Essay Amazon Case Analysis

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Key drivers of change Technological most important aspect of Amazon’s Pestle factors: Key drivers for change: * /Internet penetration rates * Web development e-commerce * Protecting their patented software and not being imitated easily by competitors. E-commerce-Bezos understanding of e-commerce through knowledge of web users and the web that has made amazon a dominant company on the web .’(pg 27 Saunders 1999) ,Branding of the website is important .(Pg 91 saunders) Commitment to e-commerce has to be maintained, by keeping ahead of the technology curve, Amazon’s one-click technology is important in keeping customers visiting.(pg 32-33 saunders ) Porters 5 forces analysis The threat of Entry * How will…show more content…
Competitive rivalry * The industry growth rate was high, World wide web had a fast growth rate, predicted at 2,300 percent monthly * Barnes and noble could have been considered a threat as they had infrastructure as well as a online arm * E-bay only focused on online auctions, in which was only a small area of Amazon’s business model. * With customer experience costs largely fixed, Amazon’s costs as a percentage of sales can shrink rapidly as they grow their business. * Amazon continued to lower prices as well as free shipping on orders over $25.(This allowing Amazon to increase their volumes of output , this leading to price wars and increased competition. * Amazon is seen as ‘Virtual’ i.e it has no brick and mortar stores like competitors ( barnes and noble ), as well as no storage costs. Thus enabling them to invest more capital into enhancing its brand and website. * There is Low differentiation in Amazon’s industry in terms of online auctions as customers can easily switch between them and E-Bay as well as online book sales as they can switch to rivals such as Barnes and noble, although Amazon was able to undercut their rivals as they competed on price, By having no high costs in terms of storage of stock or buildings they could pass this benefit onto customers. * Referring to competitor Barnes and noble’s 1999 company report they had other costs , such as rental space and the costs of opening

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