spend $35 or more on orders. Amazon Web Services is valuable, rare, costly to imitate and the organization has capture the value of it. Therefore, AWS has contributed to Amazon’s sustainable advantage. Amazon’s brand name and reputation have also given the company sustainable advantage. Amazon acquired enormous brand valuation in a short period of time. It is

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.

Amazon is the world’s largest online retailer that was launched in 1995 (Rouse, 2014). Amazon was mainly a book selling company that has enlarged its’ business by selling a variety of goods. The company sells all types of technology devices such as cell phones, games, televisions, movies, cameras, computers,

Amazon focuses on global reach, putting customer first,, and extensive selection of products through its vision which is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory 2016).

The company I have chosen to write about is Amazon. Amazon, was launched on July 16, 1995 by founder Jeff Bezos in his two-car garage in Bellevne, Washington. When Amazon first launched as a website that only sold books, but Jeff Bezos wanted Amazon to be much more than a bookstore, he wanted it to be an everything store. This paper will answer the required questions listed below:

Providing customers more of what they want - low prices, vast selection, and convenience - Amazon continues to grow and evolve as a world-class e-commerce platform. “When you order products from Amazon, it arrives on your doorstep in two days, but people don’t think about how.” said George Prest, CEO of a logistics trade group.

market position in the online retail format enables Amazon to target a larger customer base.

Founded in 1994 by Jeff Bezos, the company went online on the World Wide Web in July 1995.Amazon focuses on increasing its market share and revenues in the long term and maintaining competitive costs of profit margins and dividends paid to its shareholders in the short term. Amazon’s sound business fundamentals include its core business and essential revenue sector of e-commerce, a new focus on media independent of Kindle, improved profit margins from Amazon’s Web Services (AWS) as well as the management of a negative cash conversion cycle (Samonas, 2015).

Amazon’s major competitors are divided in two parts. The first part is physical stores such as Walmart or Target. The second area of competition is through the online market eg; EBay and BestBuy. As opposed to Amazon, customers in a physical store could have more comprehensive experience, especially for specific products like clothes and electronic devices. Some customers need to be able to see and try the product themselves before feeling comfortable enough to purchase it. Secondly, although Amazon has two day free shipping for its Amazon Prime, people are required pay a yearly membership fee. People can also choose one day shipping and are charged higher shipping fees. Physical stores still have more advantages than Amazon in this aspect. Customers can directly buy what they want in the store and avoid obnoxious shipping fees.

With very little doubt, Amazon has become the most feared competition amongst traditional retailers such as Target, Wal-Mart and Best buy. To support this growth, Amazon has built one of the world’s largest supply chain distribution systems spanning 148 centers around the world, totally more than 17 million square feet in North America alone (Stone, 2009). However, in the midst of the massive growth of that Amazon has experienced in the last few years, many workers of rural Amazon distribution centers in Nevada, Indiana and Pennsylvania are shockingly finding themselves without jobs as their centers of employment close, while Amazon looks to shift its supply chain strategy (Stone, 2009). In this paper we will further look at Amazon’s new strategy with ideas for distribution that no longer call for having fewer, larger warehouses which ship all over the country, to multiple more, smaller warehouses located near population centers to allow for multiple shipping and delivery programs. Lastly, this paper will look at the effect this will have on Amazon’s supply chain, as well as its effect on the world market as a whole.

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Amazon is a relatively small player in the bookstore industry, and its main competitors are Barnes & Noble and Borders. Despite the difference in scale, the company shows great promise, because its business model overcomes many of the competitors’ drawbacks.

Amazon started with Jeff Bezos’ idea on creating a company based around selling on the internet (Int. Directory). In the 1994, Jeff left the Wall Street firm D.E. Shaw, moved to Seattle. There, he created a business plan, from which Amazon was born. Jeff projected a 2,300% of annual web growth over time from selling on the internet. He took the five most profitable products and put them on his stock. At the time, books were a strong suit for Amazon, and where most of their profit came from (Int. Directory). Their competition was Barnes and Noble, who were large retail booksellers dominating the market. By 1995,